COP29, the Conference of the Parties (COP) of the UNFCCC, brought together more than 55,000 participants from all over the world to focus on the climate crisis. COP29 took place in Baku, Azerbaijan from November 11th to November 22nd 2024. It is the annual climate summit that makes room for countries to negotiate climate action, set climate targets and assess their progress, mobilize and align financial support, and overall try to find agreements on critical climate issues.
The conference attracted a diverse array of participants, including heads of state, ministers, climate negotiators, representatives from environmental organizations, scientific experts, and private sector leaders. Expectations were high, and the conference ended with mixed results. This article highlights four main takeaways from an intense two weeks.
For more information on what was expected from COP29, please read our article.
New Collective Quantified Goal for Climate Finance
COP29 introduced a new global climate finance target that aims to raise $300 billion per year for developing countries by 2035. This New Collective Quantified Goal (NCQG) for climate finance seeks to replace the annual finance target of $100 billion that was set at COP15. As the COP15 finance target was critiqued in the past for not being sufficient, the NCQG makes way for a more needs-based approach to climate financing, although there are some contentions.
Since 1992, the EU and 23 other developed countries are obligated to contribute to climate finance, as history has shown that they bear the responsibility for the majority of the carbon emissions emitted. However, the amount going to climate finance and its framework prove tricky to establish. Developing countries are arguing that while this is better than the previously set target, trillions of dollars are needed in order for them to transition to cleaner economies. As developing countries insist that developed countries should bear the responsibility for contributions, the final agreement of the NCQG continues to advocate for contributions to come from all sources, both public and private, in order for the broader annual climate finance target of $1.3 trillion to be met by 2035.
The NCQC includes money from public funds, development bank loans, and private investments while also allowing for voluntary contributions from developing countries. The annual $300 billion target is to help developing countries build resilience, create more energy access, and overall foster sustainable development, albeit the lack of detail and mention given to nature was noted. The negotiators pushed to establish fair expectations for contributors to ensure that their financial support would bring tangible impact. While this goal is a step forward, it builds more of a foundation rather than the solution.
Loss and Damage Fund
Developing countries also pushed for more solid assurances regarding the Loss and Damage Fund. This Fund, initially agreed upon at COP27, aims to provide financial support to countries suffering from climate-induced disasters. The Fund was made fully operational at COP29 and will start to finance projects and distribute funds in the beginning of 2025. The Fund is set up in a way that ensures fair distribution of resources, while prioritizing the countries that are the least-developed or small island developing states (SIDS). The Fund helps to shine a light on the disproportional impact and lack of justice that climate change has on vulnerable nations. Developing nations have criticized the funding pledged as being insufficient, with financial commitments of more than $750 million being received. Negotiators did explore new areas of funding, such as levies on fossil fuel exports or international shipping, but as developed countries resisted broadening their finance obligations, loss and damage was not included in the NCQG.
Article 6
After almost a decade in the works, Article 6 of the Paris Agreement made significant progress at COP29. Countries have now made two of the Article 6 mechanisms operational: Article 6.2, which deals with country-to-country carbon trading, and Article 6.4, which deals with the establishment of a centralized international carbon market. While the work is far from over, what has been agreed upon is a major milestone.
For Article 6.2, COP29 clarified exactly how countries can approve the carbon credit transactions and how registries will be tracking these operations. It was also agreed that the UN will not be the one overseeing the quality of environmental outcomes, instead having the environmental integrity validated through technical reviews. This gives room for stronger bilateral approaches and more certainty in the market. However, while this agreement provides further transparency and the means to help ensure environmental integrity, there is still a risk for low-integrity carbon deals, and it should be watched closely.
Concerning Article 6.4, countries agreed to this mechanism on day one of COP29, which was celebrated by developing countries who are set to benefit from this new flow of carbon finance. It was also noted that this mechanism finally includes mandatory safeguards designed to protect both the environment and human rights and ensuring that there is free and prior informed consent of indigenous peoples before the project can proceed. The Supervisory Body tasked to set up this new carbon crediting mechanism (and making sure that the market is aligned with science) has been given a very long to-do list by the Parties for the new year, and these Parties will be holding them accountable.
New Nationally Determined Contributions
With the February 2025 deadline for submitting updated nationally determined contributions (NDCs) in mind, countries were encouraged to make their NDCs more ambitious. NDCS are submitted to the UNFCCC every 5 years, therefore countries will need to upgrade their targets for 2030 and set new decarbonization and resilience targets for 2035. During COP29, the UK announced their ambitious commitment to cut greenhouse gas emissions by 81% (compared to 1990 levels) by 2035. Brazil and the UAE also launched their respective NDC targets for 2035, but these submissions failed to highlight their fossil fuel phase-out. Questions still remain for major carbon emitters and economies such as China, Canada, India, and that of the EU. However, as COP30 will be held in Belém, Brazil next year, it is recommended that this gap is addressed so that other developing countries can follow their lead.
Final Thoughts: Looking towards COP30
The overall outcomes of COP29 showed a mix of progress and challenges still needing to be addressed. There were significant advancements made towards climate financial agreements, carbon markets and trading, and climate adaptation efforts, but nations will need to be held accountable as the focus shifts towards implementing these new agreements. With the new round of NDCs due in 2025, COP30 in Belém, Brazil, will need to set the tone for climate ambition and build on the progress made during COP29 in order for nations to meet their Paris Agreement goals.
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