The twenty-ninth session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP-29) took place from November 11 to 22, 2024, in Azerbaijan, amid escalating global climate and economic challenges. Representatives from around the world gathered with senior officials from the United Nations and civil society to review progress and negotiate the best ways to address climate change, focusing on accelerating the transition to clean energy, reducing emissions, and supporting countries affected by climate change. Despite ambitious commitments being announced, implementation remains the biggest challenge in achieving the declared goals.
Key Outputs
After nearly two weeks of debate and negotiations, the world’s countries gathered at the climate conference in the Azerbaijani capital, Baku, agreed on several important outputs to combat climate change, focusing primarily on the issue of financing. There is a need for trillions of dollars for countries to significantly reduce greenhouse gas emissions and mitigate the escalating effects of climate change. The main outputs of the COP-29 climate conference are as follows:
Approval of the Baku Financial Goal of $1.3 Trillion:
The COP-29 presidency announced the “Baku Financial Goal,” a new commitment to allocate $1.3 trillion annually from climate financing for developing countries. This goal is considered a major achievement of the summit and represents a significant development compared to the previous target.
The “Baku Financial Goal” includes a core objective for developed countries to take the lead in providing no less than $100 billion per year, which had long faced criticism for being inadequate to meet increasing climate challenges. The updated goal now targets no less than $300 billion annually to developing countries by 2035.
Establishment of a Global Carbon Market Mechanism:
Negotiators at COP-29 reached an agreement on carbon credits after nearly a decade of deliberations. This decision will pave the way for further trading within a new market overseen by the United Nations. In this regard, COP-29 president Mukhtar Babayev stated, “We have ended a decade-long wait. Climate change is a transnational challenge, and Article 6 will enable cross-border solutions among countries.” Notably, on the first day of the summit, negotiators rushed to reach an agreement on the rules under Article 6.4 regarding how the new UN-supported global credit mechanism will operate and adopted additional rules regarding Article 6.2. According to Bloomberg, the rules allow countries to trade carbon credits with each other, as well as between companies. They also provide details on the accounting system for how the selling country deducts that credit from its national carbon inventory to prevent the same credit from being used twice.
Full Operation Guarantee for the Loss and Damage Fund:
The COP-29 conference made a decision to ensure the full operationalization of the long-awaited Loss and Damage Fund by developing countries, including small island nations, least developed countries, and African nations. This aligns with the priority set by Azerbaijan’s President Ilham Aliyev to address the challenges posed by climate change on small island states under the presidency of COP-29.
It is noteworthy that the agreement to establish the Loss and Damage Fund was made during COP-27 held in Egypt. The fund aims to provide financial assistance to countries most vulnerable to the impacts of climate change. During COP-28 in the UAE, a decision was made to initiate the fund’s operations. The presidency of COP-29 took significant steps to ensure the fund’s operation, working closely with its board and the World Bank.
In September 2024, during the third meeting of the fund’s board held in Baku, decisive measures were taken to commence operations, including the appointment of Ibrahima Sheikh Dioung as the Fund’s Executive Director. Under COP-29, several important agreements related to the Loss and Damage Fund were signed, including the “Trustee Agreement,” the “Host Secretariat Agreement” between the fund’s board and the World Bank, and the “Host Country Agreement” between the fund’s board and the host country, the Philippines. To date, the total financial support pledged to the fund has exceeded $730 million.
Launch of the Water for Climate Action Program: In a significant step during COP-29, the conference presidency launched the Water for Climate Action initiative, aimed at enhancing the interaction between water resource management and climate change adaptation efforts. The initiative seeks to ensure that water resources are treated as a fundamental part of climate solutions, thereby enhancing countries’ ability to adapt to the impacts of climate change on the water sector. The initiative, which has been agreed upon by 50 countries, calls for the integration of water-related mitigation and adaptation measures into national climate policies.
To support these efforts, signatories will work together to develop scientific evidence regarding the causes and impacts of climate change on water resources through data sharing and the creation of new climate scenarios. The announcement of the initiative has garnered support from prominent non-governmental actors, including the World Wildlife Fund, Water.org, Water Equity, the Stockholm International Water Institute, and the Islamic Development Bank. A Baku Dialogue on Water for Climate Action has also been launched.
Emphasis on Public-Private Partnerships: Discussions to enhance climate financing during COP-29 focused on increasing funding through public-private partnerships. Banks such as JPMorgan, Deutsche Bank, and Barclays sent delegations to Azerbaijan, consisting of sustainability team members rather than senior executives. Of greater importance in Baku was the increased role of development banks; the largest multilateral development banks announced a new target to raise
Developed countries have pledged $120 billion annually to finance climate action in developing countries by the end of the current decade, marking a significant increase from the $75 billion raised in 2023. Multilateral development banks can leverage their budgets to mitigate risks for private investors, particularly those associated with allocating funds to emerging technologies and countries where financing costs are significantly high due to elevated credit risks stemming from corruption.
Ongoing Criticism
A number of developing countries criticized the outcomes of COP-29, deeming them insufficient to address the catastrophic consequences of climate change. Despite wealthy nations pledging to contribute $300 billion annually by 2035 under the “Baku Financial Goal” and agreeing to allocate $1.3 trillion annually to assist poorer countries in combating climate change effects after intensive negotiations at COP-29, the pledge faced sharp criticism from developing nations. They argued it was inadequate to tackle the scale of the climate crisis, especially given the summit was held in an oil- and gas-rich country, against the backdrop of an impending political shift in the United States with the inauguration of a climate-skeptic administration led by Donald Trump in January 2025.
It is noted that UN experts estimate that developing countries, excluding China, will need $2.4 trillion annually by 2030. Thus, several environmental organizations at Baku 2024 emphasized the need to allocate sufficient financing from public funds to mitigate greenhouse gas emissions and for disaster relief.
In conclusion, COP-29 took place at a critical time against the backdrop of increasing climate change impacts in many countries worldwide. The presidency of COP-29 adopted a tailored approach to break the previous multilateral deadlock. Throughout the conference, fruitful engagement among parties fostered progress by linking technical and political discussions to build consensus around many conference outputs. Despite various criticisms directed at the conference, some of its outputs may pave the way for greater international cooperation in the future to address the repercussions of climate change.
