The world’s attention is focused on the 29th Conference of the Parties, COP 29, currently taking place in Baku, Azerbaijan, from November 11 to November 22, 2024. This conference serves as a crucial platform to chart a new course toward a sustainable future as climate challenges intensify globally. Recent warnings indicate that 2024 will be the hottest year on record, necessitating an agreement on climate financing, coupled with radical actions to implement the commitments made at COP28. The conference is expected to feature intense discussions on innovative solutions to combat climate change, funding mechanisms, and how to ensure assistance reaches affected countries.
Key Topics
The COP 29 activities kicked off in Baku, Azerbaijan, under the banner “Solidarity for a Green World,” led by Azerbaijan’s President Mukhtar Babayev, and with the participation of around 200 countries to discuss how to rescue the Paris Agreement’s commitments to limit global warming to 2 degrees Celsius and efforts to keep it within 1.5 degrees Celsius. The conference’s opening highlighted the United Nations’ warnings about the significant risks threatening the Paris Agreement, amid the international community’s failure to achieve its targets, particularly the commitment to reduce global warming to 1.5 degrees Celsius. The conference generally addresses several key issues:
Measuring Progress in Addressing Climate Change: COP 29 aims to evaluate progress made by countries in tackling climate change against the target of 1.5 degrees Celsius. A temperature rise of 1.5 degrees Celsius could harm livelihoods and cause loss of life, with low-income countries facing the greatest hardships, while current trajectories predict a rise of about 2.6 to 3.1 degrees Celsius this century. Therefore, the primary aim among COP 29’s priorities is to secure a new climate financing goal, ensure every country has the necessary resources for stronger climate action, enhance commitments to reduce greenhouse gas emissions, and build resilient communities. Discussion will also focus on the next round of national climate plans or Nationally Determined Contributions (NDCs) that countries are developing ahead of next year’s deadline, emphasizing a shift away from fossil fuels and keeping the world on track to limit warming to 1.5 degrees.
Scaling Up Climate Financing: Climate financing is among the primary issues on the agenda of this current climate conference, often referred to as the “Financial COP,” due to its emphasis on expanding the necessary climate finance to assist low-income countries in transitioning to carbon-free economies and helping the most vulnerable communities adapt to the effects of climate change. The conference focuses on a new annual quantitative climate finance goal (NCQG) that will begin after the current $100 billion commitment—which developed countries have struggled to fulfill regularly since 2020—thus eroding trust among nations most affected by climate change.
Establishing Timelines and Clear Mechanisms for Funding Sources: Besides setting a financial target, negotiators at COP 29 must also agree on clear timelines for providing funds to low-income countries. Funding should be in the form of grants rather than loans to prevent exacerbating existing debt crises. This has led developed countries to seek financial solutions that include reforming international lending institutions and stimulating private sector investments, while the debate continues over the level of contributions expected from developing countries. While the UN estimates that developing countries need trillions of dollars annually to combat climate change, some officials aim for a target of securing hundreds of billions, highlighting the significant financing gap between reality and need. This topic may also include sub-goals to explore how to access and allocate funds effectively. Amnesty International has also called for the target to include financing for loss and damage, essentially compensations paid by high-income countries to low-income ones to help them recover from the current and future impacts of climate change.
Setting Standards for Carbon Credit Trading: The conference aims to establish regulations governing the trading of carbon credits derived from forest conservation and natural resource management, applying these transparently and ensuring environmental integrity for concerned projects, with standards for assessing and determining their cancellation. This requires tripling renewable energy capacity over the next decade to shift away from fossil fuels, necessitating massive funding to manage climate effects, particularly for developing communities.
Mitigation and Adaptation to Climate Changes: This conference seeks to set clear goals to help countries address the challenges of rising temperatures and drought-affected agricultural lands. Last year, countries committed to a framework outlining standards to help their citizens adapt to climate changes, but this framework lacks measurable targets. Consequently, developing countries suffering from damage and disasters due to climate change are calling for increased contributions to the Loss and Damage Response Fund, which has raised about $660 million to support victims of disasters such as floods and droughts. Infrastructure must also be adapted, including transportation, telecommunications, housing, and rural areas, for instance by constructing rail lines less susceptible to heating-induced deformation or roads less prone to melting, and building homes that do not overheat.
Energy Storage and Global Networks: Azerbaijan has identified storage as a primary priority for expanding renewable energy generation, setting a national goal for energy storage capacity of 250 megawatts. However, no single country can develop a global battery industry alone, mobilize supply chains, develop necessary technologies, and reduce costs. Therefore, increasing energy storage is essential to manage the variability of renewable energy sources and ensure grid stability and resilience. Moreover, energy grids need updating to accommodate growing shares of variable renewable energy. Thus, the conference will address the lack of energy storage solutions and the need for grid upgrades as barriers to countries’ ability to increase renewable energy share in power generation. In partnership with the UN Economic Commission for Europe and the UN Industrial Development Organization (UNIDO), COP 29 leadership has committed to a global pledge to increase installed energy storage capacity to 1,500 gigawatts by 2030, six times the level of 2022. Supporters of this pledge will commit to enhancing grid capacity by adding or renewing over 80 million kilometers of networks by 2040.
Enhancing the Global Shift Towards Clean Hydrogen: The COP 29 leadership will adopt mutual recognition of hydrogen certificate issuance plans to support the coordination and development of hydrogen markets in partnership with the UN Economic Commission for Europe and UNIDO. Supporting countries will commit to accelerating the decarbonization of hydrogen production, facilitating the energy transition, and increasing demand for clean hydrogen through goals, incentives, directives, public procurement initiatives, and public-private partnerships.
Early Outcomes
The conference has achieved several early outcomes in its initial days, notably:
Establishing Rules for Carbon Credit Trading:
The opening day successfully established basic rules governing carbon credit trading, breaking years of deadlock and paving the way for wealthy nations to cover lower-cost climate work overseas while delaying costly emissions reductions at home. This system allows countries to purchase credits for removing or avoiding pollution in other parts of the world by planting trees or conserving rainforests and tracking their progress toward emissions targets. The agreement is expected to clarify emissions trading within the UN-supervised global carbon market, which will be open to both companies and countries, and reduce the risk of double-counting emissions, including stronger safeguards for human rights.
UAE and Brazil Announce Emission Reduction Plans:
The UAE announced it will cut greenhouse gas emissions by 47% from 2019 levels by 2035, up from its previous goal of 40% by 2030. Brazil set a target to reduce emissions by 59-67% from 2005 levels by 2035, on its path to net-zero by 2050.
Commitment of Multilateral Development Banks for Continued Climate Financing:
Major multilateral development banks worldwide announced a new goal through a joint statement to secure annual climate financing for developing countries amounting to $120 billion by the end of the decade. However, the multilateral development banks group—comprising the World Bank, European Investment Bank, and Inter-American Development Bank—indicated that their ability to scale up climate financing depends on their shareholders’ commitments to contribute more capital. The group stated in a joint message: “Therefore, we continue to call for greater ambition among our member clients.”
In addition to these early achievements, several expected outcomes remain, as conference leaders hope to reach important agreements, including a new annual climate financing goal, an agreement to operate multilateral carbon credit markets, a commitment for more financial assistance to countries already impacted by costly climate disasters, and efforts to close the growing climate adaptation financing gap, which could reach $359 billion annually by 2030.
COP 29 is also expected to provide an ideal platform for countries to exchange experiences and knowledge, develop new partnerships in climate action, and launch promising new initiatives to enhance investments in renewable energy projects while reducing reliance on fossil fuels. Outside the formal conference framework, groups of countries may launch their own initiatives or commit to financing specific projects or climate-related trade deals to raise funds for climate change mitigation investments.
Ultimately, the success of COP 29 requires the collaborative efforts of all stakeholders, including governments, the private sector, and civil society, to achieve tangible progress in implementing the Paris Climate Agreement, enhancing climate financing for developing nations, and supporting the building of resilience against climate change impacts through developed countries’ commitments to increase climate funding and compensate losses and damages faced by developing nations.
