Money was the key question at COP29, which took place in Baku, Azerbaijan. This was the first summit tasked with replacing the climate finance target that richer nations initially pledged to provide poorer ones in 2009.
The big fight over money took place against a backdrop of geopolitical tensions. The election of Donald Trump, who has promised to pull the US out of the 2015 Paris Agreement, fuelled doubts among groups and nations about the future of climate finance. These fears were further exacerbated by the absence of major finance players and a secret recording of the chief executive of Azerbaijan’s COP29 team discussing investment opportunities in oil and gas. After two weeks of negotiations, which ran 35 hours late and came close to collapse, this is what was agreed.
COP29 agrees $1.3tn deal
The final hours of COP29 were marked by a last-minute scramble to hammer out a new deal on the critical global climate finance target, also known as the new collective quantified goal (NCQG).
This is the threshold amount that countries promise to mobilise to help developing nations switch to clean energy and mitigate the impacts of the climate crisis. Since COP15 in 2009, this target has been $100bn a year by 2020.
The finally proposed target of $300bn (£238bn) a year by 2035 is triple that of the previous target. However, it falls short of the $1.3tn (£1tn) experts say is needed and which many developing countries called for.
Recognising this gap, the agreement does include a promise to scale up finance from public and private sources to meet at least $1.3tn (£1tn) per year – although there are no specific details about how this will be achieved. The new finance deal also allows for voluntary inputs from developing nations that have not previously provided official climate finance, such as China.
Despite the high numbers, developing country representatives have expressed their disappointment at the final pledge. The African Group of Negotiators (AGN) described it as “too little, too late” and a representative from India labelled it “a paltry sum”. The head of the UN climate body, Simon Stiell, conceded that “no country got everything they wanted” and said there was still a “mountain of work” to do.
A UN-backed carbon market becomes a reality
COP29 reached an agreement on rules for a UN-backed global market for trading carbon credits, something previous summits have not been able to achieve.
This deal delivers global standards for carbon trading, including a methodology for developing and assessing eligible carbon credits and a set of requirements for projects that remove greenhouse gases.
These new rules are intended to pave the way for country-to-country trading of carbon credits and incentivise companies and nations to cut emissions.
It’s not perfect. Critics question the overall rigour of the standards for creating high-quality carbon credits and there’s still a long list of outstanding questions that need to be resolved before a UN-operated marketplace becomes a reality. Indeed, technical issues regarding the practical trading frameworks have yet to be agreed on, including an international registry and corresponding adjustment mechanisms to avoid double-counting of emission reductions.
Others see the new rules as a critical breakthrough after years of stalemate on carbon markets and believe it will help boost the system’s credibility.
What to expect at COP30
The next climate summit, COP30, will take place in Belém, Brazil from 10-21 November 2025. Given its proximity to the Amazon rainforest, the theme of the summit will be addressing biodiversity loss.
There was a lot left unsaid at COP29. Most notable was a lack of agreement on the phasing out of fossil fuels. This is expected to be picked up in Brazil, including through possible taxes on coal, oil and gas. It will, however, be the third consecutive year the UN’s top climate talks have been held in a country that plans to expand domestic production of fossil fuels.
More details on the $300bn (£238bn) a year by 2035 climate finance target will need to be ironed out, given the last minute scramble to secure an agreement. Indeed, the NCQG agreement states that nations must produce a report for COP30 on “scaling up climate finance”.
Attendees have spoken about their frustration with COP and several senior climate leaders wrote a public letter saying the summit was no longer fit for purpose. Whether or not COP30 will be any different remains to be seen.
