Now more than ever, it’s time to invest in transparency and decarbonisation

Building on the developments of the previous conference, COP29 tasked nations with defining a new global climate finance goal to succeed the previous target of 100 bnUSD, which is set to expire in 2025. Setting the level of ambition forms a critical step in realigning financial commitments to meet the evolving challenges of climate change and ensuring equitable support across the global community.

Following tumultuous negotiations, representatives came to an agreement on a new finance goal aimed at bolstering climate action in developing countries that are most affected by extreme weather events and changing climate conditions. The New Collective Quantified Goal (NCQG) sets a target to triple the current finance commitment, increasing the annual flow to 300bnUSD by 2035. The parties agreed to collectively strive for a total of at least 1.3 tnUSD per year by 2035, including contributions from both public and private sources. However, some developing countries expressed their dissatisfaction over the agreement as they deem the figure to be insufficient to adequately address the effects of climate change on their economies.

COP29 saw the formalisation of several significant agreements necessary for the operationalisation of the Loss and Damage fund between the Fund’s Board and the World Bank, as well as the ‘Host Country Agreement’ for the Fund’s Board with the Republic of the Philippines. To date, the Fund has secured financial pledges over 730mnUSD, with France, Italy and the UAE accounting for over a third of the pledged contributions. The Fund is set to begin financing climate resilience projects by 2025.

Countries finalised the rules for a UN-backed global carbon market, ending a decade-long negotiation process under Article 6 of the Paris Agreement. This market will enable the trading of carbon credits, incentivising emissions reductions and investments in climate-friendly projects. A key aspect of the agreement is the clarification of how countries will authorise carbon credit trades and operate registries. The system will feature technical reviews to keep up with market trends and aim to ensure integrity through established standards on methodology requirements (requirements for developing and assessing projects under the Paris Agreement Crediting Mechanism) and activities involving removals (requirements for projects that remove greenhouse gasses from the atmosphere).

Despite marginal progress made to advance the global climate agenda, COP29 faced several controversies over the host country.

First, Azerbaijan’s role as a petrostate was put into question. The Azerbaijani President Ilham Aliyev has expressed his support for the industry, calling the national fossil fuel reserves a ‘gift from God’ in the opening speech. In an effort to limit the temperature increase to 1.5°C as outlined in the Paris Agreement, nations must pursue decarbonisation as a crucial step to climate change mitigation. However, data from the Global Carbon Budget report indicates that global fossil fuel emissions rose by 1.1% in 2023, compared to 2022 levels, showing no sign of the industry slow-down.

The second controversy is linked to the host country’s history of human rights violations both domestically and in the region of Nagorno-Karabakh, ethnic Armenians’ ancestral land, but which was taken back by force by Azerbaijan in 2023. Azerbaijan scored only 7 out of 100 points in the 2024 Freedom House assessment and has been criticised for its failures in addressing corruption, political oppression and disrespect of the freedom of the press principle.