COP29 Summit in Baku: Key Outcomes and New Climate Finance Goal

COP29 Summit, officially known as the 29th Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC), concluded in November 2024, in Baku, Azerbaijan. Labelled the "Finance COP," the summit was primarily focused on hammering out a new, ambitious financial goal to help developing nations combat climate change and transition to cleaner economies.

The conference aimed to enhance global ambition and enable action to keep the target of limiting global warming to 1.5°C within reach. 

COP29 Summit

COP29 Summit is the 29th annual meeting of the parties to the UNFCCC a landmark international treaty established in 1992. These conferences are the world's primary multilateral decision-making forum on climate change, bringing together nearly 200 countries to agree on actions to address the climate crisis.

The 2024 conference, held from November 11 to 22 in Baku, Azerbaijan, served as a crucial follow-up to the Global Stocktake (GST) completed at COP28. The GST revealed the world is significantly off track from the Paris Agreement's 1.5°C goal, placing immense pressure on COP29 to deliver tangible progress, especially on financial commitments.

The Presidency of COP29, led by Azerbaijan Mukhtar Babayev, articulated a vision themed 'In Solidarity for a Green World,' focusing on two mutually reinforcing pillars: Enhancing Ambition and Enabling Action.

New Collective Quantified Goal (NCQG) on Climate Finance

Finance was the central and most contentious issue at the COP29 Summit, as negotiations aimed to establish the New Collective Quantified Goal (NCQG), which would replace the previous commitment by developed countries to mobilise $100 billion per year by 2020 jointly.

The conference concluded with the adoption of a new finance goal known as the Baku Climate Unity Pact, that has two primary components:

• Core Financing Target: Developed countries are called upon to lead the effort to mobilise at least USD 300 billion per year by 2035 for climate action in developing countries.

• Wider Mobilization Aim: A looser call was agreed upon to raise USD 1.3 trillion each year by 2035 from a wide variety of sources, including public, private, bilateral, and multilateral investments. This second component is part of a process called the “Baku to Belém Roadmap to $1.3T”.

Operationalising Article 6 and Carbon Markets

One of the most significant technical breakthroughs at the COP29 Summit was the finalisation of the implementation guidance needed to fully operationalise the international carbon market mechanisms under Article 6 of the Paris Agreement.

Decades-long negotiations were resolved, completing the design of the Article 6.4 mechanism, which can now start operating. This established two pathways for international cooperation on emissions reduction:

1. Article 6.2 (Bilateral Trading): Facilitating direct country-to-country trading of mitigation outcomes.

2. Article 6.4 (Global Crediting Mechanism): Defining the missing aspects for a UN-backed global carbon crediting system, including the authorisation and registration of emission credits.

This finalisation is crucial as it aims to kick-start global carbon credit trading, providing a mechanism for nations to meet their climate pledges through international cooperation.

Progress on Loss and Damage Fund (LDF)

The Loss and Damage Fund (LDF), agreed upon at COP27 and established at COP28, is vital for providing financial assistance to communities most vulnerable to the irreversible impacts of climate change. 

At COP29, parties successfully finalised the institutional arrangements for the Fund. This outcome means that the LDF can begin disbursing funds in 2025, which is a major step toward supporting Small Island Developing States (SIDS) and Least Developed Countries (LDCs).

Declarations and Initiatives Launched at the COP29 Summit

In addition to the core negotiations, several declarations and initiatives were launched at the COP29 Summit to spur sectoral action and enhance transparency:

• Baku Harmoniya Climate Initiative: This initiative was launched to empower farmers and transform agricultural practices globally, focusing on integrating food systems into Nationally Determined Contributions (NDCs) and adaptation plans.

• COP29 Hydrogen Declaration: Governments from supporting countries committed to scaling up renewable, zero-emission, and low-carbon hydrogen production, and accelerating the decarbonization of existing hydrogen production.

• Enhanced Transparency Framework (ETF): The conference concluded all negotiating items under the ETF, mandating nations to transparently report their greenhouse gas emissions, mitigation efforts, and adaptation actions, thereby strengthening global accountability.

• Renewal of Key Programmes: The summit renewed the enhanced Lima Work Programme on Gender for another ten years and adopted the Baku Workplan for the Local Communities and Indigenous Peoples Platform (LCIPP), ensuring the integration of traditional knowledge into climate policies.

Shortcomings and Areas of Contention in the COP29 Talks

Despite the breakthroughs in finance and carbon markets, the COP29 Summit faced significant criticism for its shortcomings, particularly regarding fossil fuels and mitigation ambition:

• Failure on Fossil Fuel Phase-Out: Crucially, the conference failed to produce an agreement on how to take forward the key pledge from COP28 to "transition away from fossil fuels". The decision was ultimately postponed to COP30, reflecting a deadlock and a lack of consensus on ambitious mitigation measures.

• Inadequate NCQG Figure: The agreed-upon floor of $300 billion fell considerably short of the estimated trillions of dollars needed annually by developing countries, leading to dissatisfaction and bitter negotiation among poorer nations.

• Deadlock on Mitigation Work Programme: Disagreements, mainly concerning the language on fossil fuels, led to a deadlock on the Mitigation Work Programme, delaying progress on translating the Global Stocktake findings into concrete emission-reduction actions.