The 29th United Nations Climate Summit (COP29) wrapped up in Baku, Azerbaijan, on November 24, two days beyond its scheduled conclusion. The event brought together over 55,000 global participants, culminating in agreements on climate finance and carbon markets, as well as progress on supporting vulnerable nations through the Loss and Damage Fund. Below are the key takeaways:

Contentious $300 Billion Climate Finance Deal

One of COP29’s most debated outcomes was the pledge by wealthy nations to provide at least $300 billion annually in climate financing to developing nations by 2035. This represents an increase from the $250 billion proposed earlier during negotiations and builds upon a previous commitment made at COP15 to provide $100 billion annually, a goal met belatedly in 2022.

Despite the increase, the finance deal faced criticism from both environmental groups and developing nations. Chandni Raina, representing India, criticized the pledge as inadequate, stating it fails to address the scale of challenges faced by vulnerable nations. The World Wildlife Fund echoed these concerns, calling the agreement a "setback for climate action." Experts estimate that up to $1 trillion per year is needed to meet climate and development goals, highlighting a significant shortfall in the financial commitment.

Boost for Global Carbon Markets

On a more positive note, COP29 advanced efforts to strengthen international carbon markets under Article 6 of the Paris Agreement. Climate negotiators approved Article 6.4 on the summit’s first day, establishing a mechanism to identify and fund verified emission reduction projects. This centralized carbon market aims to streamline climate action by supporting countries and companies in achieving their climate goals faster and more cost-effectively.

Additionally, Article 6.2, which facilitates bilateral agreements for emissions trading between countries and private entities, was also approved. Together, these frameworks promote global cooperation on climate targets and aim to unlock new financial resources for developing nations.

Loss and Damage Fund Becomes Operational

A major achievement at COP29 was the operationalization of the Loss and Damage Fund, created at COP27 to assist developing countries in addressing economic and non-economic losses caused by climate change. The fund is set to begin disbursing financial support by early 2025 and has already secured commitments exceeding $730 million. Operationalizing the fund was a top priority for COP29 president-designate Mukhtar Babayev, who emphasized its importance in providing much-needed financial assistance to vulnerable nations.

Notable Absences and Withdrawals

The summit was marked by the absence of senior French officials and the withdrawal of Argentina’s delegation. Argentina’s decision came shortly after President Javier Milei, known for his anti-climate stance, reportedly consulted with U.S. President-elect Donald Trump. Meanwhile, France abstained from participating after Azerbaijan accused the country of suppressing climate activism in its overseas territory, New Caledonia. French Ecological Transition Minister Agnès Pannier-Runacher dismissed these accusations as “unacceptable” and “unjustifiable.”

Looking Ahead

While COP29 achieved milestones in areas such as carbon markets and support for vulnerable nations, the contentious finance deal and notable political dynamics underscored ongoing challenges in achieving global consensus on climate action. As the world prepares for COP30, the need for greater ambition, cooperation, and financial commitment remains critical in addressing the growing climate crisis.

Source: ESG Dive COP29_Key_Takeaways, November 2024