Amid rapidly escalating disasters and with planet-warming emissions at an all-time high, the next UN climate summit (COP29) offers an opportunity to unlock more ambitious climate action around the globe.
Taking place in Baku, Azerbaijan from Nov. 11-Nov. 22, 2024, the summit’s primary focus will be how to deliver more and better climate finance to the countries and communities that need it most urgently. But it is also a key moment for world leaders to signal how they will strengthen their national climate commitments and make good on past pledges.
Here, we take a deep dive into the upcoming COP29 negotiations to explain what’s at stake and what needs to happen in Baku to drive rapid progress in key areas:
Delivering a New Climate Finance Goal
COP29 has been dubbed the “Finance COP,” with the centerpiece of the negotiations focused on adopting a new climate finance target. For the first time in 15 years, countries will reevaluate the amount and type of finance developing countries receive to pay for climate action. This will result in a new collective quantified goal (NCQG) on climate finance to replace the previous $100 billion annual target set in 2009. Setting a more ambitious goal will be essential to helping vulnerable countries adopt clean energy and other low-carbon solutions and build resilience to worsening climate impacts. Indeed, many developing countries cannot fulfil or strengthen their climate pledges without it.
For the last three years, countries have participated in a series of technical negotiations aimed at shaping the NCQG. Yet, basic questions about the goal’s size and structure remain on the table. In Baku, negotiators and political leaders are tasked with finally reaching an agreement.
One key decision is what top-line dollar figure the NCQG will aim for. Different countries and organizations have suggested annual climate finance targets ranging from the billions to the trillions. Currently, it seems likely that the goal will consist of multiple targets reflecting different types of finance flows, such as public versus private. Other key considerations include which countries will provide finance, whether certain financial instruments (such as grants or concessional loans) will be favored, and what reporting will be required to promote transparency.
The NCQG is not intended to solve all climate finance issues, but it is a crucial piece of the puzzle. COP29 will be an opportunity to adopt a robust new finance goal that allows countries to meet and increase their climate ambition in the coming years. The summit’s outcome can also call for reforms by all actors in the climate finance sphere — including multilateral development banks and others — to increase climate finance overall, unlock more private finance, bring in new, innovative sources of funding, and ensure all sources of financing support a just and equitable low-carbon transition.
Showcasing More Ambitious National Climate Commitments
Countries are due to announce new national climate commitments — known as nationally determined contributions (NDCs) — in 2025. These pledges form the foundation of the world’s collective efforts to tackle climate change under the Paris Agreement. Several major emitters have indicated that they will announce or release their new climate commitments by this year’s COP, including Brazil (the host of next year’s UN climate summit), the United Kingdom and the United Arab Emirates. By putting forward stronger, more ambitious pledges, these countries can set a high bar for the current round of NDCs and encourage other nations to step up their own commitments.
Specifically, next-generation NDCs should include new economy-wide greenhouse gas (GHG) emissions reductions targets for 2035 and stronger targets for 2030 that collectively set the world on track to limit temperature rise to 1.5 degrees C (2.7 degrees F). These near-term benchmarks are critical. Unless the world can dramatically reduce emissions by 2030, it will become impossible to make up enough lost ground by 2035 to hold warming to 1.5 degrees C with no or limited overshoot and avert increasingly devastating climate impacts. Near-term targets should also place countries on credible paths to reach their own net-zero goals by or around mid-century.
Achieving topline emissions targets, as well as building resilience to climate risks and ensuring a just transition, will require transformational changes across every sector of the economy. To spur such far-reaching shifts, NDCs should establish sector-specific targets (such as for energy, transportation and agriculture) and prioritize related actions informed by the Global Stocktake. This can help jumpstart implementation by prompting policymakers across government to integrate climate ambitions into all plans and policies. Clear targets can also signal the direction of travel to investors, including in the private sector, to help direct more finance toward climate action.
Committing More Funding for Loss and Damage
The climate crisis has escalated to the point where some impacts already go beyond what people can adapt to, such as the loss of life and livelihoods due to extreme floods and wildfires or the disappearance of coastal heritage sites due to rising seas. In the UN climate negotiations, this is referred to as “loss and damage.”
On the first day of COP28, the Fund for Responding to Loss and Damage (FRLD) was set in motion to provide financial resources to developing countries grappling with these challenges. Since then, the World Bank has confirmed arrangements as trustee, the Philippines was chosen as the host country for the Fund’s board, and Senegalese-American Ibrahima Cheikh Diong was appointed as the first Executive Director. Other institutional arrangements are currently underway, including a resource mobilization plan that’s expected to be in place by 2025.
The next step is filling the fund’s coffers. Roughly $700 million was pledged at and since COP28; this is a start, but it pales in comparison to the $580 billion in climate-related damages that developing countries could face by 2030. At COP29, developed countries should announce new pledges so support can start flowing to countries in need. Another open question is whether the NCQG will include loss and damage and/or have a dedicated sub-goal for this purpose.
Enhancing Adaptation Finance and the Global Goal on Adaptation
At COP29, countries should also work toward closing the adaptation finance gap, which is currently around $194-$366 billion per year and growing. In 2021, countries agreed to double adaptation finance by 2025 as part of the Glasgow Climate Pact. Developed countries are preparing a report to be shared by COP29 to show progress towards this goal, as urged in the Global Stocktake outcome last year. Meanwhile, negotiators can support resilience efforts in developing nations by ensuring that the NCQG puts adaptation funding on par with mitigation and recognizes the need for adaptation finance to be offered with more flexible, low-interest terms.
Another focus in Baku will be how to strengthen the Global Goal on Adaptation (GGA), a collective commitment aimed at accelerating all countries’ adaptation efforts. At COP28, countries adopted a framework for the Global Goal on Adaptation which lays out targets to be achieved by 2030. They also initiated a two-year work program to determine how adaptation efforts will be measured. At COP29, negotiators will work to reach agreement on a manageable set of indicators for tracking progress and finance flows at both the national and local levels.
Leveraging Carbon Markets to Drive Climate Action
Article 6 of the Paris Agreement allows countries to trade carbon credits toward achieving their national climate goals. For example, a country rich in tropical rainforests could sell credits to generate funds for forest protection; countries purchasing the credits would count the resulting emissions reductions toward their own NDCs targets. Rules for how these carbon markets work still need to be ironed out before trading can begin, which negotiators will work on in Baku. Getting these rules right it is exceedingly important to ensure that international carbon markets under Article 6 — which are different from voluntary markets and are governed by international standards — are environmentally sound and do not risk undermining global emission cuts.
Since failing to reach full agreement on the Article 6 rules at COP28, Parties have made some progress in finding common ground. The Supervisory Body for the newly named Paris Agreement Crediting Mechanism (PACM), which involves carbon crediting between countries and various other entities, recently reached conclusions on two standards (methodology requirements and activities involving removals) that provide the technical underpinnings for carbon crediting. They also determined that all projects under the crediting mechanism must comply with environmental and human rights safeguards.
But several technical yet important issues still need to be hashed out in Baku, including:
- whether the Supervisory Body’s approach for setting standards will go forward;
- how to address authorization of carbon credits, including whether a country can revoke authorization of credits they’ve previously authorized;
- whether credits will have to go through a technical review process before they can be used;
- and whether or not developing countries with limited resources can use the international trading registry for credit transactions.
Boosting Transparency Around National Climate Action
COP29 will be an important milestone for operationalizing the Paris Agreement’s enhanced transparency framework, as countries are required to submit their first biennial transparency reports (BTRs) by the end of the year. These reports will contain a wealth of information on how countries are addressing climate change, including their efforts to reduce GHG emissions; their adaptation projects and plans; and how much financial support they have provided, mobilized, received or need. These first reports will also detail the progress — or lack thereof — that countries are making towards their 2025 and 2030 NDC targets, offering a useful resource to inform the next round of NDCs and other decision-making.
Preparing biennial transparency reports is an extensive and complex process. In particular, developing countries with less experience reporting on their climate efforts internationally will require capacity building support. Recognizing these challenges, the Azerbaijani presidency has launched the Baku Global Climate Transparency Platform to bring greater attention to the importance of reporting and value of transparency and has hosted several regional workshops to support reporting efforts.
Demonstrating Progress Toward Collective Climate Commitments
Outside of the formal negotiations, the COPs are also a space for governments, the private sector, cities and others to commit to working together collaboratively to advance climate action. Over the last few years, the number of so-called “cooperative initiatives” has grown significantly. Several have been key outcomes from recent summits, such as pledges to ramp up renewables, phase down fossil fuels, promote urban climate action, green the finance industry, halt deforestation and more.
Yet, while these pledges are a positive sign of growing ambition, WRI research shows that most lack transparency mechanisms to track whether governments and others are delivering on them.
COP29 is an opportunity for these actors to demonstrate real progress on the many commitments made to date. For existing initiatives, that means publicly communicating progress through the UNFCCC’s Global Climate Action Portal or by publishing progress reports. This would help advance understanding on the role that cooperative efforts can play in supporting ambitious action. Governments signed up to various initiatives should also consider reflecting contributions to these in their NDCs. And new initiatives announced at COP29 should build in clear operational plans to enable transparency about future progress.
COP29: Unlocking Climate Action for All
COP29 presents a historic opportunity to ramp up global climate ambition. A strong finance outcome in Baku will help ensure that all nations — including the poorest and most vulnerable — have the resources they need to pursue low-carbon development, support communities and workers, and protect themselves from escalating climate threats. To succeed, this outcome must be paired with clear supportive signals from other international arenas and institutions, including the G20 and multilateral development banks. Public, private, domestic and international finance must be able to work together as a system to enable the transformational change.
At a moment when countries are reevaluating their climate commitments, COP29 also offers a chance for major emitting nations to demonstrate stronger leadership, putting forward more ambitious climate plans and recommitting to their past promises. Developed nations should set an example with new and updated NDCs that chart a clear course toward low-carbon, climate-resilient, nature-positive and inclusive economies.
In short, a strong outcome in Baku can help unlock a safer, more prosperous and more equal future for everyone.
Stay up to date on the latest COP29 news, articles and events at WRI’s COP29 Resource Hub.
