After two weeks of fraught negotiations at the UN climate summit (COP29) in Baku, Azerbaijan, delegates eked out an agreement on a new climate finance goal.
The new goal of at least $300 billion annually by 2035 is triple the amount of the previous target, aiming to mobilize much-needed finance for developing countries to cut emissions and address the mounting impacts of climate change. But while the new target is an important down payment for a safer, more equitable future, it is far less than developing countries need to pursue low-carbon development and protect their citizens from increasing droughts, floods and wildfires.
In addition, countries failed to reach consensus on how or whether to acknowledge the outcome from last year’s climate summit, which calls for nations to transition away from fossil fuels. The issue was ultimately punted to future negotiating sessions.
Many developing country representatives left the summit deeply disappointed and frustrated that wealthier countries didn’t put more money on the table. “Once again, the countries most responsible for the climate crisis have failed us,” said the Least Developing Countries Group in a statement. “We leave Baku without an ambitious climate finance goal, without concrete plans to limit global temperature rise to 1.5 degrees C, and without the comprehensive support desperately needed for adaptation and loss and damage.”
While the outcome did demonstrate that countries are still committed to working together on climate action — even if imperfectly — more ambition is essential, especially in the run-up to COP30 in Belém, Brazil.
Here, we offer a deeper dive on the key outcomes from COP29 and what lies ahead:
Climate Finance
What happened?
As expected, finance was the center of attention at COP29. The stakes were high, given how crucial external finance is for enabling all developing countries to transition to a low-carbon and climate-resilient path, and the close relationship between ambition and finance. Against the backdrop of an Olympic-sized stadium, negotiators thrashed out their significantly different starting positions and crossed the finish line with a way forward.
The cornerstone of the new agreement is an upgraded finance goal of at least $300 billion annually by 2035, replacing the previous goal of $100 billion annually by 2020 and through 2025. This goal is comprised of public finance, plus private finance that is specifically leveraged by that public finance. But while $300 billion is triple the previous target, it is below the target that could have been reached and far from sufficient to meet the total needs of developing nations. This left many around the world understandably angry and frustrated.
As with the previous goal, developed countries will take the lead on mobilizing finance. Unlike the previous goal, however, the new agreement allows for developing countries’ contributions to multilateral climate finance and their own bilateral finance to be voluntarily counted towards the goal. Even though they can opt out, this is a notable shift in the willingness of certain developing nations to officially and voluntarily contribute to the goal. Since previously only 70% of MDB finance was counted toward the $100 billion goal — reflecting the proportion of capital provided by developed countries — the $100 billion and $300 billion goals can’t be compared as apples to apples.
Recognizing the need for further funds, the COP29 outcome also called on all actors to work toward enabling $1.3 trillion in finance for developing countries by 2035, encompassing the $300 billion as well as finance from other sources, such as significant private sector flows. This $1.3 trillion number is much closer to the level of finance needed by developing countries to protect themselves from escalating climate impacts and get on a low carbon pathway. Parties agreed to launch a “Baku to Belém Roadmap” on how to muster the additional trillion.
In addition to raising more finance, the adoption of the new goal was also an opportunity to try to address finance quality and access. For some developing nations, the type of finance — for example, grants versus loans and how easy it is to access — was just as important as the amount. Some also felt that the distribution of funds should be a central focus to ensure that finance reaches the poorest and most vulnerable countries.
The final decision text is light on addressing these issues. It does mention the special circumstances of Least Developed Countries (LDCs) and small island developing states (SIDS) and urges easier access to finance through, for example, simplified application and disbursement processes. It also calls for a special assessment of access to climate finance. However, the agreement stays away from some of the more concrete demands, such as setting specific finance targets based on regions, income levels or types of spending (for example, for adaptation). This left some nations concerned that they will continue to struggle to receive enough finance.
To track progress, the new goal turns to the existing enhanced transparency framework of the Paris Agreement and establishes a progress report for 2028. Its implementation will also be considered as part of the Global Stocktake before 2035, including a revision in 2030.
What’s next?
As countries look to COP30 in Belém, the next year will be crucial for delivering existing international public finance commitments. The current goals to double adaptation finance and provide $100 billion in climate finance annually will both come to an end in 2025. Countries must continue to follow through on these commitments while setting their sights higher moving forward.
Countries can also explore ways to build on the $300 billion goal, including working with international financial institutions on further reform, using innovative finance and capital enhancement, and engaging through the Global Solidarity Levies Task Force (which aims to explore feasible options for climate levies). Next year also offers opportunities to deepen discussions on debt in low- and middle-income countries, including through the Expert Review on Debt, Nature and Climate, which will publish its final report in spring 2025.
Much work is needed to ensure that the full financial system — including the private sector, countries’ own resources and national development banks — scale and align their financial flows with the goals of the Paris Agreement. The last Sharm el-Sheikh dialogue on how to carry out Article 2.1c (which entails aligning the whole financial system with global climate mitigation and adaptation needs) will take place ahead of COP30.
Implementing the Global Stocktake Outcome
What happened?
At COP28 in Dubai, the first Global Stocktake (GST) assessed collective progress against the Paris Agreement and laid out next steps for implementation. The summit’s most notable outcomes included a historic call for countries to transition away from fossil fuels, together with goals on scaling up renewable energy, cutting transport emissions and protecting forests.
All of this was meant to inform the next generation of national climate plans (known as “nationally determined contributions,” or NDCs), due in 2025 ahead of COP30.
Discussions at COP29 centered on how to take these groundbreaking outcomes forward, primarily under the framework of the United Arab Emirates dialogue. However, divergent views emerged over the dialogue’s scope. Some countries argued that discussions should focus exclusively on scaling up finance, while many others insisted on addressing the full range of GST outcomes, including the transition away from fossil fuels.
Another flashpoint was whether the draft COP29 decision text on the UAE dialogue sufficiently reiterated the GST’s energy and nature outcomes, particularly on the fossil fuel transition. Several countries argued that omitting explicit references to fossil fuels would be a troubling setback. Despite efforts by the COP29 presidency to bridge divides, negotiators failed to achieve consensus and deferred these discussions to next year.
What’s next?
Discussions will resume at the UNFCCC intersessional talks in Bonn, Germany in June 2025, with the aim of reaching a resolution by COP30 in November 2025. The deferral also extended to other mitigation-related agenda items, including elaborating features for countries’ new NDCs.
Despite this setback, countries now have a critical opportunity to take forward key mitigation objectives in their NDCs, which are meant to be informed by the Global Stocktake outcomes — including incorporating economy-wide emissions reductions for all greenhouse gases (GHGs), transitioning away from fossil fuels, and taking significant action on renewable energy, transport and forests.
National Climate Plans (NDCs)
What happened?
Countries’ next round of NDCs, due early next year, will set their emissions-reduction targets for 2035 (ideally, alongside strengthened targets for 2030) and highlight measures they will implement across specific sectors. Some countries set this process in motion by unveiling their new NDCs at COP29, including:
- The United Arab Emirates (UAE) was the first to submit a new NDC, committing to cut GHG emissions 47% by 2035 relative to 2019. The pledge also highlights sectoral targets (such as for power, industry and transport) that could help deliver its topline emissions-reduction goal. While both are important steps forward for the UAE, the new 2035 target is undermined by a relatively unambitious target for 2030 and current policies that perpetuate fossil fuel production.
- The United Kingdom announced its target to reduce GHG emissions at least 81% by 2035 compared to 1990. If fully implemented, this new target makes a credible contribution to the global goal of holding temperature rise to 1.5 degrees C, according to analysis from the U.K.’s Climate Change Committee, and charts a steep trajectory to reach net-zero emissions, building on a relatively strong 2030 target. Achieving these targets, however, will require the U.K. to strengthen its current policies and investments, particularly those focused on rapidly reducing fossil fuel use.
- Brazil’s new NDC commits to cut emissions 59%-67% from 2005 levels by 2035. Achieving a 67% reduction in GHG emissions would place Brazil on a pathway to net zero and signal its willingness to tackle the climate crisis head-on, while delivering the lower end of this range would call the country’s ambition into question. The Brazilian NDC is also notable for improving coordination with cities and other subnational actors, which are critical for overcoming the climate crisis, through projects such as the CHAMP initiative.
A coalition of both developed and developing countries — including Canada, Chile, the EU, Mexico, Norway, Panama, Switzerland and U.K. — pledged at COP29 to submit NDCs featuring topline, economy-wide targets that chart a steep path to their own net-zero targets. Notably, when joining the group, Mexico became the last G20 nation to commit to achieving net-zero emissions by 2050.
In addition, at the G20 Summit and during the second week of the COP, Indonesian President Prabowo Subianto expressed optimism that his country’s GHG emissions would reach net zero by 2050 — a full decade earlier than previously announced. He also said Indonesia will aim to phase out all fossil fuel power plants, including its large fleet of coal plants, within the next 15 years. However, replacing that electricity will require much more than the 75 GW in renewable energy the country has promised by that time.
What’s next?
All countries must come forward with new climate commitments ahead of COP30. (Although NDCs are officially due in February 2025, some will realistically come later in the year.)
The focus should be on major emitters, which must lead efforts to dramatically cut emissions. This includes setting robust near-term targets that put net-zero goals within reach. Crucially, countries should also embed climate action at the core of their economic and sectoral strategies — including in their NDCs — with decisive efforts to rapidly transition away from fossil fuels and towards a zero-carbon, climate-resilient future.
Carbon Markets
What happened?
After years of negotiation, COP29 took some key steps towards operationalizing the Paris Agreement’s Article 6 on carbon markets. These include agreeing on guidelines for the provisions in Article 6.2, which involve carbon trades between countries (known as Internationally Traded Mitigation Outcomes, or ITMOs), and for the Article 6.4 provisions that involve carbon crediting between a country and another entity under the Paris Agreement Crediting Mechanism (PACM), usually considered a successor to the Clean Development Mechanism (CDM).
COP29 started with an agreement on the first day to move forward a set of standards adopted by the PACM Supervisory Body, including ones involving carbon removals, methodologies for crediting, and social and environmental safeguards. However, countries requested that the Supervisory Body elaborate on the standards and return to next year’s COP in Belém with an update.
Countries also agreed to some additional technical but important guidelines that will allow Article 6 to enter into operation. One of these related to ITMOs between countries, stipulating that once a credit has been traded, the authorization of that credit cannot be changed by the issuing country without prior agreement (in other words, trades cannot be retroactively changed). In addition, negotiators agreed that if inconsistencies are found between the information provided about credits and a review by a technical body, then countries cannot use those credits toward achievement of their NDCs.
What’s next?
Following the decision on the PACM standards on the first day of the COP, the Supervisory Body for the Article 6.4 mechanism must now further clarify these standards. A few issues still remain for countries to iron out in future years, including technical guidance on corresponding adjustments in case of single- and multiple-year NDCs, and matters related to emissions avoidance.
Despite the scope for further work, Article 6 can now enter into effect and countries can begin taking steps to trade credits. Scrutiny will be critical to ensure that credits are credible, result in emissions reductions, and adhere to environmental and social safeguards.
Adaptation
What happened?
The Paris Agreement established a goal to enhance adaptation, strengthen resilience and reduce vulnerability to climate change. But this “Global Goal on Adaptation” (GGA), as it’s called, still hasn’t been implemented. COP28 yielded some results when countries agreed to a framework for global climate resilience that included a range of targets, and established a two-year work programme to determine which indicators would be used to measure progress against the global adaptation goal. Negotiators were meant to make further progress at COP29 by selecting indicators, but discussions were derailed.
Negotiations quickly got mired in whether there should be indicators for “means of implementation,” which refers to capacity-building, technology transfer and financial support. Some developing countries advocated for means-of-implementation indicators while some developed nations argued against them. Ultimately, a compromise was reached to develop “enablers of implementation” for adaptation, which are not quantifiable. Such enablers include means of implementation but also refer to things like governance and transparency.
Delegates agreed to include the GGA on the agenda for future meetings.
National Adaptation Plans (NAPs) were also a key topic for discussion. NAPs allow countries to set out plans for how they will adapt to the impacts of climate change by reducing vulnerabilities and building resilience. Although considerable progress was made during the negotiations, countries failed to reach agreement on key issues, and new text on NAPs was ultimately not included in the final COP29 decision. The draft text worked on at COP29 will form the basis for debates in Bonn in June.
Outside the negotiations, the Adaptation Fund, which has struggled to meet its yearly target of $300 million since 2022, got a boost when Germany announced a new pledge of €60 million ($63 million). The new funds bring the total amount to around $124 million.
What’s next?
A hybrid technical workshop is planned for mid-2025 to facilitate experts’ work on the GGA, with the aim of developing a set of no more than 100 globally and nationally applicable indicators to be considered at COP30. This is meant to help build an inclusive, data-driven and transformative adaptation framework, with minimal reporting burdens and accommodating diverse national contexts. Additionally, a special event will take place at the 2025 climate talks in Bonn, where the IPCC will provide an update on its work in this area, including the ongoing revision of its 1994 technical guidelines for assessing impacts and adaptations.
Loss and Damage
What happened?
Countries conducted a review of the Warsaw International Mechanism for Loss and Damage (WIM), which takes place every five years. The WIM has three main purposes in supporting responses to “loss and damage,” or the impacts of climate change that are so severe they cannot be adapted to. These include:
- enhancing knowledge and understanding of risk management;
- strengthening dialogue, coherence, coordination and synergies among relevant stakeholders;
- and enhancing action and support (such as finance, technology transfer and capacity building).
At COP29, countries were not able to agree on key issues of the WIM’s review, such as voluntary guidelines on incorporating loss and damage in NDCs or details of a proposed “state of loss and damage” report. Negotiators punted these issues to Bonn.
Beyond the negotiations, it was particularly notable that more countries and subnational entities announced pledges to the Fund for Responding to Loss and Damage (FRLD), established in 2023 to help developing countries address losses and damages. Australia, Austria, Luxembourg, New Zealand, South Korea and Sweden pledged funds, as well as Wallonia, a region in Belgium. These pledges add $85 million to the $674.4 million already pledged to the fund — still a far cry from the $580 billion in yearly losses and damages anticipated by 2030. It will be important to verify that these pledges represent new and additional finance, rather than repackaging previous commitments.
What’s next?
At the Bonn climate talks, countries will once again review the WIM and attempt to achieve consensus. Countries should also make good on their pledges to the FRLD as soon as possible as well as add more funds.
Cooperative Initiatives
What happened?
The last few years have seen a rise in “cooperative initiatives” launched during COPs, which provide opportunities outside the formal negotiations for governments, the private sector, cities and others to work together to fight climate change. This was also true at COP29, with the COP29 Presidency launching several pledges and governments and other stakeholders signing on, including:
- Thirty countries — representing nearly 50% of all methane emissions from organic waste — signed the COP29 Declaration on Reducing Methane from Organic Waste. Delivering on this pledge will require addressing food loss and waste and elevating it as a political priority. The 2024 declaration builds on the Global Methane Pledge launched at COP26 in Glasgow, which now has 159 signatories and has delivered 100 national plans with methane targets and committed $2 billion in grants for methane abatement.
- More than 100 countries agreed to increase global energy storage sixfold. This builds on the outcomes from COP28’s Global Stocktake on increasing renewable energy and energy efficiency, completing “the trifecta of global goals we need to build the clean, secure, resilient power system.”
- The COP29 Presidency also launched several “continuity coalitions” to bring together previous COP presidencies and other international organizations, with the purpose of ensuring that sectoral pledges build upon one another and do not duplicate efforts. These continuity initiatives include work with UN-Habitat on urban climate action, with the World Health Organization on climate and health, and with the UN Food and Agriculture Organization on the role of farmers in addressing climate change, among others.
What’s next?
As the scale of climate challenges grows, a recent WRI progress report shows efforts in areas like energy, halting forest lost, transforming food systems and shifting to low-carbon transport are largely off-track to achieve climate goals. New pledges, declarations and initiatives can be helpful in spurring action, but only if they lead to real change. As WRI events at COP29 highlighted, collaborative efforts should embrace regular reporting of progress towards goals, laying out how their efforts are contributing to the initiative’s goals as well as challenges limiting further cooperative action.
Building on Baku’s Outcomes
The climate finance agreement reached in Baku sets an important, albeit modest, foundation to help developing countries transition to a low-carbon future and protect their citizens from climate impacts. The hard work continues — from Baku to Belém and beyond — to scale up public climate finance and align wider finance with the Paris Agreement’s goals, sending a signal to developing countries on likely investment flows as Parties prepare their next NDCs.
The next year will also test countries’ willingness to rapidly slash emissions and build climate resilience. Global emissions need to be cut 60% below 2019 levels by 2035; countries should rise to this level of ambition in their NDCs, backed by sectoral commitments, strong and effective policies, investment signals, and society-wide efforts to combat climate change and protect people from its impacts. As we head toward COP30, these steps are essential to accelerating progress toward a safer, more prosperous future for all.
