Less than a week to go until COP 29, what's on agenda this time?

With days until the world summit in Baku, the capital of Azerbaijan, the key negotiations will revolve around money. From 11 to 22 November, COP 29 is drawing attention, predicted to become the "COP of finance."

Representatives from countries and organizations worldwide will discuss how to ensure finance can mitigate climate change, facilitate adaptation, and promote the energy transition.

COP (or climate summit) refers to the United Nations Climate Change Conferences, where topics discussed and decided include actions to stop climate change, achieve the Paris Agreement objectives (keep warming below 2°C and as close as possible to 1.5°C compared to pre-industrial levels), and establish measures to adapt to consequences like rising temperatures and extreme weather events.

Climate finance

COP29’s central theme is climate finance, particularly the New Collective Quantified Goal (NCQG). This goal is crucial for aligning global financial flows with the needs of developing nations, ensuring they receive support to mitigate climate change impacts, adapt to challenges, and transition to greener energy sources.

In 2009, developed nations pledged to mobilize $100 billion annually by 2020 to support developing countries in their climate initiatives. However, this target was only met in 2022, and experts, including those at the World Resources Institute (WRI), argue the sum now falls short. At COP29, delegates will strive to establish a new financial target reflecting the current climate landscape to take effect in 2025.

Simon Stiell, Executive Secretary of UN Climate Change, emphasized the importance of COP29, stating, “COP29 must be a strong COP, recognizing climate finance is critical to save the global economy and billions of lives from climate impacts.” The summit’s outcome will be crucial for setting financial commitments to respond to the needs of vulnerable nations.

COP28 in Dubai marked a historic moment as it was the first summit to highlight the necessity of phasing out fossil fuels. Non-binding agreements for net-zero carbon emissions by 2050 and to triple renewable energy capacity by 2030 were reached. The summit also approved a loss and damage mechanism to compensate developing countries for climate damage.

COP28 left unresolved key issues for COP29's agenda, including operationalizing the loss and damage fund, enhancing carbon market regulations, and defining mechanisms for adaptation finance. For COP29 to succeed, negotiators must address these items, paving the way for meaningful financial and policy actions.

Key Objectives of COP29

While climate finance is the linchpin of COP29, the summit will tackle other vital issues:

1. Nationally Determined Contributions (NDCs)

COP29 will push nations to enhance their climate commitments through Nationally Determined Contributions (NDCs) to curb emissions and adapt to climate changes, crucial for global coordination. With the NDC update deadline soon after COP29, this summit is a significant opportunity to set higher benchmarks and expectations for countries' climate pledges.

The Forum says private sector involvement needs to be stepped up, as many financing schemes have been based on assumptions about private capital behaviour. The private sector is best placed to set the prerequisites for capital flow, and its input should be sought quickly and systematically.

2. Loss and Damage Fund

The pledged amount to the Loss and Damage Fund, still forming and whose board meeting will be in the Philippines, is tiny compared to estimated global needs. Before that amount can be raised, the fund needs to quickly meet several requirements.

A key decision will be the private sector’s involvement. The Transition Committee proposed the fund receive contributions from “non-public and alternative sources, including new and innovative financing.” Other non-climate funds, like Gavi and the Global Fund, receive private funding.

3. Carbon Markets

In recent years, carbon markets have become a flashpoint in international climate politics due to their mixed results. They have demonstrated potential as a debt-free way to channel funding from large emitters into clean or green energy projects. However, a lack of rigour means carbon markets often fail to drive real emissions reductions, diverting funds to unnecessary or unverifiable places and enabling greenwashing.

Article 6 of the Paris Agreement created principles for carbon markets and ways for countries to cooperate on climate goals. While rules were agreed at COP26, negotiations are needed to establish operational guidance.

A fully operational Article 6 would improve carbon markets through reviewable bilateral agreements and a centralized multilateral market, the Forum said. To get there, negotiators must agree on definition and content, project eligibility and review processes, and confidentiality, among other issues.

Two COPs have failed to get Article 6 operational. Countries and entities struck some deals, but real scale is lacking. As anti-greenwashing sentiment rises and companies back away from climate pledges, a well-functioning carbon market within the machinery of the United Nations Framework Convention on Climate Change (UNFCCC) is crucial.

4. Direct adaptation

Mitigation has frequently overshadowed adaptation, but it is essential as climate impacts get worse. COP29 is a crucial opportunity to prioritise adaptation and secure resources.

With some climate change impacts unavoidable, robust adaptation strategies are essential. National Adaptation Plans (NAPs) are vital tools, and COP29 should increase support for their development and implementation, focusing on financial and technical assistance. Closing the adaptation financing gap is critical; donor countries must honour their commitments and explore innovative financing mechanisms, including private sector investments, to enable vulnerable countries to prepare for climate challenges.

Role of host: What is Azerbaijan's climate policy?

COP28 faced controversy, criticism, and skepticism. The summit was held in the United Arab Emirates (UAE), the seventh-largest oil producer and an OPEC member, chaired by Sultan al Jaber, UAE's industry minister and CEO of Abu Dhabi's national oil company.

This year’s climate summit will be held in Baku, Azerbaijan. The Caucasian country, located between Asia and Europe with access to the Caspian Sea, has implemented measures for its energy transition.

“Azerbaijan is committed to developing its renewable energy potential, which is an important part of the country’s plan to reduce greenhouse gas emissions by 40% by 2050,” the official COP29 website notes. “The country intends to increase renewable energy capacity to 30% by 2030 and diversify its existing energy system to become a leader in green energy.” The website also notes Azerbaijan’s commitment to update its NDCs to meet the Paris Agreement goals.

Zero Carbon Analytics highlights the role of gas production and export in Azerbaijan's energy sector. In early 2024, the country increased its exports, especially to Europe, to reduce the continent's dependence on Russian gas.

From 11 to 22 November 2024, the world will focus on Baku for the COP29 meetings, where the future of the climate change fight will be decided.

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