The Baku Climate Change Conference (UNFCCC COP 29) delivered what the Earth Negotiations Bulletin (ENB) describes as "a milestone agreement that will inform climate action for years to come." Countries set a new collective quantified goal (NCQG) on climate finance. The operationalization of the mark Contact online >>
The Baku Climate Change Conference (UNFCCC COP 29) delivered what the Earth Negotiations Bulletin (ENB) describes as "a milestone agreement that will inform climate action for years to come." Countries set a new collective quantified goal (NCQG) on climate finance. The operationalization of the market-based cooperative implementation of the Paris Agreement (Articles 6.2 and 6.4) was another major outcome. Yet, parties could not reach agreement on a number of issues.
The ENB summary report of COP 29 notes that the NCQG decision "calls on all actors to work together to scale up financing to developing countries for climate action from all public and private sources to at least USD 1.3 trillion per year by 2035." It sets a goal of at least USD 300 billion per year by 2035 for developing countries'' climate action. This money is to come from a wide variety of sources, including public and private, bilateral and multilateral, as well as alternative sources, with developed countries taking the lead. "Developing countries are encouraged to make contributions on a voluntary basis," ENB writes.
Also in the context of the NCQG, countries agreed "to pursue efforts to at least triple annual outflows from the key climate funds from 2022 levels by 2030 at the latest." "The decision also acknowledges the need for public and grant-based resources and highly concessional finance, particularly for adaptation and responding to loss and damage," especially for the least developed countries (LDCs) and small island developing States (SIDS), among other vulnerable countries with significant capacity constraints, ENB notes.
The NCQG is an extension of the USD 100 billion per year by 2020 goal, and negotiations towards it were difficult. According to ENB, developed countries wanted to expand the contributor base to include "other parties in a position to contribute," while developing countries called for a higher quantum. Some called for specific targets on the provision of public finance and finance mobilization. LDCs and SIDS called for minimum allocation floors for their groups.
The Baku Climate Change Conference saw the many years of negotiations on the modalities for setting up the Paris Agreement''s carbon markets come to conclusion. "The Article 6.2 decision will allow the Secretariat to provide registry services to countries that request it, allowing them to issue mitigation outcomes as units, and these services would be interoperable with the international registry," the ENB analysis of the meeting explains. The Article 6.4 methodologies and removals requirements were also adopted, and "[t]he first Article 6.4 issuances can roll out as early as 2025."
According to ENB, many were disappointed about the lack of agreement in Baku on whether and how to take forward the GST outcomes, especially considering the importance of the next round of NDCs, to be submitted in 2025, to avoid overshooting the 1.5°C goal.
The Baku Climate Change Conference convened from 11-22 November 2024 in Baku, Azerbaijan. It consisted of the 29th session of the Conference of the Parties (COP) to the UNFCCC, the 19th meeting of the Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol (CMP 19), the sixth meeting of the Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement (CMA 6), and the 61st sessions of the Subsidiary Body for Scientific and Technological Advice (SBSTA 61) and the Subsidiary Body for Implementation (SBI 61). [ENB Coverage of Baku Climate Change Conference]
The conference marked a significant shift from theoretical commitments to actionable strategies while emphasizing financial equity, technological innovation, and inclusivity in climate governance.
The 29th Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) that was held between 11 – 22 November in Baku, the capital of Azerbaijan, was an important moment in the effort to fight against climate change in the global level. Gathered on the eve of the mounting evidence of the escalating impacts of climate change, the conference aimed to increase tangible solutions to pressing global challenges like rising temperatures, biodiversity loss, and the socio-economic disparities that are intensified by climate crises. The conference marked a significant shift from theoretical commitments to actionable strategies while emphasizing financial equity, technological innovation, and inclusivity in climate governance.
The selection of Azerbaijan as the host country for COP29 was iconic of the complex dynamics during the transition to sustainable development. As a country that historically has a reliance on fossil fuels, like oil and natural gas, the efforts of Azerbaijan to position itself as a leader in the region in terms of green technology and renewable energy shows the broader challenges and opportunities faced by emerging economies worldwide. While located at the crossroads of East and West, Europe and Asia, Azerbaijan also offered a significant platform for increasing cooperation between developed and developing countries and among diverse stakeholders, such as governments, civil society, academia and the private sector.
In this regard, the aim of this paper is to analyse the overall outcomes and benefits of COP29, while highlighting its role to address important areas like climate finance, carbon markets, renewable energy transitions, urban resilience, and inclusivity. By emphasizing the international and local benefits of COP29, it sheds light on the transformative potential of conference in shaping future climate policies and fostering sustainable development.
Key Outcomes and Contributions
Moreover, during COP29, a pivotal decision was reached to fully operationalize the Loss and Damage Fund, a long-anticipated step for developing nations, including small island states, least developed countries, and African nations. This initiative aligns with the priorities outlined by the President of the Republic of Azerbaijan, Mr. Ilham Aliyev, in addressing the challenges of climate change impacts on small island states under Azerbaijan’s COP29 Presidency.
Promoting Renewable Energy Transitions: Azerbaijan utilized COP29 as an opportunity to showcase its renewable energy initiatives, including large-scale solar and wind energy projects and the establishment of green energy zones. These projects highlight the feasibility of transitioning from fossil fuel dependency to sustainable energy systems. The COP29 Hydrogen Declaration, launched during the conference, emphasized the role of hydrogen technologies in decarbonizing energy systems and addressing emissions in hard-to-abate sectors. Azerbaijan''s leadership in renewable energy innovation serves as a model for other nations, demonstrating the transformative potential of emerging economies in the global energy transition.
Enhancing Urban Resilience and Sustainable Cities: Urban areas, as both major contributors to greenhouse gas emissions and critical arenas for climate action, were a focal point of COP29. The Baku Multisectoral Actions Pathways (MAP) Declaration introduced comprehensive strategies to enhance urban resilience through investments in green infrastructure, sustainable transportation, and urban planning. This initiative reflects a recognition of the urgent need to transform cities into inclusive, low-carbon, and climate-resilient hubs.
Fostering Inclusivity and Education: Inclusivity emerged as a central theme at COP29, with dedicated initiatives aimed at ensuring gender equity, youth participation, and climate literacy. The extension of the Lima Work Programme on Gender for another decade underscores the importance of addressing the needs and contributions of women and marginalized communities in climate governance. Azerbaijan''s integration of climate literacy into the Program for International Student Assessment (PISA) highlights the role of education in fostering sustainable behaviour and equipping future generations to address climate challenges. By emphasizing intergenerational collaboration and inclusivity, COP29 set a new standard for equitable climate action.
Leadership in Climate Governance: Azerbaijan''s active engagement in COP29 exemplified its growing leadership in climate governance and its ability to influence global dialogues on sustainable development. The country''s strategic focus on transitioning to a low-carbon economy, underpinned by advancements in renewable energy deployment and sustainable urban development, positioned it as a role model for other emerging economies. By showcasing tangible progress in these areas, Azerbaijan demonstrated the feasibility and importance of integrating sustainable practices into national development strategies.
Knowledge Exchange and Technological Innovation: The platform provided by COP29 enabled critical knowledge exchange and the adoption of cutting-edge technologies aimed at addressing climate change. Innovations in renewable energy, urban planning, and climate adaptation were shared among stakeholders, fostering collaborative approaches to shared environmental challenges. These exchanges are expected to accelerate Azerbaijan''s transition toward achieving its national climate targets and broader sustainable development goals. The introduction of these advanced practices also highlights the importance of international cooperation in fostering technological innovation and building capacity for addressing the climate crisis.
COP29 that was held in Baku, highlighted a transformative moment in global climate governance, offering a platform for countries to move from political rhetoric to real action. While President Aliyev referred to the "Baku breakthrough" as a triumph of multilateralism, the conference itself demonstrated the strength of international cooperation in tackling the climate crisis, focusing on areas such as climate finance, carbon markets, renewable energy transitions, urban resilience, and inclusivity.
In addition, hosting COP29 provided a unique opportunity for Azerbaijan in order to demonstrate its leadership in terms of innovation of sustainable development and renewable energy. Guided by the slogan "In solidarity for a green world" the conference elevated the nation''s global standing while fostering local economic growth and technological advancement. Azerbaijan''s experience serves as a powerful example of how emerging economies can balance ambitious climate goals with localized solutions.
On a global scale, COP29 underscored the importance of equitable and inclusive climate policies, reaffirming the need for collective responsibility in addressing shared challenges. The conference''s outcomes provide a strong foundation for future climate action, setting the stage for continued progress at COP30 in Belem, Brazil, and beyond. By demonstrating that meaningful progress is possible through cooperation, innovation, and inclusivity, COP29 will be remembered as a milestone in the global journey toward a sustainable and equitable future.
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At the same time, the climate summit in Baku sent mixed signals on the future pace of the energy transition, affirming what investors already expect as an economic transformation that will unfold unevenly across markets.
Though private investments factor heavily into developed countries'' commitments to contribute at least USD 300 billion per year by 2035 to help developing countries shift to greener energy and adapt to a warming planet, barriers that impede the flow of private capital for climate action in emerging markets remain. Finding innovative solutions to unlock private capital at scale will be an ongoing challenge.
For their part, capital-market participants may be front-running the nascent efforts of governments'' adaptation discussions, as they increasingly focus on reducing the multiplying risks that a warming world presents and explore ways to allocate capital today to enhance resilience of their assets across regions.
Below are our takeaways from conversations on the ground in Baku with investors, policymakers, academics and leaders of civil society.
COP29 marked a significant milestone in the advancement of carbon trading, with progress that eluded the two previous U.N. climate summits. An endorsement of new standards for international trading of carbon reductions by countries and companies paves the way for a U.N.-backed market under Article 6.4 of the Paris Agreement, known as the Paris Agreement Crediting Mechanism (PACM). Countries also clarified rules for bilateral carbon trading under Article 6.2 of the agreement, which envisions such trading between countries as a tool to facilitate international cooperation on climate change.
While market infrastructure and specific methodologies remain to be developed, the green light from governments represents a recognition of the potential of carbon trading to lower the cost of decarbonization and allocate capital efficiently, provided projects have high integrity. Data and metrics that help investors, companies and project developers assess the integrity of projects and deliver climate impact will be increasingly important.
Agreement on Article 6.2 and implications for investors
The agreement reached at COP29 finalizes guidance for carbon trading between countries under Article 6.2, which authorizes governments to trade units known as internationally transferred mitigation outcomes (akin to carbon credits). These units count toward another country''s national climate plans, other international climate targets (such as those for international aviation) or can be used in the voluntary carbon market if authorized by the host country. Among other provisions, the agreement:
Countries will generally be unable to take back credits once transferred, reducing risks for project developers and investors. This clarification could benefit the carbon market in a number of ways, including by:
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