“Is COP29 dead after the Trump win?” asked some members of the media a few days before the 29th Conference of the Parties to the UN climate summit (COP29) started on the shores of the Caspian Sea in Baku, Azerbaijan on November 11. News of former reality TV show host Donald Trump sweeping the polls to win a second, non-consecutive term as President of the US, seemed to be added as one more factor that prejudged this summit to be a particularly inconsequential one. Other reasons cited for this imminent failure were the large shoes that the UAE Presidency had left to fill with their public relation-bonanza of 2023, Azerbaijan’s lack of climate credibility as a fossil fuel producer and the general turmoil of world geopolitics. But climate experts and observers commented that this was the most important COP since the signing of Paris Agreement in 2015. Labelled “finance COP”, its top agenda required developed countries to open their wallets and pay for their historical greenhouse gas (GHG) emissions by helping to fund climate transition in the developing world.
In 2015, within the paragraphs of the Paris Agreement, it was decided that a New Collective Quantified Goal (NCQG) on climate finance would be decided before 2025, as a successor to the $100 billion target agreed upon in 2009. Between 2022 and 2024, no fewer than 11 Technical Expert Dialogues, two High Level Ministerials and three negotiations under an ad hoc work programme were held to deliberate on what can go into NCQG. Hundreds of hours of analysis and discussion, preparation and estimations of needs and sources of finance built up to the summit in Baku.
Many major world leaders preoccupied with the G20 Summit, domestic elections and collapse of their governments, did not come to Baku. This did not undermine the criticality of this moment for the formerly colonised countries of the Global South who are the worst victims of climate change. Despite this, developed countries showed up with no credible offers, and did not negotiate in good faith. There was some movement on the controversial Article 6 of the Paris Agreement, which enables voluntary cooperation between countries to help them meet their climate targets through a carbon market mechanism. Parties adopted rules under Article 6 after nearly a decade of talks—however, some of them are severely flawed.
At the end of the summit, which was extended by two days till November 24, the Azerbaijan Presidency gavelled down substantial outcomes on both NCQG and Article 6, ramming through sub-optimal agreements that still faced disagreements from developing countries and civil society. The Presidency’s role must come under scrutiny for this. For the sake of preserving multilateralism, it may have inherently disbanded democracy and, in fact, multilateralism.
The COP29 president gave us the [draft] text and left no space for discussion or addressing grievances. The gavel came down far too quickly. This agreement passed because developed countries wanted it,” Juan Carlos Monterrey Gomez told Down To Earth. Gomez is the Special Representative for Climate Change from Panama in Latin America, a region where climate-related disasters have increased 2.4 times since 1970, according to the World Bank’s Climate Change Knowledge Portal. In fact, the hopes of all developing nations dimmed as the COP29 Presidency adopted NCQG, allotting a meagre annual contribution of $300 billion by 2035. The deal also “calls on all actors” to contribute to an overall climate finance target of $1.3 trillion annually by 2035, including voluntary contributions from developing nations. This fund will replace the $100 billion per year commitment made by developed nations in 2009 to support climate action in developing countries by 2020, later extended to 2025. However, the $100 billion target has only been met once, in 2022, according to the intergovernmental body, Organisation for Economic Co-operation and Development (OECD).
During the COP29 plenary, India called the adopted text an “optical illusion”, while Bolivia, Nigeria and Pakistan criticised the agreement’s lack of ambition. The $300 billion figure falls far below developing countries’ immediate climate needs. As per UNFCCC’s second “Needs Determination Report”, $455-584 billion per year is required until 2030 for developing countries to achieve nationally determined contributions (NDCs). The deal blatantly overlooks the obligation of developed countries to provide climate finance under Article 9.1 of Paris Agreement. Countries began cOP29 with the task of reaching consensus on quantum (the amount), contributor base (who pays for the goal) and sources of financing (public and private) for NCQG. Developed nations avoided discussions on the quantum, while developing countries pushed for clear commitments. The contributor base was another contentious issue, with the EU insisting to expand it to include all countries that have seen economic growth, a position strongly opposed by the developing bloc.
While far from sufficient, securing the $300 billion commitment from developed countries was an uphill battle. The negotiations began on November 11 with G77 and China—the largest bloc of developing countries—rejecting the initial NCQG draft, while demanding $1.3 trillion annually from developed nations. Two days later, a longer version of the text was shared, which G77 and China accepted for discussions. Deliberations then shifted to an informal mode, closed to observers. Meanwhile, speculation grew that the Global North would propose $200-300 billion annually, as Western media outlets such as Politico and news aggregator UN Climate Summit News wrote, with the latter conjecturing somewhat questionably that developing countries might approve a figure like $300 billion. These misdirections were clarified on November 20 when the chairs of G77 and China, African Group of Negotiators (AGN) and Like-Minded Developing Countries (LMDC) bloc were asked by the media how they would respond to $200-300 billion as an offer. Diego Pacheco of LMDC responded, “Is it a joke?” Ali Mohamed of AGN agreed, saying, “We don’t know where you are getting that $200 billion figure. The quantum that we are putting forward is nowhere near the figure being quoted here.” On November 21, over 80 countries, including the African Group, LDCs and Small Island Developing States (SIDS), proposed a roadmap to mobilise finance towards the $1.3 trillion target. They suggested mechanisms such as redirecting fossil fuel subsidies—estimated at $1.1 trillion annually in 2021-22—to finance climate action.
On the last day of the scheduled negotiations, developed countries announced they wish to contribute $250 billion to NCQG. Drawing sharp criticism from the Global South, the negotiations were extended for another day. On November 23, the G77 lowered its public finance ask to $500 billion out of the $1.3 trillion goal. AGN asked for non-debt and concessional instruments to be included. Some developing countries, particularly in Latin America, attempted to play a “bridging role” between the North and the South, which may have been detrimental to the G77’s demand, or facilitate an easing of the deadlock, depending on who you ask.
On November 23, well past the official closure date, rumours emerged that the US was unwilling to acknowledge its obligation to provide climate finance via public money under Article 9.1 of the Paris Agreement. They were keen to shirk their responsibility by focusing on Article 9.3 alone—the mobilisation goal that allows finance to be brought in from the private finance and other sources. This aspect has been proven to be unreliable as the private sector chases profits, and is unwilling to invest long-term in developing countries where perceived “financial risks” are high. There was also a concern about the impact of Trump’s election.
A few hours before the closing plenary on November 23, Parties were called for an informal consultation by the presidency on the new text which had raised the quantum to $300 billion annually by 2035. LDCs and SIDS staged a walkout because the text ignored their call for including grant-equivalent financing for adaptation and loss and damage. They crit-icised the text’s lack of ambition, inadequate finance quality, and absence of minimum allocation floors for vulnerable nations.
At the closing plenary on November 24, the COP29 Presidency gavelled a climate finance deal of $300 billion per year to developing countries from developed Parties and other sources by 2035. The text lacked language on NCQG being additional to existing aid commitments of the Global North. The $300 billion quantum is also not specified as grants-based or concessional, leaving scope for debt-worsening modes of financing in the Global South. The text also fails to clarify the separation between provision (assured contribution by governments) and mobilisation. Loss and damage is not included in the goal either. The complete operationalisation of the Fund for Responding to Loss and Damage was also achieved at Baku, but total pledges remain abysmally low at about $720 million, and the chance to supplement the fund through NCQG has been lost now as well. The adopted text decides to launch the Baku to Belém Roadmap to 1.3T Road to identify mechanisms by COP30 at Belém, Brazil, to increase the quantum from $300 billion to $1.3 trillion. The roadmap lacks substance, with no structure and accountability.
Ultimately, developed countries have diluted their responsibilities. What is telling is that, according to UK-based think tank Overseas Development Institute and others, developed countries would have reached $200 billion of climate finance by 2030 in business as usual scenarios as well. The $300 billion figure is slightly higher than the previous goal of $100 billion, adjusted for inflation. NCQG does not represent increased fiscal effort by countries obligated to provide climate finance in line with their historical responsibility and contributions to the climate crisis.
After nearly 10 years of negotiations, Parties at COP29 unanimously adopted rules for Article 6 of the Paris Agreement that allows voluntary cooperation among countries to implement nationally determined contributions (NDCs) through a carbon market mechanism. COP29’s lead negotiator Yalchin Rafiyev explained that this would pave the way to decommission coal plants, build wind farms and plant forests. Parties adopted rules for three paragraphs under Article 6, however, some of them have severe flaws.
Article 6.2: This involves decentralised systems where two or more countries trade carbon credits or Internationally Transferred Mitigation Outcomes (ITMOs). One credit represents 1 tonne of carbon dioxide equivalent reduced or removed through projects. Article 6.2 is already operational, with 91 bilateral agreements signed among 56 countries, according to UNEP Copenhagen Climate Centre. At COP29, countries were to resolve issues on authorisation (the host country where emission reduction occurs authorises transfer of ITMOs to another nation), transparency and reporting requirements (countries report on projects and ITMO trade to UNFCCC), handling inconsistencies (errors, underreporting and misreporting in submissions to UNFCCC) and registry functionality (registries record emission reduction activities and ITMO trade). The first week of talks did not see consensus and for most of the second week, talks were behind closed doors.
According to the final adopted draft, countries are allowed to make changes to the authorisation such as adjusting terms for issuance and withdrawal of ITMOs. On the reporting front, the text says a centralised platform would be used to record authorisation. But the final draft only “requests” countries to provide information on aspects such as avoiding double counting (emission reductions being counted in two parties’ inventories). Similarly, for handling inconsistencies, the final text “requests” countries to not count ITMOs as part of NDCs if the UN expert review team flags issues, though the first draft said they “shall” do so. Erika Lennon, senior attorney at the Center for International Environmental Law, a US non-profit, tells Down to Earth (DTE) that stronger language would have curbed use of ITMOs if a project violates human and indigenous peoples’ rights or overestimates emissions. Credits arising from such projects are perceived as low quality.
During negotiations on registries, the US opposed an international registry that records transactions, while developing countries cited a lack of capacity to build a national registry. A middle ground was reached and the Secretariat was asked to provide an additional registry service for countries that request it. Overall, Article 6.2 as adopted is a weak framework that does not prevent parties from engaging in trade of low-quality carbon credits.
Article 6.4: The adoption of rules on Article 6.4, which will set up a global carbon market overseen by a UN Supervisory Body (SB), had a dramatic start. At COP28 in 2023, the “Conference of the Parties serving as the meeting of the Parties to the Paris Agreement” (CMA), the supreme body of UNFCCC, rejected SB’s recommendations on rules for methodologies (to calculate emissions reductions) and carbon removals (how carbon dioxide removal activities are taken up). This October, prior to COP29, SB adopted the rules as standards without submitting them to negotiators and CMA for approval. At the COP29 opening plenary, Babaye endorsed the standards and said CMA would provide guidance to improve them.
During negotiations, the US proposed that SB avoid “frequent substantive revisions” to the standards, which saw pushback from developing countries. The final text requested SB to avoid frequent revisions while ensuring improvements. Another issue flagged was the transition of afforestation and reforestation projects from the Clean Development Mechanism (CDM) under the Kyoto Protocol, which allows trading of credits from developing to industrialised countries, to Article 6.4. The adopted text enables CDM projects in developing nations to earn certified emission reduction credits without passing additionality tests (checks that ensure emission reductions or removals would not have occurred in absence of the incentive created by carbon credit revenues). This is despite evidence suggesting CDM issued low-quality credits, as per non-profit Carbon Market Watch.
Article 6.8: This component provides a centralised platform where countries in need of financial support can submit planned mitigation projects, which can be taken up by richer nations. The web-based platform is operationalised, but no projects have been recorded so far. The adopted draft decision at COP29 calls on Parties for views on barriers to using the platform with potential solutions, and on the ways non-market approaches can support NDC implementation.
Negotiations at COP29 do not consider voluntary carbon market (VCM), as it is not included in the Paris Agreement. But VCM is likely to take cues from the Article 6 standards and decisions, including those that have flaws.
Mitigating the effects of climate change and adapting to the changing climate requires finance. COP29 did not offer much on the two fronts.
These funds can be sourced domestically, internationally, from multilateral agencies or private individuals. A critical tool to fund mitigation and adaptation is NCQG on climate finance, which, at COP29, received an allocation of just $300 billion for developing nations annually by 2035. The low NCQG sum could adversely affect the ambition shown by countries in preparing their third cycle of NDCs (targets for 2035) due in 2025. This is because the second “Needs Determination Report” by UNFCCC, states that developing countries need a cumulative $5.012-6.852 trillion of finance until 2030 to achieve their stated NDCs.
Only three countries announced the third cycle of NDC at COP29—the UAE, Brazil and the UK. The UAE and Brazil have committed to reduce their GHGs by 47 per cent by 2035, compared to 2019 levels and by 59-67 per cent by 2035, compared to 2005 levels. The UK shared just the headline target of reducing its economy-wide GHGs by at least 81 per cent by 2035 compared to 1990 levels. An analysis of the target by the Climate Action Tracker, an independent assessment which tracks the emission commitments and actions of countries, says that while UAE’s new 2035 NDC is compatible to keep temperatures within the 1.5˚C range, the country has not updated its NDC target for 2030, which is not aligned to the 1.˚5C pathway. Brazil’s targets show a lack of transparency as they lack details on the role of Land Use, Land-Use Change and Forestry (LULUCF) in defining its 2035 NDC target. While the UK’s headline number is ambitious, it does not represent the country’s fair share, Neil Grant, Senior Climate and Energy Analyst at Climate Analytics, tells DTE.
At COP28 in Dubai last year, countries had also agreed to establish UAE dialogue on implementing Global Stocktake (GST), which assesses the world’s progress towards the goals of the Paris Agreement on climate change, addresses gaps and informs enhanced delivery of climate action. GST is done every five years since 2018. However, no progress was made on the UAE dialogue at COP29 after several blocs and countries objected to the adoption of the text at the closing plenary, expressing disappointment that the text was backtracking from the commitment made in Dubai to enhance mitigation.
With blocs such as the African Group hoping for a separate sub goal on adaptation under NCQG, countries at COP29 ap-peared to be waiting for negotiations on the finance goal to conclude before advancing on adaptation discussions. However, the final NCQG text did not include such a sub goal. Instead, developing countries are now expected to use an undetermined fraction of the $300 billion per year offered under NCQG for adaptation. This meagre amount would be marked for developing countries’ National Adaptation Plans (NAPs) and Adaptation Communications to UNFCCC, and on implementing the Global Goal on Adaptation (GGA). GGA is a collective target for countries to assess progress on measures taken to adapt to the impacts of climate change. It was established under the Paris Agreement and adopted as the UAE Framework for Global Climate Resilience (FGCR) at COP28 in Dubai.
New contributions to the Adaptation Fund, established in 2001 under the Kyoto Protocol to finance projects and programmes that help vulnerable communities in developing countries adapt to climate change, also fell short at COP29. Countries pledged a total of $61 million to the fund, as against the annual goal of $300 million.
Adaptation negotiations overall saw slow progress. In terms of UAE-FGCR, work is underway to establish indicators to measure progress—5,000 indicators are currently proposed, to be brought down to 100 through meetings of the UAE-Belem Work Programme, scheduled to be concluded at COP30 in Belem, Brazil. A technical report on the Work Pro-gramme’s progress is due a month before the next Subsidiary Bodies conference in Bonn, Germany in June 2025. Nego-tiations on NAPs (which all countries must prepare by 2030, as agreed in COP28) were also pushed to June 2025, with a lack of consensus between developed and developing nation blocs on subjects such as implementation and inclusion of adaptation finance in the plans.
COP29 saw the Global North abandon its obligations to enable the climate transition in the developing world for the remaining part of this decade when urgent climate action is crucial. Up next is the update to the NDC cycle, which will see calls to raise ambition from “all” countries—climate polluters and victims—in an audacious act of hypocrisy from the Global North.
COP30 host Brazil—itself a growing power and diplomatic behemoth—played a part in rushing through the finance outcome in Baku, not wanting to deal with the mess of this negotiation in Belem next year. Brazil’s Presidency offers both promise and reason for caution. An emerging Global South leader in an increasingly multipolar world that has been vocal about sticky issues like the unsavoury hegemony of the dollar in global trade, and the need to tax the ultrawealthy, Brazil has the opportunity to tilt the scales and reclaim the ground that G77 gave up in bargaining power this year.
Brazil has raised the issue of operationalising equity in the phaseout of fossil fuels—an aspect missing in the GST outcome of 2023. On the other hand, its aspirations to expand oil and gas production domestically and the spotlight that questionable carbon market deals may get at COP30 without sufficient scrutiny, should keep observers and governments on their toes. Many argue it is too late to save the climate, but those who have been fighting the fight know it is only too late if we give up.
This was first published in the 1-15 December, 2024 print edition of Down To Earth