A New Climate Finance Goal: A Step Forward, but Not Enough
One of the most anticipated outcomes of COP29 was the agreement on a new global climate finance target. Developed nations committed to mobilizing at least $300 billion annually by 2035 for developing countries to curb emissions and adapt to climate change. This new target is three times the previous goal, initially set at $100 billion annually through 2025. However, despite its bold numbers, the new goal fell short of the financing needs identified by developing countries, who continue to face the harshest impacts of climate change, from rising sea levels to extreme weather events.
The finance deal marked a significant shift by including the "voluntary intention" to count finance flowing through multilateral development banks (MDBs) toward meeting the goal, which will allow countries to tap into wider funding pools. Yet, the $300 billion target is seen by many as insufficient, with some analysts estimating that developing nations require far more — potentially over $1.3 trillion — to meet their adaptation needs and low-carbon development goals. Notably, the agreement deferred addressing critical issues related to the quality and accessibility of the funds, leaving some nations frustrated by the lack of concrete plans. The road to COP30, to be held in Belém, Brazil, will likely require a focus on not only raising but also improving the accessibility and equity of climate finance. Progress in this area will be pivotal for ensuring that developing countries receive the support needed to build climate resilience and reduce emissions in the coming decade.
The Global Stocktake: A Roadblock on Fossil Fuel Transition
Another significant agenda item at COP29 was the follow-up to the first-ever Global Stocktake (GST), which, at COP28, assessed progress toward the Paris Agreement’s goals. The GST had called for a transition away from fossil fuels, as well as stronger commitments on renewable energy, transport, and deforestation. However, COP29 struggled to agree on how to carry this momentum forward, especially in regard to the fossil fuel phase-out. Disagreements between nations about whether to focus solely on scaling up finance or addressing fossil fuel reduction led to a disappointing stalemate, with key decisions deferred until COP30. This delay leaves open critical questions about the next round of Nationally Determined Contributions (NDCs), which will set countries' climate goals for 2035 and 2030. The outcome signals a need for urgent action in the coming months, as national climate plans must align with the Paris Agreement’s overarching goal of limiting global temperature rise to 1.5°C.
National Commitments: Some Progress, but More Ambition Needed
A highlight of COP29 was the unveiling of several new NDCs, with countries such as the UAE, the UK, and Brazil making significant pledges to reduce emissions by 2035. The UAE committed to cutting emissions by 47%, while the UK promised an 81% reduction from 1990 levels. Brazil’s target of a 67% emissions reduction by 2035 was also seen as a step forward, though its long-term viability hinges on stronger fossil fuel phase-out policies. However, despite these pledges, the overall ambition of NDCs remains uneven. As the world’s major emitters approach the deadline for submitting their updated targets, there are growing calls for more robust, near-term actions. The next year is critical for ensuring that countries not only set ambitious goals but also integrate these into comprehensive sectoral strategies for emissions reductions.
Carbon Markets and Climate Cooperation: Progress and Potential
COP29 also saw significant steps forward on carbon markets, with negotiators agreeing on guidelines for carbon trading under Article 6 of the Paris Agreement. These developments could help countries meet their emissions reduction targets by enabling the trade of carbon credits between nations. However, some technical issues remain unresolved, particularly regarding emissions avoidance and the credibility of traded credits. While these advancements offer hope for harnessing market mechanisms, scrutiny will be essential to ensure that carbon credits are credible and lead to meaningful emissions reductions. Alongside these technical discussions, COP29 continued the growing trend of "cooperative initiatives," where countries, cities, and private entities work together outside formal negotiations. Notable pledges, such as the reduction of methane emissions from organic waste and an agreement to increase global energy storage capacity sixfold, offer a promising avenue for accelerating climate action. However, the challenge will be ensuring that these initiatives result in tangible, measurable outcomes rather than political gestures.
Adaptation and Loss and Damage: Unfinished Business
Adaptation efforts also received attention at COP29, but progress was slow. The Paris Agreement’s Global Goal on Adaptation (GGA), aimed at enhancing resilience to climate impacts, is still in the early stages of implementation. The discussions on key indicators and how to track progress were stymied by disagreements over how to measure finance and capacity-building for adaptation. Similarly, while the Loss and Damage Fund saw new pledges from several countries, including Australia and Sweden, the total amount remains insufficient compared to the anticipated $580 billion in annual losses by 2030. Much work remains to ensure that the fund is adequately financed and that the most vulnerable countries can access it.
The Road Ahead: Eyes on COP30
As countries look toward COP30 in 2025, the path forward remains fraught with challenges. The financial commitments made at COP29, while a step in the right direction, are not enough to tackle the scale of the climate crisis. The coming year will test whether nations can bridge the gap between ambition and action, particularly in terms of carbon markets, adaptation, and loss and damage.
For COP30 to be a success, major emitters must lead the way in drastically reducing emissions, while ensuring that financial flows are scaled up and equitably distributed. The true test of global climate governance will be whether the commitments made in Baku can be translated into real, measurable change in the years ahead.