COP29: A conference of progress and contention

December 2, 2024 | Gemma by

Gemma

Now the dust has settled on the annual Conference of the Parties (COP29) in Baku, Azerbaijan, we’ve been reflecting on what this means for both people and the environment, particularly in the areas of climate finance, carbon markets, and the urgent need to phase out fossil fuels.

Why COP29 is relevant for businesses

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Increasingly businesses are being asked to reduce their carbon emissions, invest in sustainable technologies to support government climate goals and operate in a way that supports the United Nations SDGs (Sustainable Development Goals).

By understanding and engaging with COP29, organisations and businesses can be a catalyst for positive change and remain competitive in a saturated marketplace – contributing to a sustainable future.

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Controversy and criticism

As with all COP summits, this year’s event carried high expectations for advancing international climate policy. Representatives from almost every country, alongside civil society and business leaders, convened to discuss reducing greenhouse gas emissions and addressing climate impacts.

The decision to hold the summit in Azerbaijan – a country that is heavily reliant on fossil fuel exports (Financial Times), with plans to expand gas production by up to a third in the next decade (BBC) – marked the third consecutive year a petroleum state has hosted the event, following Egypt in 2022 and the UAE in 2023.

Critics argued that this undermined the conference’s credibility, fuelling scepticism about the summit’s sincerity in tackling the climate crisis (source: BBC).

Controversy around this year’s summit deepened when reports emerged that COP29’s chief executive had expressed openness to discussing future oil and gas deals during the event (source: BBC).

While COP29 was billed as the ‘Finance COP,’ it struggled to reconcile ambitious goals with entrenched geopolitical and economic divides. Developing nations, often on the frontlines of climate change, demanded greater financial support to transition to clean energy and address climate impacts, putting pressure on wealthier nations to deliver.

Key outcomes

Despite the controversy, COP29 achieved several key milestones aimed at advancing global climate action, including:

  • Climate Finance: One of the most significant outcomes was the establishment of the New Collective Quantified Goal (NCQG) on climate finance. The NCQG aims to mobilise resources from both public and private sectors to increase annual funding for developing countries from US$100 billion to US$300 billion by 2035, with an aspirational target of reaching US$1.3 trillion annually by the same year. However, many developing nations have criticised the figure as inadequate, arguing that meeting their climate adaption and mitigation needs would require at least US$1 trillion annually in immediate support (Sources: Egyptian Streets and The Atlantic)
  • Carbon markets: Progress was made on carbon markets under Article 6 of the Paris Agreement, with rules finalised to facilitate global carbon trading. This marked a historic milestone, as the remaining sections of Article 6 were agreed upon, completing all elements of the Paris Agreement nearly a decade after it was signed. Mechanisms to ensure transparency and prevent double-counting of credits were also introduced, addressing a key barrier to market integrity and investor confidence, which could unlock significant financial flows to developing countries and provide a much-needed boost to global climate finance.
  • Nationally Determined Contributions (NDCs): Countries committed to submit enhanced NDCs (which are climate action plans decided under the Paris Agreement) by early 2025, notably nations such as the UK and Brazil, signalled intentions to increase their climate ambitions in forthcoming updates. However, the extent of these enhancements and their impact remains uncertain.

Persistent challenges

COP29, however, left several critical challenges unaddressed:

Contentious negotiations

Tensions ran high throughout COP29, with moments of near collapse in the negotiations (Source: Independent). Developing nations staged a walkout in protest of what they perceived as insufficient financial commitments, underscoring the deep fractures between developed and developing countries. Many global-south nations expressed frustration over the lack of concrete action to address their immediate needs, particularly regarding climate finance and loss-and-damage mechanisms.

External political developments further exacerbated these divisions. The re-election of Donald Trump during the conference ‘cast a long shadow over the talks’, as his renewed promise to ‘withdraw the United States’ – the world’s second largest greenhouse gas emitter – from the Paris Agreement reignited concerns over the stability of international climate commitments. (Source: Independent)

Despite the fraught atmosphere, negotiators reached agreements on procedural matters like carbon markets, but the lack of ambition in phasing out fossil fuels and the reliance on compromise left many stakeholders disillusioned.

Moving forward

While some headlines labelled COP29 a “COP-out” its progress in areas like climate finance and carbon markets offers a foundation for future action. However, the conference also highlighted the urgent need for bolder action and stronger cooperation, particularly in bridging the divide between developed and developing nations.

As attention shifts to COP30, which is to be held in Belém, Brazil, nations must focus on rebuilding trust and ensuring that commitments translate into tangible progress. Only through greater ambition and unity can the global community hope to achieve the goals of the Paris Agreement.

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