COP29, set to take place from November 11-22, 2024 in Baku, Azerbaijan, is shaping up to be a critical moment in the global fight against climate change. This year’s meeting has been billed as “The Finance COP”. While the official agenda is still to be confirmed, certain themes are expected to dominate the discussions based on previous conferences and ongoing global priorities. As world leaders, climate experts, and activists converge, the conference promises to push forward efforts to meet the Paris Agreement goals.
ClearBlue will be in Baku to gather critical information and learn first-hand about developments on key issues expected to be discussed at the conference:
Carbon Markets and Article 6 of the Paris Agreement
Article 6, which governs international carbon markets, is another formal agenda item that will likely receive considerable attention. While the rules around carbon trading were partially agreed upon at COP26, there are still significant gaps to fill.
The Article 6 negotiations at COP28 broke down – primarily due to disagreements over issues such as authorization, guidance on emissions removals and emissions avoidance, and UN oversight. A key issue was whether authorizations can be amended or revoked after transfers, in addition to what authorization statements should contain. Significant debate occurred around emissions removals, with concerns that the risk of reversal was not adequately addressed. Additionally, there was no agreed definition for “emissions avoidance”, and further work is needed to determine its eligibility. These unresolved issues created a stalemate, preventing any consensus from being reached.
Progress was made in October 2024 when the Article 6.4 Supervisory Body (SBM), tasked with developing and supervising the Paris Agreement Crediting Mechanism (PACM) moved forward by adopting two standards, the Standard of Methodology Requirements and the Standard on Activities Involving Removals. The standards adoption was seen as a major step forward in operationalizing the mechanism, establishing the pathway for project developers to create and submit methodologies, with the ultimate objective of being registered under the PACM.
At COP29, key points to watch include whether the 6.4 Supervisory Body (SBM) decision remains valid, potentially paving the way for Article 6.4 operationalization by Q1 2025, progress on the reporting framework for Article 6.2, and any expansions in bilateral cooperation. With growing concerns about the integrity of carbon credits and greenwashing, COP29 is expected to finalize key details to ensure that carbon markets can operate effectively and fairly.
Setting a New Goal on Climate Finance
Securing adequate climate finance has been a recurring challenge at recent COPs, and COP29 will likely be no different. Outcomes of the first global stocktake estimate that USD 5.8-5.9 trillion is required by developing countries to implement their Nationally Determined Contributions (NDCs) for the pre-2030 period. Originally established in 2009, the 2015 Paris Agreement extended the goal of mobilizing USD 100 billion annually to support climate action in developing countries out to 2025. The New Collective Quantified Goal (NCQG) seeks to fill the persistent climate finance gaps and set a new financial target post-2025, from a floor of USD 100 billion per year. The NCQG aims to foster partnerships and trust, as developing nations will call for this commitment to be fulfilled while developed countries will push for greater private-sector involvement to scale up financing.
Adopting the NCQG will be a key priority at COP29, as many of the elements are being contested.
Loss and Damage Fund
COP27 established new funding arrangements for assisting developing countries in responding to loss and damage associated with the adverse effects of climate change. At COP28, States decided to operationalize the Fund for Responding to Loss and Damage (FRLD), a mechanism aimed at providing resources for countries that face economic and non-economic losses from climate-related disasters, including both extreme weather events and slow onset events. As of September 2024, a total of USD 702 million has been pledged to the Fund from 23 contributors. Other significant announcements in 2024 include the appointment of Ibrahima Cheikh Diong as the inaugural Executive Director of the Fund, as well as approving the World Bank to act as interim trustee and host of the Fund’s Secretariat.
At COP29, the focus will be on growing the fund and seeking further pledges, we anticipate robust discussions on how it can be made more effective and transparent and laying the groundwork for the distribution of the funds in the near future.
Nature-Based Solutions (NBS) and Biodiversity Protection
Currently underway, a record number of people are set to attend the 2024 United Nations Biodiversity Conference (COP16) in Cali, Colombia. COP16 highlights the urgent need for effective biodiversity strategies that align with climate action, emphasizing that healthy ecosystems are crucial for resilience against climate impacts. The goal is to transform commitments under the adopted 2022 Kumming-Montreal Global Biodiversity Framework (GBF), into actionable items by updating national biodiversity strategies and action plans. Nature-based solutions (NBS) are increasingly recognized as essential tools for climate mitigation and adaptation.
Download ClearBlue’s whitepaper, Close to Nature Forestry in the Orinoco Savannas of Colombia as presented at COP16
With COP29 commencing 10 days after the conclusion of COP16, it is expected to build on recent momentum and feature prominent discussions around NBS, such as reforestation and wetland restoration.
Global Stocktake and Upcoming NDCs
The first Global Stocktake concluded in 2023 at COP28, with the decision being adopted. The stocktake is an assessment of the progress made in meeting the goals of the 2015 Paris Agreement and is to be conducted every five years. It is intended to outline key actions and commitments and inform the next round of NDCs. The 2023 stocktake recommended the scaling up of renewables and the reduction in reliance on fossil fuels, the preservation of forests, and the reduction of emissions across industry and transportation.
The next round of NDCs is due in early 2025, we anticipate COP29 to be a key driver in building momentum for stronger national climate commitments.
Adaptation and Resilience
As the climate crisis intensifies and some effects have become inevitable, robust climate adaptation strategies are becoming essential. Adaptation refers to changes in processes, practices and structures that moderate or avoid damages associated with climate change. The Paris Agreement established the Global Goal on Adaptation to strengthen resilience and reduce vulnerability to climate change, with the view to contribute to sustainable development simultaneously. Least developed countries (LDCs) have developed National Adaptation Plans to identify medium- and long-term adaptation needs.
As adaptation is often overshadowed by mitigation, COP29 will serve as a forum for developing countries to push for more adaptation finance to build resilience in vulnerable communities. The private sector’s role in adaptation is also likely to be a point of focus, as more businesses recognize the need to adapt to climate risks.
Technological Innovation and Energy Transition
Technological innovation, particularly in renewable energy, carbon capture, and hydrogen, will be a central focus at COP29, as nations look for scalable solutions to meet their emissions targets. While technology transfer mechanisms may not be a formal item on the agenda, they are expected to be discussed extensively, especially as developing nations call for support in accessing clean energy technologies.
Equity and Climate Justice
Equity and climate justice are expected to be woven throughout COP29 discussions, even if not explicitly listed on the agenda. Central to the Paris Agreement is the principle of “Common but Differentiated Responsibilities”, which means that while there’s a duty on all countries to take climate action, the types of action depend on their differing national circumstances, which will be a key point of contention at COP29 as developing countries call for fair treatment in the global climate response. Balancing the needs of vulnerable nations with the realities developed countries face will continue to be a major theme in the negotiations.
While the official agenda for COP29 is still being finalized, these themes are almost certain to play a major role based on historical trends and current global priorities. Climate finance, loss and damage, the Global Stocktake and NDCs, and carbon markets are expected to be high on the list, reflecting ongoing efforts to push the global climate agenda forward. The outcomes of this conference will shape the trajectory of international climate action as the world works toward achieving the Paris Agreement goals.
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