BREAKTHROUGH COP29

On November 23, the 29th session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP29) concluded in Baku, which became one of the world's top news headlines. This small southern capital gathered 76,000 participants from 196 countries, including more than 80 leaders of states and governments, to discuss one of the planet's most pressing issues—climate change. Most importantly, they reached significant decisions regarding many challenging goals. According to the final agreement, Baku successfully secured a commitment that by 2035, annual climate finance for developing countries will reach at least $300 billion, a figure that is three times the previous benchmark of $100 billion. This financial goal from Baku, demonstrating substantial growth, establishes a new global target of $1.3 trillion in climate finance directed toward developing countries by 2035.

Important Decisions

At the final plenary session of the conference, after extensive debate, Article 6 of the Paris Agreement was fully operationalised. This effectively concludes ten years of negotiations on highly integrated carbon markets. This issue was one of the main priorities for the Azerbaijani COP29 Presidency, which facilitated this important achievement through intensive bilateral technical and political negotiations. This strategy helped to break years of deadlock and finalize the last major component of the Paris Agreement. 

Article 6 establishes the framework for creating robust and transparent carbon markets for countries cooperating to meet climate goals. This cross-border collaboration is anticipated to reduce the cost of implementing national climate plans (NDCs) by up to $250 billion annually. The COP29 Presidency encourages the reinvestment of these funds into broader climate ambitions. The next generation of NDCs, which will be unveiled in February, is critical for the world’s aspirations to achieve the 1.5° C target. Article 6 addresses some of the most complex and technically challenging issues in climate diplomacy, including decommissioning coal plants, developing wind farms, and reforestation. This signifies a new wave of investment in the developing world. The unanimous decision on Article 6 will play a crucial role in ensuring environmental integrity, unlocking the vast potential to boost global climate investment by establishing transparent and sustainable carbon markets through real, measurable, and verifiable emission reductions and eliminations. 

The Plenary adopted a historic decision to ensure the full operationalisation of the Loss and Damage Fund, which has been eagerly anticipated by developing states, including small island nations, least developed countries, and those in Africa. This aligns with the priority set by President Ilham Aliyev of Azerbaijan to address the impacts of climate change on small island states during the COP29 Presidency. 

The establishment of a Loss and Damage Fund was agreed upon at COP27 in Egypt. Its purpose is to provide financial assistance to countries most vulnerable to climate change impacts. At COP28 in Dubai, it was decided to launch this fund. Notably, the COP29 Presidency has undertaken significant steps to operationalize the fund, collaborating closely with its board and the World Bank. In September 2024, during the third board meeting held in Baku, crucial steps were taken to initiate the fund's activities, including appointing an executive director. Under COP29, several agreements related to the Loss and Damage Fund were signed, including the "Trust Management Agreement" and "Secretariat Hosting Agreement" between the Fund board and the World Bank, as well as the "Host Country Agreement" between the Fund board and host country the Philippines. Currently, promised financial support for the Fund exceeds $730 million. Thanks to these accomplishments, the Loss and Damage Fund is poised to begin financing projects as early as 2025—another success attributed to Azerbaijan's Presidency of COP29. 

The plenary also resolved to provide financial and technical support to developing countries for capacity building and preparing biennial transparency reports in accordance with Article 13 of the Paris Agreement. The resolution includes implementing the Enhanced Transparency Framework established by Article 13, which entails financial and technical assistance for drafting biennial transparency reports by developing countries. 

Additionally, the document encompasses the Baku Global Platform for Climate Transparency, an initiative from the COP29 Presidency. The decision acknowledges actions undertaken by the COP29 Presidency in promoting climate transparency, including organizing various forums and capacity-building training on climate transparency and establishing this platform, which serves as a significant legacy of COP29 in this domain. 

Several other documents were also approved during plenary sessions, including "Gender and Climate Change," "Global Adaptation Target," and "Sharm El Sheikh's Mitigation Ambitions and Implementation Work Programme." 

As a result of COP29, the Baku Adaptation Roadmap for the Global Adaptation Goal document was produced. Furthermore, a Baku High-Level Dialogue on Adaptation will be convened as part of upcoming sessions of the SRAs (Specialized Regional Assessments). This will ensure that adaptation issues are discussed annually at all SRAs for the benefit of developing countries.

Key Outcome

The agreement on the Baku Financial Goal (BFG), which is a pledge to provide $1.3 trillion in climate finance annually to developing countries, stands out as a major achievement of COP29. The success in realizing this top priority for Azerbaijan’s COP29 Presidency correlates with a significant increase in funding beyond the previous $100 billion target, paving the way for a new influx of global investment.  

The primary objective of the Baku Financial Goal is to lead efforts in mobilizing at least $300 billion annually for developing countries by 2035. This outcome results from 48 hours of intensive diplomacy by the COP29 Presidency. Particular emphasis is placed on supporting least developed countries and small island developing states while ensuring provisions for accessibility and transparency. 

COP29 also concluded a decade-long wait for finalizing negotiations on Article 6 of the Paris Agreement aimed at establishing secure carbon markets under UN auspices. Financial flows from compliant carbon markets could reach $1 trillion per year by 2050. This volume could also reduce national climate plan costs by $250 billion annually. Overall, both the Baku Financial Target and Article 6 will permanently alter global climate finance architecture by redirecting investments towards developing countries. 

The Baku Financial Goal serves as a centrepiece within a package of agreements promoting progress across all areas of climate action. By avoiding any delays in achieving primary outcomes from the Global View, COP29 has successfully launched the Loss and Damage Fund and prepared it for financial disbursement by 2025. 

These breakthroughs are attributed to months of intensive diplomatic efforts by Azerbaijan’s Chairmanship aimed at addressing some of the most complex challenges in multilateral climate action. They represent a critical step toward consolidating resources necessary for reaching the 1.5°C target.

COP29's the Best Possible Deal

Mukhtar Babayev, President of COP29 and Minister of Environment and Natural Resources of Azerbaijan, stated after the conference that the Baku Financial Goal was the best possible outcome achieved by all parties: "In a year marked by geopolitical disunity, many doubted Azerbaijan's ability to deliver results. They underestimated our capacity to reach an agreement. They were mistaken on both counts." He acknowledged that upcoming years would not be easy: "Science indicates that challenges will only increase. Our collective ability to collaborate will be tested. The Baku breakthrough will assist us in navigating forthcoming storms." 

Azerbaijani President Ilham Aliyev views this "Baku breakthrough" as a triumph of multilateralism, asserting that COP29 represents a pivotal moment in climate diplomacy: "I believe this legacy will positively influence future global climate action." 

"Azerbaijan has taken every necessary measure to ensure smooth and effective proceedings at COP29. Without exaggeration, the Baku Climate Summit will be remembered as one of history's most significant COP conferences. We take particular pride in receiving widespread appreciation from guests regarding our exemplary organization of COP29, which attracted participation from 80 Heads of State and Government alongside over 76,000 registered attendees.

"Despite facing a well-organized campaign of blackmail and slander, Azerbaijan succeeded in achieving historic results during these climate negotiations. Guided by our slogan 'Solidarity for a Green World,' Azerbaijan acted as an honest broker and seized every opportunity to facilitate impartial negotiations. Throughout this process, we advocated for outcomes that consider the needs of developing countries—particularly small island developing nations and least developed states—who bear the brunt of climate change impacts and confront existential threats," Ilham Aliyev remarked following COP29.

According to UN Secretary-General António Guterres, the agreement reached at COP29 lays essential groundwork for future actions against climate change: "The agreement at COP29 is crucial for maintaining our objective of keeping global warming within 1.5°C limits. Countries have risen to meet this challenge; while I had hoped for a more ambitious result in financing and mitigation efforts, this agreement provides a solid foundation for future initiatives," he stated.

Simon Steele, Executive Secretary of the UN Framework Convention on Climate Change, emphasized that while important decisions were made at COP29, much work remains ahead: "We have reached an agreement to triple our climate finance target—this is vital for supporting those most vulnerable to climate change's effects." Steele welcomed advancements made at COP29 regarding a global carbon market after nearly ten years of hard work: "This new financial target serves as an 'insurance policy' for humanity against escalating climate impacts affecting all nations; however, like any insurance policy, it only functions if premiums are paid fully and promptly. Promises must be kept to safeguard billions of lives," he added.

Undoubtedly, decisions made at COP29 hold critical significance for humanity's future while reaffirming Azerbaijan's leadership role and international standing. Baku successfully managed to orchestrate this large-scale event while uniting efforts toward conference success and demonstrating exceptional organizational skills. Consequently, a resolution was passed at summit's end expressing gratitude toward Azerbaijan for its high level of organization at COP29.