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The Finance COP: Key Takeaways from COP29 for the Finance Industry

Written by Jalaj Jain | Dec 5, 2024 3:15:16 PM

The 29th United Nations Climate Change Conference (COP29) concluded last week in Baku, Azerbaijan, where the summit brought together world leaders, scientists, activists, and stakeholders to address the need for action to address climate change. 

Let’s explore the highlights of COP29 and key announcements and initiatives.


About COP29

The Conference of the Parties (COP) 29 is a part of the UNFCCC (United Nations Framework Convention on Climate Change) summit series held yearly, with the Presidency rotating among the five designated UN regions. This year, Baku, Azerbaijan was chosen to host the 29th Conference of the Parties (COP29).

The aim of COP29 was for states to agree, develop and share plans for addressing climate change globally. Each COP has a theme, building on previous summits. This year’s COP has been called “the finance COP” due to its focus on scaling up climate finance to assist lower-income countries transition to zero-carbon economies and help developing countries adapt to the effects of climate change. The summit committed $300 billion annual investment by developed nations to developing countries by the year 2035.

Additional focus this year was put on the clean energy transition, Article 6 of the Paris Agreement, Biennial Transparency Reports (BTRs), and Nationally Determined Contributions (NDCs). 


Who attended COP29? 

The COP29 event attracted more than 66,000 registered delegates from governments, NGOs, private sector leaders, and civil society from around the world. As host, Azerbaijan led attendance with 2,229 delegates, followed by Brazil, which hosts COP30 next year, with 1914 delegates. Last year’s host, UAE, maintained significant representation with 2,229 delegates. The US followed far behind, sending 405 delegates to the event.

Non-Governmental Organizations (NGOs) accounted for 9,881 representatives, and there was a significant presence of indigenous leaders, activists, and private sector participants. 

Attendance fell short of the record-breaking COP28 in Dubai last year, and COP29 saw notable absences among world leaders and a few countries, such as Papua New Guinea, which withdrew from delegations in protest against larger nations' lack of support for developing countries. 


Key announcements from COP29

85 announcements occurred at COP29 covering every thematic area, including agriculture, children and youth, digitalization, energy, finance, food, science, technology and innovation, and water. 

 


  • Article 6 of the Paris Agreement: COP29 made a significant milestone in carbon markets by finalizing frameworks under the Paris Agreement. Countries agreed to regulations for international carbon credit trading (Article 6.2), including transparent registries and upfront environmental assessments. It also established a centralized UN carbon market (Article 6.4), assisting developing countries through financing and capacity-building while protecting Indigenous rights and ensuring environmental integrity. The Supervisory Body will continue to work on adopting these measures, guided by the most recent scientific research, with a 2025 timeline.

 


  • Declaration on Water for Climate Action: On November 21, COP29 launched the Water for Climate Action program, which was supported by nearly 50 countries and organizations like the WWF and UNEP. The program aims to integrate water-related climate measures into legislation, improve scientific collaboration, and promote international cooperation on the initiative. The Baku Dialogue on Water for Climate Action also brought together global leaders to ensure that water remains key to the climate agenda.

 


  • Declaration on Reducing Methane from Organic Waste: More than 30 countries pledged to reduce methane from organic waste, such as food. This declaration supports previous COP commitments, including the Lowering Organic Waste Methane (LOW-Methane) initiative to cut 1 million metric tons of the waste sector's annual emissions and the broader Global Methane Pledge to cut all global methane emissions by at least 30% by 2030. 

 


  • Pledge to support Climate Security Mechanism: The UN Climate Security Mechanism and other bodies hosted a side event titled “Peace and Security in a Changing Climate.” The event highlighted climate change as a risk multiplier for conflicts, food insecurity, and water scarcity. As an outcome, many countries pledged to support the Climate Security Mechanism and partnerships to advance peace-positive climate action. 

 


  • Three green energy initiatives: A high-level roundtable on Green Energy, Hydrogen and the Global Energy Storage and Grids launched three energy initiatives, which reflect their efforts to take the outcomes forward for the first Global Stocktake on renewable energy and hydrogen. The initiatives are: 

 


    •  

      Global Energy Storage and Grids Pledge is a commitment to deploy 1,500 GW of energy storage globally by 2030, more than six times the capacity of 2022. In addition, they commit to adding or refurbishing 25 million kilometres of grids globally by 2030, recognizing the need to add more or refurbish an additional 65 million kilometres by 2040. 

    • COP29 Green Energy Pledge is a commitment to promote the green energy zones and corridors to connect sources of abundant green energy generation with the communities most in need by developing larger interregional and intraregional interconnected power grids. This grid will enable a more secure and cost-effective transmission of electricity over long distances.

    • COP29 Hydrogen Declaration is a commitment to accelerate the decarbonization of current hydrogen production from unabated fossil fuels by scaling up low-carbon, clean/zero-emission, and renewable hydrogen production. It seeks to minimize the 96 Mt of hydrogen currently produced from unabated fossil fuels and dramatically increase the production of green hydrogen from the existing one million tonnes per year.

 


  • COP29 Business, Investment and Philanthropy Climate Platform: Launched by the COP29 Presidency and UN Climate Change High-Level Champion on November 14, 2024, the platform is built to unite leaders from the business, finance and philanthropy communities to drive joint action for achieving the goals of the Paris agreement. 


Feedback on COP29

With temperatures temporarily surpassing the 1.5°C target of the Paris Agreement, the summit of COP29 highlighted the lack of ambition for aggressive climate action according to many critics and developing nations. 

According to the Council on Foreign Relations, the meeting was not likely to produce significant results to compensate for rising harm or prevent future catastrophic temperatures. CFR stated that nations left the summit potentially more divided than when they arrived, with most of the concerned feedback revolving around the financial decisions of developing nations.

Additional reactions

 


  • The Environment and Climate Change Minister of Canada, Steven Guilbeault, described Baku's leadership's "lack of ambition" as "deplorable." 

 


  • Dr. Nkiruka Maduekwe, CEO of Nigeria’s National Council on Climate Change, criticized the final deal as "an insult and a joke," indicating the dissatisfaction among developing nations regarding the financial commitments made. 

 


  • Gambia's Environment Minister Rohey John said, "Developed countries are not only delaying climate justice, but they are also blocking any potential economic progress for continents like Africa because they simply refuse to pay up," expressing serious worries about the financing agreement. 


In addition, the absence of some world leaders and the withdrawal of certain delegations in protest against the perceived inequities in support for developing nations also raised concerns about the inclusivity and sincerity of negotiations. 


What’s next?

Looking ahead to COP30, which Brazil will host next year, delegates aim to build on the actions and progress made at COP29. The current summit negotiators left a long to-do list; COP30 in Brazil is expected to take action on that and ensure the voluntary commitments due in 2025 align with the target of keeping the heating below 1.5°C (2.7°F) above preindustrial levels. The host country for the summit in 2026 remains undecided, with Turkey and Australia competing for the Presidency. 


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