What is COP29 and Why Is It Hailed as The “Finance COP”?

As climate change worsens, the UN’s 29th annual climate conference, a.k.a. COP29, taking place from November 11 to 22, 2024, in Baku, Azerbaijan, is a crucial chance to boost global efforts to tackle this problem. With the world experiencing severe weather events and record-high emissions, the summit will focus on vital topics like climate funding, national goals, and ways to deal with climate damage.

Nearly 200 countries will gather, and what happens here will shape international climate policies for years to come. Let’s break down all the important details you should know about this crucial climate talk. 

What Are the Main Goals of COP29?

COP29 is expected to be a major event for climate discussions, focusing on improving financial support for developing countries, increasing transparency, and setting strong climate goals. The summit aims to bring countries together to speed up the implementation of the Paris Agreement while tackling the intensifying impacts of climate change due to rising greenhouse gas (GHG) emissions.

Global Carbon Emissions in 2023

How Will Climate Funding Be Discussed at COP29?

Known as the “Finance COP,” COP29 will review climate funding for the first time in 15 years. The goal is to create a new target (NCQG) to replace the old goal of raising $100 billion annually by 2020, set during the 2009 Copenhagen Conference. 

• READ MORE about the previous COP here.

This new goal is important for helping vulnerable countries invest in clean energy and build resilience against climate impacts.

Negotiators will discuss key questions, like how much funding is needed, the timeline for achieving this goal, and what types of financial help are required. Initial talks suggest that the new goal could involve a mix of public and private funding sources. This creates a broad approach to climate finance.

A stronger climate funding goal will be vital for countries to enhance their climate commitments and create effective strategies. For instance, nations like India and Indonesia have stated that they need significant financial resources to meet their climate targets while still promoting economic growth.

Setting up reliable funding mechanisms will help build trust among nations, encouraging cooperation and dedication to global climate efforts.

What New Climate Goals Can We Expect at COP29?

Another important part of COP29 will be the expected announcements of new Nationally Determined Contributions (NDCs) ahead of the 2025 deadline. These contributions are essential for global efforts to fight climate change under the Paris Agreement. Major polluters, like Brazil, the UK, and the UAE, are likely to announce stronger goals for reducing GHG emissions.

Next-generation NDCs must set clear, ambitious targets for 2030 and 2035, which are critical for keeping global temperature rise within the 1.5 degrees Celsius limit. These commitments should include specific emissions reductions for different sectors, and guiding policies across energy, transportation, and agriculture. 

Clearly communicating these targets will also signal to investors the direction of climate finance, influencing funding toward low-carbon projects.

For example, the European Union plans to increase its climate ambitions, aiming for a 55% reduction in emissions by 2030. Similarly, the United States is expected to reaffirm its goal of achieving net-zero emissions by 2050, promoting significant investments in renewable energy and technological innovation.

How Will COP29 Address Loss and Damage?

As the climate crisis grows, some impacts go beyond what vulnerable countries can adapt to, making funding for “loss and damage” urgent. 

At COP28 in Dubai last year, the Fund for Responding to Loss and Damage was created to support developing nations hit by climate disasters. However, only $700 million has been pledged so far. That’s far less than the estimated $580 billion in damages vulnerable countries may face by 2030.

At COP29, developed nations are called upon to announce additional contributions to close this funding gap, ensuring that support reaches communities most affected by climate change. This funding is crucial for addressing immediate needs, such as rebuilding infrastructure and providing disaster relief, as well as long-term investments in resilience and adaptation.

For instance, countries like Pakistan and Bangladesh, which have faced severe floods and storms, require substantial international support to recover and strengthen their ability to withstand future climate impacts. Mobilizing resources for loss and damage will help these nations and reinforce the solidarity needed for effective global climate action.

What Is Needed to Close the Adaptation Finance Gap?

Closing the adaptation finance gap, estimated at $194-$366 billion per year, is another key goal for COP29.

Europe, in particular, faces substantial investment needs, requiring €800 billion for energy infrastructure by 2030 to meet its climate goals. By 2050, the region’s total green transition investment will need to reach €2.5 trillion, reflecting the scale of resources essential to achieve a sustainable and climate-resilient future.

Many developing countries are disproportionately affected by climate impacts but often lack the necessary financial resources to implement adaptation strategies. Countries have committed to doubling adaptation finance by 2025 as part of the Glasgow Climate Pact.

Negotiators will work to strengthen the Global Goal on Adaptation (GGA) at COP29 to ensure effective tracking of progress and financing. The GGA aims to enhance resilience and reduce vulnerability to climate impacts globally. 

Countries will be encouraged to share their experiences and best practices in adaptation, promoting a collaborative approach to tackle common challenges.

How Can Carbon Markets Be Used for Climate Action?

The summit will also look at international carbon markets under Article 6 of the Paris Agreement, allowing countries to trade carbon credits. Finalizing the rules for these markets is essential to ensure they help reduce global emissions effectively.

Carbon markets can motivate countries to cut emissions by allowing those with extra credits to sell them to those who need them. However, negotiators must resolve key issues regarding how credits are authorized and ensure environmental safeguards are in place. Clear guidelines on credit accounting and environmental integrity will be crucial for making these markets successful.

Countries like Costa Rica and Chile have already made significant progress in using carbon markets to fund their climate initiatives. Establishing solid carbon pricing mechanisms can drive investment in renewable energy projects and encourage sustainable practices across various sectors.

What Role Will Transparency Play at COP29?

COP29 will be a crucial moment for putting into action the enhanced transparency framework of the Paris Agreement. Countries must submit their first biennial transparency reports detailing their efforts to reduce emissions and their financial support needs. 

The Azerbaijani presidency has started the Baku Global Climate Transparency Platform to help developing countries manage this process. This platform aims to support capacity-building efforts and provide technical help to countries struggling with reporting requirements. 

Transparency is vital for building trust among nations and ensuring accountability in climate actions. By improving transparency, COP29 will create an inclusive environment where all countries can share progress, challenges, and lessons learned.

• READ MORE: Bank Of America Flags Liquidity Challenges in Carbon Markets: Will COP29 Usher in a New Era of Climate Finance?

How Will Non-State Actors Participate in COP29?

Another important part of COP29 will be the involvement of non-state actors, including businesses, civil society organizations, and indigenous groups. Their participation is crucial for driving climate action at local, national, and global levels. 

• The role of private sector investment in financing climate solutions is essential, so engagement from business leaders will be vital in shaping the discussions at COP29.

Events like the Climate Business Forum will give private sector actors platforms to showcase innovative solutions and collaborate with governments. Companies that have made strong climate commitments will be encouraged to share their best practices and engage in dialogues about scaling up their efforts.

How Will COP29 Address Climate Justice and Equity?

A key theme for COP29 will be addressing climate justice and equity. The effects of climate change are not distributed evenly; vulnerable communities often suffer the most from climate-related disasters despite contributing the least to greenhouse gas emissions. 

The summit must highlight the importance of fair climate action that prioritizes the needs of marginalized populations.

Discussions will likely focus on ensuring that climate funding reaches those most affected by climate change, including women, youth, and indigenous peoples. Involving these communities in decision-making will be vital for creating solutions that are effective and culturally relevant.

Can COP29 Create a Historic Opportunity for Climate Action?

COP29 presents a unique chance to raise global climate ambition and secure essential funding for sustainable development. A strong financial outcome will empower vulnerable nations to pursue low-carbon strategies while enhancing resilience to climate threats. 

The success of COP29 will rely on negotiators’ ability to overcome political divisions and prioritize the urgent need for climate action. By establishing a new climate finance goal, strengthening national commitments, addressing loss and damage, and improving transparency, COP29 can ignite meaningful progress in the global fight against climate change.

As the summit approaches, the world watches with hope and expectation, eager for this gathering of nations to produce the concrete actions and commitments needed to prevent the worst effects of climate change.

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