After two weeks of intense negotiations, the COP29 climate conference in Baku, Azerbaijan, concluded with an agreement to triple climate finance flows to developing countries to $300 billion per year over the next decade, while making significant progress in developing international carbon markets.
However, this climate finance target has been strongly criticized by developing countries, with India's representative saying: "We are extremely disappointed" with the agreement reached.
New climate finance target
A major outcome of the conference was the agreement to establish New Collective Quantified Goal on Climate Finance - National Science and Technology) to align global financial flows with the goals of the Paris Agreement. Countries agreed that climate finance for developing countries should reach at least $1,3 trillion per year by 2035. However, the source of this funding remains unclear, only described as coming from “all public and private sources.”
The agreement also launches the initiative “Baku to Belém Roadmap with $1,3 Trillion Target”, preparing for COP30 in Belém, Brazil next year.
In addition, developed countries committed to mobilizing at least 300 billion USD developing countries by 2035 from “public, private, bilateral and multilateral sources.” This is a significant increase from the $100 billion target in 2020, which reached just $83 billion, according to the OECD.
Simon Stiell, UN Climate Change Secretary-General, called the new target “an insurance policy for humanity.” However, he stressed: “Like any insurance – it is only effective when the premiums are paid in full and on time.”
On the contrary, she Chandni Raina, representing India, has been highly critical, calling the $300 billion a “a number too small” and not enough to “promote appropriate climate action.”
Agreement on Carbon Market
Another important step forward at COP29 was the agreement to finalise Article 6 of the Paris Agreement, which aims to establish high-integrity carbon markets. The agreement details how countries will authorize the trading of carbon credits and operate a system to track these transactions (Article 6.2).
Environmental groups welcomed the deal, but noted there were still issues to be resolved to ensure transparency.
Rueban Manokara, head of WWF's carbon finance and markets working group, commented:
Nearly ten years since the Paris Agreement was adopted, the final approval of the terms for implementation is a major milestone. The agreement is a compromise, reflecting the challenging negotiations that have been going on since 2015. But overall, it is a positive sign that more guidance has been provided on how the Article 6 mechanisms will operate. While the final text is not perfect, it brings a level of clarity that has long been lacking in international efforts to coordinate emissions trading and carbon credits.
However, the organization Carbon Market Watch (CMW) expressed concern, saying the deal risks “leading to unregulated carbon markets.” Jonathan Crook, CMW's global policy lead for carbon markets, commented:
The package only makes minor improvements to transparency rules and does not do enough to clarify an already opaque system, where countries are not required to provide information about their transactions before they are made. Worse still, a last-ditch opportunity to strengthen the already weak monitoring process has been missed. Countries are still free to trade carbon credits that are substandard, or even non-compliant with Article 6.2, without any real oversight.
Source: esgtoday