Reflecting on COP29: Milestones Achieved and the Road Ahead
COP29 in Baku: Breaking New Ground in Carbon Markets, Climate Finance, and Global Collaboration
As COP29 concludes in Baku, it marks a pivotal moment in the global climate agenda, as countries wrestle with how to translate promises into real action. This year’s conference saw critical strides in global climate action, from fully operationalizing international carbon markets under Article 6 of the Paris Agreement to ambitious updates in countries’ Nationally Determined Contributions (NDCs). Yet, while progress was made, the aftermath highlights the challenges and opportunities that lie ahead as nations move to implement decisions and scale up ambition.
In this blog post, we’ll highlight the major takeaways from COP29 and discuss what comes next. From advancements in climate finance to the ongoing development of carbon markets, the decisions made at COP29 will shape the future of global climate action.
Bridging the Gap: The $300 Billion Climate Finance Target
A landmark shift in climate finance is underway, with a new goal of at least $300 billion annually by 2035—a threefold increase from the previous $100 billion target. This bold commitment is designed to support developing countries as they cut emissions and adapt to the worsening impacts of climate change. However, while the increase is significant, it still falls short of the resources needed to enable low-carbon development and protect vulnerable populations from mounting threats like droughts, floods, and wildfires.
Currently, only 23 nations, primarily those under Annex II of the UNFCCC, are required to provide climate finance. There is growing recognition that more donors are needed, as the global economic landscape has evolved since 1992.
The new climate finance target goes beyond public funding, aiming to mobilize $1.1 trillion annually from both public and private sources. This funding will drive efforts to reduce emissions and help countries adapt to climate impacts. It also highlights the importance of South-South cooperation and reforms to multilateral development banks, which will open the door for greater private sector involvement and innovative financing solutions.
Achieving this goal will require unprecedented collaboration and investment, marking a critical step toward a sustainable and equitable future.
NDCs: The Cornerstone of Global Climate Action
Nationally Determined Contributions (NDCs) are central to the Paris Agreement, driving efforts to limit global warming to 1.5–2°C. These commitments detail greenhouse gas (GHG) reduction targets, adaptation plans, and implementation timelines.
At COP29, countries unveiled ambitious 2035 NDCs:
- UK: Reduce GHG emissions by 81% from 1990 levels.
- Brazil: Cut emissions by 67% from 2005 levels.
- UAE: Target a 47% reduction from 2019 levels.
Despite these pledges, the UNFCC warns current commitments are insufficient, potentially leading to catastrophic warming of 2.5–2.9°C by 2100. Nations must phase out fossil fuels, increase energy efficiency, and expand renewable energy to meet climate goals.
For Canada, the next step is its 2035 NDC, due by December 2024. Building on its goal to reduce emissions by 40–45% below 2005 levels by 2030, Canada’s updated plan will shape its climate leadership.
NDCs now act as blueprints for sustainable development, uniting governments, businesses, and communities in the fight against climate change. Strengthening these commitments is essential for a resilient future.
Unlocking International Carbon Markets Under Article 6
COP29 marked a major milestone by achieving full operationalization of Article 6 of the Paris Agreement, paving the way for robust international carbon markets. This breakthrough enables both country-to-country trading and a centralized carbon crediting mechanism, benefiting global climate efforts.
Key Outcomes:
- Country-to-Country Trading (Article 6.2):
- Clear rules for trading carbon credits between nations.
- Transparent registries and technical reviews to ensure environmental integrity and compliance.
- Centralized Carbon Market (Article 6.4):
- Establishment of the Paris Agreement Crediting Mechanism under UN oversight.
- Comprehensive safeguards for environmental and human rights, including requirements for Indigenous Peoples’ consent and mechanisms for appeals or complaints.
- A science-aligned mandate to ensure that all actions reflect the best available climate science.
At COP29, Parties committed to refining mechanisms that will ensure transparency, equity, and environmental integrity in carbon markets. These advancements mark the beginning of a new era of collaboration and innovation, positioning carbon markets as a vital tool in achieving global climate goals.
Building on COP29: What the Future Holds for Climate Action
The outcomes of COP29 represent a pivotal moment in the global effort to address climate change. The progress made on carbon markets and climate finance lays the foundation for greater collaboration, increased financial flows, and stronger support for vulnerable nations. While the commitments are significant, the road ahead remains challenging, with much work still required to ensure that these systems deliver meaningful results for both people and the planet.
Looking forward, the continued refinement of carbon market mechanisms and expansion of financial support will be crucial in driving progress toward achieving the ambitious goals of the Paris Agreement. As we move toward COP30 and beyond, the focus will remain on fostering innovation, strengthening partnerships, and ensuring that climate action remains inclusive, equitable, and science based. The global community must continue to build on the momentum from COP29 to unlock the full potential of climate finance and carbon markets, ensuring a sustainable and resilient future for all.
To learn more about our carbon reduction solutions reach to our climate integration team at policyandregulatory@blackstoneenergy.com.
