As the 29th United Nations Climate Change Conference (COP29) wrapped up in Baku, Azerbaijan last month, reactions were deeply divided. While some celebrated agreements to triple climate financing for developing nations to $300 billion annually by 2035, those representing these nations dismissed the pledge as an “insult and a joke”.
Delegates from developing nations argue that is still a “paltry sum” compared to the $1.3 trillion they estimate is needed annually. These vulnerable nations seek financial assistance to recover from climate change impacts, and adapt through measures such as building flood-resilient infrastructure and developing clean-energy systems. While the COP29 figure is close to the “costed” needs reported in the nationally determined contributions of developing countries—ranging from $455 billion to $584 billion per year until 2030—it falls short when additional adaptation finance is factored in. Adaptation needs alone are estimated at an additional $215 billion to $387 billion annually, highlighting a significant funding gap that must be urgently addressed. Worse, when accounting for inflation, the updated pledge is worth even less than the original $100 billion goal set over a decade ago. A Cuba representative called the agreement not progress, but a step back.
This debate has raised an even bigger question: Are global negotiations on climate change making meaningful progress, or is it merely spinning its wheels?
The need for urgent action is undeniable. Global greenhouse gas emissions remain dangerously high, and the window to limit warming to 1.5°C is rapidly closing. Although 2024 may mark the first year where global temperatures exceed the 1.5°C threshold as an annual average, this does not mean the target is permanently out of reach. The Paris Agreement lacks a clear definition of how to measure temperature increases over time, allowing COP29 to reaffirm the goal of limiting long-term warming to 1.5°C above pre-industrial levels.
While COP29 delivered notable breakthroughs—such as advancements in carbon trading mechanisms, the adoption of more ambitious and actionable Nationally Determined Contributions (NDCs), and the full operationalization of the Loss and Damage Fund—it also highlighted critical shortcomings. Key gaps remain in securing adequate financing, ensuring equitable implementation, and translating commitments into tangible action, leaving many vulnerable nations questioning whether the promised progress will materialize.
Among COP29’s achievements is the launch of the long-awaited Article 6.2 and 6.4 mechanisms under the Paris Agreement, which provide distinct frameworks for carbon markets. Article 6.2 enables bilateral carbon credit trading, allowing countries to collaborate directly by financing emissions reduction projects in other nations and claiming the resulting reductions toward their own targets. For example, a country could invest in a wind or solar project abroad and count those emissions reductions toward its commitments. Article 6.4, by contrast, establishes a global carbon market under United Nations supervision. This centralized system allows not just nations but also private companies to trade verified carbon credits on a common platform. By creating a universal marketplace, Article 6.4 is designed to ensure accountability and prevent double-counting of emissions reductions.
Together, these mechanisms have the potential to unlock significant financing for mitigation and adaptation by providing an incentive for wealthier nations and private entities to invest in projects in developing countries. They could also boost transparency and accountability through standardized verification processes, ensuring emissions reductions are both measurable and credible.
However, these new carbon trading mechanisms as set forth are not enough. Without robust oversight, loopholes could allow countries or corporations to undermine the system’s integrity. Unfortunately, COP29 failed to adopt detailed guidelines on enforcement, leaving this critical issue unresolved.
While COP29’s breakthroughs in carbon markets and financing mechanisms laid a foundation for future action, national commitments remained a crucial measure of progress. Some nations stepped up with bold pledges to align with the summit’s goals. For instance, the United Kingdom announced plans to reduce greenhouse gas emissions by 81% by 2035 compared to 1990 levels, coupled with efforts to form alliances promoting clean energy. Brazil also unveiled ambitious targets in its updated NDC, aiming to cut greenhouse gas emissions by as much as two-thirds by 2035 compared to 2005 levels. These commitments could benefit from COP29’s advancement on the successful implementation of the Article 6 mechanisms, which offer a new, flexible pathway for countries to meet their targets through international cooperation and carbon trading. By leveraging these frameworks, nations can scale up their climate ambitions while ensuring accountability in achieving emissions reductions.
As the world looks ahead to COP30, urgency must define every decision. The tools and frameworks from COP29 must move into full implementation. Article 6 mechanisms must enable international cooperation, and nations must either demonstrate or update their NDCs to ensure real emissions reductions by the 2025 deadline.