- COP29 concluded with a $300 billion climate finance commitment by 2035, falling far short of the $1.3 trillion demanded by developing countries.
- While it witnessed intense debates over ambitious mitigation action and unilateral trade measures, the Parties agreed upon Article 6 of the Paris Agreement, effectively operationalising the carbon market.
- The COP process was however criticised for its inability to deliver meaningful outcomes, with prominent leaders raising concerns and a few calling for urgent reforms.
The climate negotiations in Baku, Azerbaijan, concluded on Sunday morning with a contentious $300 billion climate finance deal for developing countries by 2035, despite objections from several nations.
COP29, also known as the ‘Finance COP,’ was expected to finalise a climate finance deal in a year when countries are preparing for the third round of Nationally Determined Contributions (NDCs) to be submitted in 2025. However, the finance deal, intended to catalyse ambitious NDCs, fell far short despite intense negotiations that ran hours behind schedule.
Climate finance negotiations to finalise New Collective Quantified Goal (NCQG) on climate finance had been going on for three years, with the G77 plus China, the largest bloc of developing countries, demanding an annual transfer of $1.3 trillion. This includes around $600 billion as grants or concessional loans from developed nations to support emission reductions and climate adaptation.
While the COP29 agreement acknowledges the $1.3 trillion target, it shifts the responsibility to collective global efforts to enable it by 2035 rather than the developed countries alone. Developed countries agreed to mobilise only $300 billion annually—and that too by 2035. This new commitment is expected to come from a combination of public, private, bilateral, multilateral, and alternative sources, as outlined in the final agreement.
The decision was criticised by many for the fund being insufficient and also for how it was finalised. Chandani Raina, an Indian negotiator, expressed her disappointment during the final plenary session after the agreement was adopted. She remarked, “We wanted to make a statement prior to any decision on the adoption; however, this has been stage managed. We are extremely disappointed with this incident. We absolutely object to this unfair means followed for adoption.” Her statement was met with loud applause from delegates in the plenary hall.
Raina also criticised the proposed amount as “abysmally poor,” emphasising its inadequacy in supporting ambitious NDCs and addressing adaptation requirements. “India does not accept the goal proposal in its present form,” she said.
UN Secretary-General António Guterres echoed similar concerns: “I had hoped for a more ambitious outcome – on both finance and mitigation – to meet the great challenge we face.”
Carbon market, border adjustment and mitigation
Beyond climate finance, COP29 witnessed significant debate over several issues, including Article 6 of the Paris Agreement, which governs carbon trading through bilateral and United Nations (UN)-managed mechanisms, the Mitigation Work Programme, and the Global Stocktake (GST), which focuses on ambitious climate actions and unilateral trade mechanisms.
Late Saturday night, parties at COP29 reached an agreement to operationalise the carbon market under Article 6 of the Paris Agreement, nearly a decade after its introduction in 2015. However, experts have also criticised the deal. “The flaws of Article 6 have, unfortunately, not been fixed,” commented Isa Mulder, a policy expert on global carbon markets, who pointed out the lack of accountability in the new mechanism. Article 6 also made headlines on the opening day of COP29, when two rules under Article 6.4, which governs the UN-led carbon trading system, were approved contentiously and hailed as a significant achievement for the negotiations in Baku.
COP29 saw intense debates over ambitious mitigation expectations and unilateral trade measures. Developing countries wanted to discuss the emerging trends of adopting “unfair” unilateral trade measures – such as the Carbon Border Adjustment Mechanism (CBAM) – in the name of mitigation action. This measure imposes a carbon tax on imports into the European Union countries. In recent years, several countries have adopted such measures, prompting developing nations to demand their discussion at COP29.
On November 6, China, representing the BASIC group (Brazil, South Africa, China and India), submitted a proposal to include climate change-related unilateral restrictive measures on the COP agenda. This proposal became one of three contentious items that triggered an eight-hour agenda dispute on the opening day of the Baku climate negotiations. Although the presidency excluded it from the agenda, it assured parties of further consultations on the issue. India has also repeatedly raised issues related to unilateral trade measures during the negotiation process.
The issue eventually appeared in the final draft of the United Arab Emirates dialogue on the Global Stocktake (GST) on November 24, which noted that unilateral measures in the name of combating climate change should not result in arbitrary or unjust discrimination. While the GST document has been deferred to the next round of negotiations, a negotiator, on the condition of anonymity, described it as a significant achievement.
Another contentious issue at COP29 was a push by the developed countries for ambitious mitigation measures following the GST outcome in Dubai in 2023, including transitioning away from fossil fuels. However, Saudi Arabia and its allies managed to stall progress on GST negotiations at COP29. The influence of the group was visible in G20 also when the G20 communique issued during the Baku climate talks omitted the mention of “phase-out of fossil fuels.”
While the G20 declaration endorsed the Dubai agreement and highlighted ambitious climate action, it avoided direct reference to fossil fuel phase-outs, a decision that drew attention at COP29. The GST negotiations will now continue in Bonn in Germany and Belém in Brazil in 2025.
Finally, parties dispersed on Sunday morning, taking their grievances related to either ambitious climate finance or mitigation action.
“No country got everything they wanted, and we leave Baku with a mountain of work to do,” said Simon Stiell, Executive Secretary, UN Climate Change, on the occasion of the event’s conclusion.
Read more: Carbon trading rules fast-tracked at COP29, amid criticism
A crisis of confidence
When Chandani Raina criticised the adoption process at COP29 during the final plenary, describing it as “stage-managed” and termed it a sign of diminished trust and collaboration, her concerns were not isolated. The two-week negotiations in Baku witnessed several moments of walkout, heckling, and questioning of the entire negotiation process.
Despite a scheduled conclusion on Friday evening, developed countries withheld climate finance figures until the last day, creating chaos at the last moment. On Friday, they proposed $250 billion from all sources, a figure immediately rejected by developing nations. Frustration was visible among delegates and civil society present at the venue. Climate activists demanding climate justice even heckled U.S. climate envoy John Podesta.
Then on Saturday, developed countries revised their offer to $300 billion, but the proposal failed to address the needs of small island states and least developed countries (LDCs), prompting a temporary walkout. A final draft with the same figure was introduced late Saturday night and adopted within hours, as COP29 President Mukhtar Babayev gavelled the deal before countries could voice their objections.
“During the difficult final hours, climate justice suffered an unprecedented test. The result is a flawed compromise between donor countries and the most vulnerable nations in the world. This COP process needs to recover from Baku,” said Li Shuo, Director of the China Climate Hub at the Asia Society Policy Institute.
Before this, the COP process itself had faced broader criticism. Scientists, advocates, and policy leaders—including former UN Secretary-General Ban Ki-moon and former UNFCCC Executive Secretary Christiana Figueres—signed an open letter to all parties of UNFCCC and its Executive Secretary Simon Stiell, calling for urgent reforms. They argued that the current structure is inadequate for achieving the exponential change needed for a safe climate in the future.
The letter followed reports of a significant presence of fossil fuel lobbyists at COP29 and a controversial statement by Azerbaijan’s President Ilham Aliyev, who referred to oil and gas as “a gift of God.”
The way the final decision related to NCQG was achieved, further intensified these concerns. Calling the adoption of NCQG bulldozed, the Least Developed Countries (LDC) said, “This outcome is a travesty. It sacrifices the needs of the world’s poorest and most vulnerable to protect the narrow interests of those who created this crisis.”
“Countries seem to have forgotten the reason why we are all here—it is to save lives. We must work hard to rebuild trust in this vital process,” said Tina Stege, climate envoy for the Marshall Islands, one of the most climate-vulnerable countries.
Banner image: View of the room during the qurultay convened by the COP29 President. The Baku climate negotiations concluded with a $300 billion finance deal. Image by IISD-ENB | Mike Muzurakis.
Credits
