The conference that brings together almost 200 countries since this Monday to negotiate their climate commitments has just begun in Bakuthe first oil city in the world. The capital of Azerbaijan is the headquarters of this climate summit, the COP29an event organized by the UN and that, every year, brings together tens of thousands of people in a different country.
This year the theme of the meeting, which will take place between November 11 and 22 – barring possible delays due to tug-of-war – focuses on an essential and still unresolved issue: financing. That is, the money that rich countries will have to give to less developed countries to help them adapt to climate change and mitigate their emissions.
The main objective of this COP is clear: to increase economic ambition, in a scenario of geopolitical tension. According to the latest analysis Energy Insight of the Moeve Foundation (formerly Cepsa), one of the main challenges will be agree on a New Collective Quantified Objective by 2025. The key to success will be to establish a new horizon of economic support that multiplies the current one by ten to have a much more significant impact on the most vulnerable nations.
So far, the annual commitment of $100 billion (promised at COP15 in Copenhagen) is considered insufficient. However, There is no consensus on the exact amount nor regarding what formulas should be used to increase financing. Moeve’s document points out that some developing countries are calling for it to be increased to 1 trillion European dollars (i.e. one million million dollars) through exclusively public financing.
Instead, the majority of developed countries and the European Union propose a mixed solution, in which both public funds and private sector investments are available. In addition, they defend expanding the contributing countries to include emerging economies such as China. This is a position that continues to generate tensions between nations that, on the one hand, see private participation as a key source of resources and, on the other, fear that the private sector will limit its commitments to the most profitable markets, leaving aside the projects with lower immediate profitability.
What else will be decided at COP29
In the first official letter sent by the COP29 presidency to the parties, in July 2024, some of the main issues to be addressed at the climate summit are defined. One of the hot topics is carbon markets. «Although Article 6 of the Paris Agreement created the principles, and the rules for its implementation were agreed at COP26 in Glasgow, it is still there are no fully operational carbon markets internationallyso it is urgent to complete its implementation,” the report states.
At the Baku summit, nations are seeking a final push that will allow these markets to serve as an incentive for emissions reductions. This step is crucial not only for large industrial economies, but also for developing countries, which could benefit from the sale of carbon credits and, in turn, have new resources to finance the energy transition.
In this context, the Loss and Damage Fund is another central element on the COP29 agenda. Last year in Dubai, pledges were made that to date have not translated into sufficient contributions. The losses that many vulnerable communities are already suffering require immediate responses. Moeve’s report emphasizes the urgency of ensuring a fund that lives up to the estimated needs.
Furthermore, there is a need for COP29 to enhance ambition in three areas. Firstly, in emissions mitigation, since the Paris Agreement requires its signatories to present their updated Climate Change Fight Plans every 5 years. The following must be delivered in 2025, so the Baku summit will be a key moment to establish common bases of coordination and transparency for their update.
Secondly, we must talk about adaptation. “It is essential that countries define mechanisms to increase support for the development and implementation of national climate change adaptation strategies,” the analysis states. Finally, improving the mechanisms of transparency and collaborative action within the framework of the COPs will be another of the challenges to be addressed in Baku.
Why COP29 in Baku is important
Moeve’s analysis recalls three reasons why this COP29 is critical for the climate fight. The first is the urgency to act. In 2023, global temperatures will rise 1.45°C above pre-industrial levels, setting a record that leaves little room for inaction. “If urgent measures are not taken, we will increasingly witness extreme phenomena such as storms, hurricanes, heat waves, droughts, etc.,” the report notes.
The second reason is that, if the 2 ºC barrier is exceeded, the Economic consequences could be devastating: It is estimated that the cost could reach 17% of global GDP, according to the work. This scenario positions COP29 as a decisive summit not only for climate action, but also for global economic stability. Furthermore, COP29 will play a key role in providing continuity to all the agreements and projects initiated at COP28, as well as laying the foundations that will lead to success at COP30 and beyond.
The executive secretary of the United Nations Framework Convention on Climate Change, Simon Stiell, emphasized this perspective: “The COP29 must be the COP to stand up and deliverrecognizing that climate finance is essential to saving the global economy and billions of lives.
For her part, Maria Serra, climate activist and ambassador of the European Climate Pact, expresses in the analysis that “climate summits are the only established place where governments from around the world sit down to negotiate about the climate. “They are the only consensus mechanism we have to tackle this crisis that knows no borders and requires global solutions.”
In Baku, every debate and every agreement will be a key step towards the goal of containing rising temperatures. It is up to world leaders that this summit will go down in history not as a missed opportunity, but as the moment when the world truly began to confront the climate challenge of the 21st century.