COP 29 Outcome Moves Needle on Finance

Just after 3 a.m. local time on Sunday, in Baku, Azerbaijan, COP 29 concluded with a set of decisions including a widely anticipated agreement on climate finance. 

In the last hours of negotiations, concerted pressure from the most vulnerable developing countries resulted in an improved outcome on the finance target, with a decision to set a goal of at least USD 300 billion per year by 2035 for developing countries to advance their climate action. Nevertheless there was considerable and justified disappointment on the part of developing countries given the gap that remains with their identified financing needs for climate adaptation and mitigation.

"We recognize the COP 29 outcome on climate finance as an important step forward,” said Patricia Fuller, President and CEO of IISD. “The goal is still far from meeting the actual finance needs for effective climate mitigation and adaptation, but it represents meaningful progress in supporting developing countries in their climate action efforts”.

Negotiations took place against a backdrop of continued misalignment of public financial flows with the Paris Agreement targets. Fossil fuel subsidies in 23 developed countries—those who committed to providing climate finance back in 1992, and are still responsible for its provision under the Paris Agreement—totalled at least USD 378 billion in 2023, as calculated by IISD based on data released by the OECD on November 21.

UAE energy package on life support, lack of progress on fossil fuel subsidies

Besides the negotiations on the new climate finance goal, a major point of discussion in Baku was how to take forward COP 28’s landmark energy package. In Dubai, governments agreed on the need to triple renewable energy capacity, double the rate of energy efficiency improvements by 2030, and transition away from fossil fuels in energy systems. 

Parties failed to agree on how to take forward the so-called “UAE consensus” on the energy package, with talks pushed to next year. Efforts to build upon the energy package stalled. Proposals to convene an annual dedicated space on energy transition, agree on new goals for storage and grids, and produce annual progress reports on the transition away from fossil fuels were rejected. 

The outcome failed to explicitly reiterate a call to phase out fossil fuel subsidies, and draft text calling on countries to reduce investments in fossil fuel infrastructure and develop “polluter pays” instruments was rejected.  

“COP 29 represents a step backwards on the hard-won UAE energy package consensus,” said Natalie Jones, policy advisor at IISD. “It is disappointing that more progress was not made on fossil fuel subsidies, which are inimical to the energy transition. We call on parties to submit 1.5C-aligned NDCs that fully reflect the Dubai energy transition deal.” 

Delayed NAP assessment, positive outcome on the global goal on adaptation

One of the key adaptation agenda items in Baku, the national adaptation plan (NAP) assessment, was forwarded to 2025 for further consideration, failing to meet the deadline countries set for themselves back in 2021. What could have been a powerful show of solidarity—a clear signal to vulnerable countries that the global community is committed to financing and supporting their adaptation efforts—was absent.

On the other hand, countries reached an agreement on matters related to the global goal on adaptation. The convened experts now have further guidance for the compilation and development of indicators for the UAE Framework for Global Climate Resilience. Importantly, means of implementation indicators will now be a part of the final outcome of the UAE-Belém work programme—highlighting the critical importance of finance, technology transfer and capacity building for adaptation. The Baku Adaptation Road Map and the Baku high-level dialogue on adaptation were also established at COP 29.

“Although the salient politics of climate finance and a trust deficit impacted the final push for a robust outcome on the NAP assessment, we nevertheless welcome the new opportunities to continue raising the profile for adaptation and hope these yield tangible outcomes in future sessions,” said Jeffrey Qi, Policy Advisor, Resilience Program.

Missed opportunities on human rights and gender

Parties agreed a 10-year extension of the Lima work programme on gender, however they missed an opportunity to adopt a more nuanced and intersectional framing of gender issues. Further, the NCQG decision does not explicitly address human rights and the imperative of gender-responsive climate finance.  

“Gender-responsive and human-rights based approaches are essential for the effectiveness of climate action,” said Angie Dazé, IISD’s Director of Gender Equality and Social Inclusion for Resilience. “We need to keep the pressure on to ensure that intersecting inequities on the basis of gender, age, disability, and other factors are acknowledged and addressed across all streams of the negotiations.” 

The conference in Baku brought the world face-to-face with the toughest questions on climate action. While COP 29 saw brief moments of optimism and progress, the outcome remains far from what we need to keep global warming within 1.5°C and achieve a climate-resilient future.

Key milestones loom on the horizon: the first Biennial Transparency Reports are due by the end of 2024, Nationally Determined Contributions (NDCs) by February 2025 and further negotiations on the New Collective Quantified Goal (NCQG) by the end of 2025. These deadlines set the stage for critical decisions in Belém next year.