COP29 in Baku ended in the early hours of November 24, reaching a compromise deal on finance that will advance the global climate agenda to the next stage, but some countries’ negotiators said the agreement to triple the flow of climate finance to poorer countries was “abysmally poor” compared with what was actually needed. Other negotiators even labeled the deal “a betrayal.”
“The Baku Finance Goal represents the best possible deal we could reach,” COP29 President Mukhtar Babayev said. “In a year of geopolitical fragmentation, people doubted that Azerbaijan could deliver. They doubted that everyone could agree. They were wrong on both counts,” he argued.
“We have ended a decade-long wait and unlocked a critical tool for keeping 1.5 degrees in reach,” Babayev said. “Climate change is a transnational challenge and Article 6 will enable transnational solutions. Because the atmosphere does not care where emissions savings are made.”
Beyond the host country’s inevitable attempt at sugar coating the new agreement, COP29 critics focused on the fact that too much of the climate funding in the deal would come in the form of private sector contributions/investments, instead of direct grants to the various UN climate funding mechanisms from the richer countries as developing countries have long demanded. Amounts were far below the $1.3 trillion developing countries wanted to see delivered by 2035, with the final compromise deal for direct funding set at $300 billion. But nonetheless that was enough to yield a final agreement 33 hours after the original closing deadline.
The entire COP negotiation was overshadowed since early November by the assumption that the incoming administration of U.S. President-elect Donald Trump, who is considered to be a climate skeptic, was unlikely to deliver on any financial commitments made by the lame duck negotiating team still reporting to President Joe Biden.
The COP process is frustrating and inadequate, yet still essential, Stuart Brocklehurst, Deputy Vice Chancellor for Business Engagement & Innovation, Director of Green Futures Solutions, University of Exeter told NE Global on November 26, after returning to the UK from COP29 in Baku. “It forces governments to meet and debate action on climate change, nudging them towards progress. That progress is maddeningly – dangerously – slow, but losing this platform for action would be much worse. COP29 started with low expectations, it did deliver some achievements, but, against the challenging backdrop of some countries’ potential withdrawal from the Paris Agreement, we need COP30 next year to up the pace,” Brocklehurst said.
Azerbaijan’s Deputy Energy Minister and Chief Executive Officer of COP29 Elnur Soltanov told NE Global in an interview in Baku earlier that the global climate architecture would collapse without climate finance. “To me personally climate finance is something that keeps the global climate architecture together,” he said. “Beyond numbers, lack of decision-making could damage this global climate action architecture that we have so therefore any decision, any consensus is very important. But beyond that, the numbers should be definitely fair and ambitious and should be up to the scale and visions of the program and should definitely take into consideration needs and priorities of the developing states,” Soltanov added.
The COP29 Presidency of Azerbaijan on November 24 announced the agreement of the Baku Finance Goal (BFG), a new commitment to channel $1.3 trillion of climate finance to the developing world. This number fits the usual UN system pattern of headlining a large figure but providing few details on implementation. In this case only the $300 billion noted above is slated to come from developing countries budgets, multilateral financing institutions like the World Bank and other sources they control, and even that amount is not specified as pure grant money. The rest of the $1.3 trillion must be filled in by yet unspecified levies on shipping, frequent flyers, oil and gas and other yet unagreed sources.
“Success on the COP29 Presidency’s top priority for the UN Climate Summit represents a significant uplift from the previous climate finance goal of $100 billion and will unlock a new wave of global investment,” the COP29 Presidency said in a press release. The Baku Finance Goal contains a core target for developed countries to take the lead on mobilizing at least $300 billion per year for developing countries by 2035. This represents a $50 billion increase on the previous draft.
“The COP29 Presidency also succeeded in getting the Fund for Loss and Damage up and running and ready to distribute money in 2025. This decision was long awaited by developing countries, including small island states, least developed countries, and African nations. This aligns with the priority set by the President of the Republic of Azerbaijan, Mr. Ilham Aliyev, to address the challenges posed by climate change impacts on small island states under the COP29 Presidency,” it said.
The establishment of the Loss and Damage Fund was agreed upon during COP27 held in Egypt. The fund aims to provide financial assistance to countries most vulnerable to the impacts of climate change. During COP28 in the United Arab Emirates, a decision was made to launch the Fund’s operations. As usual in UN system negotiations, progress is always incremental.
The COP29 Presidency said it has taken significant steps to ensure the Fund’s operationalization, working closely with its Board and the World Bank. In September of this year, during the Fund’s third Board meeting held in Baku, critical measures were taken to commence its operations, including the appointment of Ibrahima Cheikh Diong as the Fund’s Executive Director.
Following the conclusion of negotiations, UN Climate Change High-Level Champion for COP29, Nigar Arpadarai, hailed the COP29 decision to renew the mandate for the High-Level Champions until 2030, “clearly signaling that Parties recognize the importance of non-Party stakeholders in supporting them to achieve the Paris Agreement goals across finance, adaptation and mitigation. I am excited to work with future Champions and all our partners to continue to accelerate inclusive action in all corners of the world.”
Mitigation and climate change adaptation
Soltanov told NE Global earlier that Article 6, which is about climate finance and mitigation in the most efficient form, is very important. “We have too many good things getting from Article 6. It’s about transfer of finance from developed to developing countries, it’s about transfer of technology, it’s about a portion of that money going to adaptation. So, there are too many good things in Article 6 for us to miss and we hope that there will be significant developments so that the mechanism can be working,” Azerbaijan’s Deputy Energy Minister said.
Turning to Loss and Damage Fund, Soltanov said there are a great deal of fairness issues. “Just transition is a very important issue. There’re continents like Africa whose contribution is below four percent or small island countries whose contribution is less than one percent but they are some of the most climate-vulnerable countries so adaptation becomes very important and within adaptation Loss and Damage Fund is definitely very important so making sure that Loss and Damage fund has a sustainable finance base and also starts dispersing credits and its money is of paramount importance,” he said.
Azerbaijan to accelerate regional green energy projects
Soltanov said that while Azerbaijan this year was chosen by the UN Climate Change Secretariat to push the climate action agenda forward as COP29 host country, at the same time “Azerbaijan has been involved is greening up its economy, including green energy transition. We’re very happy that, for instance the motto, the slogan for COP29 is ‘In Solidarity for a Green World,’” he said, adding that slogan was actually adopted earlier when Aliyev declared 2024 as the Green World Solidarity Year in Azerbaijan.
“So, what happens is all the mandated events and the mandated negotiation items, we’re very happy the global climate agenda very much coincides with the processes that Azerbaijan already started for itself and for others,” Soltanov said, adding that at the forefront is the idea to create a green energy corridor. “COP has helped increase the momentum of this green corridor to unlock the huge potential we have in the region in terms of green energy,” Soltanov said.
“Connecting our grid system to Kazakhstan and Uzbekistan will make our grids more resilient but at the same time it will open up the gates of exports both domestic cleaning up and export possibilities. The Caspian-Black Sea-Europe project and Central Asia-Azerbaijan project will move forward,” Soltanov said.
On November 12, at the 9th Meeting of the Ministerial/Steering Committee on establishing a “Green Energy” Corridor between Azerbaijan, Georgia, Romania, and Hungary, held within the COP29 framework, Italy’s CESI presented the preliminary report of the Feasibility Study for the “Green Energy Corridor” project. The session reviewed demand and production forecasts for renewable energy and “green hydrogen,” technology assessments, and the techno-economic potential of interconnectors. The project received expressions of support from the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).
Moreover, during the World Leaders Climate Action Summit at COP29 in Baku on November 13, Azerbaijan, Kazakhstan, and Uzbekistan signed an Intergovernmental Agreement on Strategic Partnership for Green Energy Development and Transmission. Azerbaijan’s Energy Minister Parviz Shahbazov hailed the deal between the three Central Asian states on November 13, noting, “This Agreement lays a strong foundation for the creation of a ‘green energy corridor’, the establishment of integrated electricity markets in the region, and the export of renewable energy to other regions.”
