In the face of geopolitical and economic headwinds, the agreement reached at COP29 has upheld the spirit of multilateralism. While significant progress has been made over the course of 29 COPs, it is clear this process must do a lot more, much more quickly, and commensurate to the scale and urgency of the challenge we collectively face.
Last week’s agreement in Baku moves us forward by setting the stage for the next decade of climate action and ambition, but it also sends a helpful warning: we must do much more in this critical decade.
We will remember the Baku COP for its landmark agreement of the $1.3 trillion climate finance goal for developing countries by 2035, including at least $300 billion annually in international support.
These figures mark a threefold scale-up of public-based support from current financing levels, a much-needed shift moving the climate-finance conversation from billions to trillions, and an expansion of sources, including flows between developing countries and private investment, that better reflect real-world investments.
While these figures are a step in the right direction, they remain short of the $2.4 trillion in climate finance needed annually by developing countries by 2030. Making up this shortfall will require us to consider creative solutions to unlock finance at scale, particularly from the private sector.
In this regard, TBI is particularly optimistic about COP29’s breakthrough to finalise the rules for carbon markets, which will allow countries to meet their climate targets by investing in emissions reductions in other jurisdictions, increasing climate ambition and reducing overall costs. This long-awaited agreement will boost international finance flows, unlocking tens of billions annually by 2030 of trades worldwide and helping countries deliver their climate plans more effectively and efficiently.
TBI also welcomes the decisions made in Baku to operationalise the new fund for responding to losses and damage caused by climate change, which will begin disbursing funds in 2025. The global community must continue to scale up support for those most vulnerable to the adverse effects of climate change, ensuring better integration with the global architecture on disaster risk reduction and response.
Outside the negotiating room, the COP29 Presidency also launched several welcome action-agenda initiatives. TBI is proud to have signed up to the COP29 Declaration on Green Digital Action, the COP29 Green Energy Pledge on Green Energy Zones and Corridors, and the COP29 Global Energy Storage and Grids Pledge.
Looking Ahead
Many developing countries voiced their dissatisfaction with the deal in Baku, and tensions will undoubtedly persist regarding the efficacy of the COPs and trust between developed and developing countries. Further, dissatisfaction over the sufficiency of financial support, particularly relating to just transitions in developing countries, risks dampening the level of ambition in next year’s round of Nationally Determined Contributions (NDCs).
Therefore, looking ahead to COP30, urgent action is vital. We must double down on turning these latest finance commitments into reality, strengthening partnerships between finance providers and developing countries, and ensuring the plans and project pipelines are in place for finance and technology to flow. Continued action is required on all fronts to ensure that the agreements reached in Baku translate into meaningful progress on the ground.
TBI’s Commitment to Action
Addressing the collective challenges we face requires effective government action and partnerships that align the politics, plans and regulations needed to accelerate clean-energy investment, harness the power of technology and support communities in adapting to climate change.
TBI remains committed to advancing climate solutions in our partner countries, working to provide the finance, technology and policy solutions to unlock climate action at scale.
The Institute stands ready to work together to ensure that the commitments made at COP29 translate into real and impactful climate action where it is needed most.