
MEET US AT COP29
Major milestone in global carbon market standardisation
The first week of COP29 witnessed a significant breakthrough in the adoption of a high-integrity market framework under Article 6 of the Paris Agreement. Stringent standards were established for a centralised carbon market that aims to accelerate climate action and streamline national strategies.
The new framework is set to boost carbon credit demand and channel funds to developing nations, which should cut national climate plan implementation costs by up to USD 250 billion annually. This will make Article 6 fully operational, which is an important step towards implementing Nationally Determined Contributions (“NDCs”) in a cost-effective manner while increasing focus on mitigation and adaptation efforts for the countries. The new framework offers promising potential for driving a low-carbon transition and supporting developing nations in meeting their climate goals.
Critical push for climate finance goals
Asl eyes were on COP29 to establish assertive measures to unlock greater investment to address climate crisis, especially for developing countries. Discussions on climate finance have mostly centred on the New Collective Quantified Goal (“NCQG”), with developing countries advocating for a USD1 trillion annual target to replace the outdated USD100 billion commitment under the Paris Agreement.
Since current funding for climate finance mostly comes from developed countries' aid budgets, multilateral development banks and smaller private sector investments, discussions were long shifting towards streamlined policies that enable real and on-the-ground impact, avoiding overly complex financial systems. Although promising, negotiators have struggled to reach consensus, with developed nations tend to be cautious about committing to legally binding contributions, citing accountability concerns and budgetary constraints. With ministers set to join the talks this week, there is cautious optimism that heated negotiations could pave the way for a more ambitious NCQG framework.
Further, building on momentum from COP27 and COP28, the Loss and Damage Fund has finally reached a critical milestone, officially ready to accept contributions following key agreements. This achievement marks significant progress toward supporting vulnerable countries facing the harshest impacts of climate change, with projects set to begin financing in 2025. The World Bank also reaffirmed its commitment, highlighting the Fund's vital role in aiding affected communities.
Unveiling energy initiatives
In a manner similar to COP28, the significance of achieving global transition towards sustainable and equitable energy systems was reiterated at COP29. It highlighted the critical need to triple renewable energy capacity by 2030, aiming to reduce dependence on fossil fuels while providing clean energy access to underserved regions. Moreover, it pushed for doubling energy efficiency efforts and scaling clean energy investments, particularly in developing countries, to ensure that the energy transition also supports economic and social development. Having said that, the principle of "just transition," was emphasised to ensure that the shift to renewable energy should not leave anyone behind.
Within this scope, The Azerbaijan Presidency launched the following initiatives aimed at fostering collaboration between nations to overcome systemic and governance challenges, ensuring that policies for decarbonisation are inclusive and equitable:
- The Green Energy Zones and Corridors Pledge aims to establish designated areas for green energy development, fostering cross-border cooperation and investment in renewable energy. This initiative seeks to modernise infrastructure, create jobs, and stimulate local economies while reducing carbon footprints and driving regional innovation.
- The Global Energy Storage and Grids Pledge targets a six-fold global energy storage capacity increase by 2030, reaching 1,500 gigawatts. It also calls for the refurbishment of over 80 million kilometers of grid infrastructure by 2040 to integrate renewable energy, enhance resilience, and support a smooth transition to clean energy.
- The Hydrogen Declaration promotes clean hydrogen use in decarbonising industries like transportation, manufacturing, and power generation. It seeks to overcome barriers such as high production costs and regulatory uncertainty through public-private collaboration, aiming to establish a global hydrogen market and unlock its potential as a scalable, low-carbon solution.
Leveraging technology for climate action
COP29 set the stage for a future where digital and green transitions go hand in hand. The Inaugural Digitalisation Day at COP29 highlighted the pivotal role of digital technologies in addressing climate change. Key innovations like artificial intelligence (“AI”) and big data are set to revolutionise energy efficiency by optimising energy use across sectors and enhancing climate forecasting and early warning systems, helping communities better prepare for extreme weather events.
However, the rapid growth of digital services brings its own challenges, such as rising energy demand, increased emissions, and growing e-waste, particularly from energy-intensive data centers. That is why a high-level roundtable at COP29 discussed the need to balance digital progress with environmental impact. The COP29 Declaration on Green Digital Action, calling for global cooperation to ensure that technology drives sustainability while maintaining its ecological footprint, emphasized the importance of green digital solutions in the way to transition.
Conclusion
The first week of COP29 in Baku showcased meaningful progress as key achievements included the standardisation of carbon market framework under Article 6, operationalisation of the Loss and Damage Fund, heated discussions on ambitious climate finance goals through the NCQG, various energy transition initiatives, and the integration of green digital solutions. These strides reflect a promising determination to confront the climate crisis head-on.
As the second week unfolds, the challenge will be converting these ambitious proposals into binding commitments and actionable plans. As ministers step in and negotiations intensify, one question remains: will the world’s leaders rise to the challenge and turn bold ambitions into lasting change?