COP29, held in Baku, Azerbaijan, sought to move forward the global climate framework, as does every annual gathering of climate experts. Despite the well-known challenges of seeking to agree outcomes between nearly 200 countries, some progress was made on key areas like finance and carbon markets. But this international conference also highlighted the complexities of aligning commitments with practical, impactful action. This analysis provides a short review of the key developments and challenges that emerged.

The most notable outcome of COP29 – which had been informally called ‘the finance COP’ - was the agreement on the New Collective Quantified Goal (NCQG) for climate finance. It set two targets. The first, of $300 billion per year by 2035, refers to financial support from the governments of developed countries to developing countries. This is connected to the principle of “Climate Justice” – that those who have least caused climate change are most impacted, so climate finance needs to ensure that vulnerable or less able nations are helped to address the impacts of climate change and to transition to a low-carbon future. Whilst $300bn is a significant commitment, and triples the last $100bn finance pledge, some developing nations remain concerned that it will not be enough - and that a Trump-led USA might shy away from implementing it.

The second target set by NCQG seeks to protect against these risks by bringing in other sources, including innovative finance, with the aim of scaling up resources to $1.3 trillion per year target by 2035. COP29 also launched the “Baku to Belém Roadmap” to guide implementation of the $1.3tr, and report progress to 2025 climate talks in Brazil. Taken together, the two targets of the NCQG provide more finance than before, from a broader range of sources, for much more climate action. It also allowed non-traditional donors, such as China, to contribute voluntarily to climate finance. But delivering NCQG will require significant effort and bringing in new actors. 

Another key outcome was the successful conclusion of talks on Article 6 of the Paris Agreement. Parties have been struggling to agree to the rules of Article 6, which deals with carbon markets, for many years. Doing so moves us toward establishing an effective and transparent global carbon market. Under Article 6.2, which covers bilateral trades between countries of carbon credits (called ITMOs), negotiators agreed a dual-layer international registry system that will enhance the transparency and integrity of this form of carbon trading. The agreement also allows the transfer of carbon credits from earlier afforestation and reforestation projects (under the Kyoto Protocol) to this new carbon market, provided they meet new emissions standards. Article 6.4 set out how the new Paris Agreement Crediting Mechanism (PACM) would build upon and expand the scope of the earlier CDM (Clean Development Mechanism) as the global carbon trading mechanism.  Article 6.8 set the framework for technical cooperation to help countries participate in the carbon markets. This group of agreements should pave the way for the high quality, robust carbon markets we need to support more emissions reductions and removals, by driving finance toward the most impactful and cost-effective interventions. This is crucial if we are to rise to the difficult challenge of ensuring enough ambitious climate action to deliver the 1.5°C climate goal.

COP29 did not deliver much on climate ambition. After much wrangling, countries agreed to adopt the Mitigation Work Programme: the area focussed on climate action and ambition. But this agreement did not build on the COP28 Global Stocktake outcomes as firmly as many hoped – failing to set clear benchmarks for the new round of nationally determined contributions (NDCs) due in 2025, or to clearly reinforce last year’s declaration on a transition away from fossil fuels. 

The Mitigation Work Programme did acknowledge thematic areas such as cities, buildings and urban systems, identifying actionable solutions, but lacked a comprehensive push to ensure that global emissions reductions remain aligned with the Paris Agreement’s goals. The urgent need to make stronger commitments on  decarbonisation is underscored by the latest World Meteorological Organisation (WMO) “State of the Climate” report, which predicts that the 1.5°C threshold is likely to be exceeded in 2024. To keep this critical goal within reach,  COP30 will need to do better than COP29 on accelerating action on decarbonisation, reductions and removals.

There were five areas discussed under adaptation at COP29 – the most important of which were national adaptation plans (NAPs) and the global goal on adaptation (GGA). Progress was slim, with little substance agreed on the UAE Framework (adopted at COP28 to “guide national efforts to protect their people and ecosystems from climate change”) and the related UAE-Belem work programme to agree indicators against which progress would be judged. After difficult negotiations, discussion of NAPs was postponed for further negotiation next year, and a last-minute GGA agreement was adopted – but left many parties unhappy about the “enablers of implementation”, which some take to mean finance and others do not.

These weak results underscore the ongoing challenges around providing comprehensive support for countries vulnerable to the impacts of climate change, and the growing need to adopt mitigation actions that deliver adaptation co-benefits.

COP29 adopted the final arrangements for the Loss and Damage Fund (FRLD) created at COP28, to enable it to begin disbursements next year.  Countries pledged just under $800 million to support the fund’s operations. This will help support countries that are already experiencing climate impacts, such as extreme weather events and rising sea levels. However, UN Secretary General Antonio Guterres was amongst those saying that that these pledges were not enough to address the scale of loss and damage need.

On gender equality, COP29 extended the Lima Work Programme on Gender for another ten years and began developing a new Gender Action Plan, to be presented at COP30. This continues the direction of travel toward integrating gender considerations into climate action, with a focus on including gender- and age-disaggregated data in decision-making. But the delay in the development of a concrete Gender Action Plan means that much more remains to be done.

Finally, G20 Leaders reaffirmed their commitment to the Global Stocktake outcomes and to tripling renewable energy and doubling energy efficiency. Their declaration highlighted the shared recognition of the need for urgent climate action, but was not specific enough to inject much momentum into negotiations or action.  Action pledges on hydrogen, methane, and green digital action, as well as other declarations, could provide valuable frameworks for sector-based action. However, as always, the real test will be in ensuring that these pledges are backed by financial and policy tools to drive implementation.

In conclusion, COP29 represented a step forward in accelerating climate action, setting a helpful, clear direction on climate finance and carbon markets in particular. However, the conference also highlighted ongoing challenges in securing ambitious emissions reductions and ensuring that financial support reaches those who need it most. Looking forward to COP30, it is clear that the international community needs to redouble efforts to drive the urgent, transformative action needed. Achieving the 1.5°C target looks more challenging as time passes, particularly given uncertainty over the role of the USA. Ultimately, success will require more implementation as well as ambition. The most positive aspect of COP, as reported by our team there, was the sheer level of determination and collaboration occurring outside the negotiations, as businesses, NGOs, IFIs and other stakeholders identified how to take more action together to prevent and address dangerous climate change. COP29, like every UN climate summit, clarified further the global framework for action. But implementation and collaboration – in which we work together to take that action – remain ultimately the key.