COP29 faces a pivotal crossroads. Either developed countries provide and mobilise climate finance at scale to developing countries and make renewables competitive with fossil fuels all over the world, or the world faces a pathway of “escalating climate loss and damages and adaptation costs”, according to a policy brief reportedly circulating at the conference.
With negotiations alarmingly wide of the mark on the primary objective of securing a New Collective Quantified Goal (NCQG), the brief – COP29: The Economic Case for a New Common Quantified Goal of Climate Finance (NCQG) at Scale – argued climate finance is not just a moral obligation, but also in the economic interest of developed countries.
“It is crucial that policymakers and negotiators recognise the urgent need to commit to ambitious climate mitigation finance goals to deliver on the best available scientific imperative of limiting global warming to 1.5 °C,” the report concluded. “The time to act is now, and scaling up climate finance is not just a moral imperative – it is an economic necessity for the future of our planet.”
First ‘streamlined’ draft texts published
In an update today (21 November), the COP29 presidency has published a first set of substantially streamlined texts on critical mandates, including the NCQG. On the NCQG, the presidency said it “did not believe that presenting a wide range of numbers for the financial goal would be useful in this text”. The next iteration – to be released tonight – will be shorter and will contain numbers based on their view of possible landing zones for consensus.
“We are now in the endgame and we believe that a breakthrough in Baku is in sight. Everyone must engage with the texts and with each other so that they are ready to make the ambitious choices we all need.”
Although the text is narrowing, Stephen Cornelius, WWF deputy global climate and energy lead, noted so is the time to reach a final agreement. Negotiators and ministers “need to pick up the pace, ramp up their diplomacy and drive consensus around an ambitious climate finance deal”.
“The lack of a finance target in this draft is a worrying sign that the most challenging decisions are being left to the last minute. Despite being slimmed down, two vastly different options for the design of the NCQG remain in the text, leaving the final outcome uncertain.
“This agreement will decide the climate finance landscape for years to come. We simply can’t afford to get this wrong.”
Adaptation and mitigation finance
However, the outlook is not particularly optimistic, said Clemence Humeau, head of sustainability coordination and governance at AXA IM.
The lengthy draft agreement text on unlocking $1trn in finance for vulnerable countries to address climate change mitigation and adaptation issues, for example, “highlights the current geopolitical situation”, she said.
“There is increasing divergence in views on many structural issues, and concerns about debts and economic outlook for many of the countries expected to contribute to financing. The initial options outlined in the draft mirror those diverging views and indicate a limited momentum to collaborate on solutions and reach a consensus,” Humeau continued.
On Monday (18 November), the COP29 presidency itself had to step in to prevent technical work on the Mitigation Work Program – the body intended to provide guidance on reducing emissions in this decade – from being delayed until next year.
“It is also clear the private sector will have to play a role in contributing to the financing of developing countries to support them in achieving climate change mitigation and adaptation needs,” added Humeau. “This aligns with the net zero objectives that many in the financial sector have set for themselves. In this context, the private sector would benefit from a more pragmatic approach to negotiation.”
Energy Day
Last Friday (15 November) marked Energy Day at COP29, spotlighting significant initiatives that aimed to address critical challenges in the global energy transition. Allegra Ianiri, research analyst and MainStreet Partners, highlighted three announcements centred on accelerating renewable energy deployment, enhancing energy infrastructure and advancing clean hydrogen solutions.
The Green Energy Pledge promoted the development of green energy corridors and zones to support large-scale integration of renewable energy. These corridors are designed to enable the efficient transfer of renewable power from high-potential production areas to major consumption hubs. Key priorities include fostering regional cooperation, establishing robust regulatory frameworks, ensuring sustainable financing and scaling up high-voltage direct current cable production, which is vital for efficient energy transmission.
A Global Energy Storage and Grids Pledge was also agreed upon, aiming to address critical infrastructure gaps. The target is a sixfold increase in global energy storage capacity, reaching 1,500 gigawatts (GW) by 2030, and the addition of 90 million kilometres of grid infrastructure by 2040.
“The International Energy Agency welcomed this initiative, highlighting that while 670GW of energy was connected to the global grid this year – a record milestone – an additional 3,000GW of ready energy cannot be utilised due to insufficient grid capacity,” added Ianiri.
“These developments underscore the urgent need to prioritise transmission infrastructure. These new targets represent a significant step forward in addressing this longstanding bottleneck.”
Finally, the Hydrogen Declaration set global standards and regulations for clean hydrogen and its derivatives. Several countries, including Sweden, Uruguay and Italy, emphasised that hydrogen should be green – produced exclusively from renewable energy sources – and reserved for applications where no other solutions are feasible, rather than being diverted to sectors that can adopt direct electrification.
Methane emissions and agriculture
On Tuesday (19 November), the COP29 presidency launched the Reducing Methane from Organic Waste Declaration, with over 30 states among the initial signatories who combined represent 47% of global methane emissions from organic waste. Signatories declared their commitment to set sectoral targets for reducing methane from the organic waste within their future Nationally Determined Contributions.
In partnership with the Food and Agriculture Organization of the United Nations, the presidency also officially launched the Baku Harmoniya Climate Initiative for Farmers, acknowledging the fundamental role of farmers as agents of climate action.
This effort is designed to bring the dispersed landscape of existing climate initiatives in the field of food and agriculture onto one platform for the first time. In doing so, the platform will help to identify gaps and opportunities for future policymaking and support that recognise and empower farmers, villages and rural communities.
Reacting to this announcement, Matthieu Maurin, CEO and co-founder of Iceberg Data Lab, said the initiative “puts the spotlight on the necessity to reconcile the transition in the Food and Agricultural systems”, while increasing farmers’ resilience and food security and affordability.
“It also stresses the value of enforcing comprehensive traceability and certification systems in the supply chain to address imported deforestation, and to be capable of accounting for the positive impact on climate and nature of regenerative agricultural practices. Those issues are at the core of the request of the financial institutions that Iceberg Data Lab is supporting through its biodiversity and climate data solutions.”
