There is growing scepticism about how long the current COP process can continue without significant changes. I agree there’s a problem, but is there a credible, practicable alternative?
What came out of COP29, the latest round of climate negotiations held in Baku, Azerbaijan? Certainly not the pace of change needed in a climate crisis, and even in negotiating terms, Baku saw only incremental progress.
The main outcomes, formally known as the Baku Climate Unity Pact, includes a new finance goal, a decision on a Mitigation Work Programme (MWP), and work on the Global Goal on Adaptation (GGA). Also, rules on carbon markets under the Paris Agreement were finalised. And some progress was made towards funding loss and damage (L&D).
There was a deadlock on several issues. Key among these was how to implement the outcomes of the global stocktake (GST), the big decision from Dubai in 2023. Disappointingly, on just transitions, countries did not even agree to forward text; as happened on other matters. What do these outcomes mean?
In this article, I discuss these main outcomes. And then reflect on how politics shapes negotiating outcomes, both within the COP process and more broadly.
New finance goal
COP29 was billed as a “finance COP”. The tone of ambition was to be set by the new collective quantified goal (NCQG). In Paris in 2015, developed countries had confirmed a 2009 undertaking to mobilise $100-billion per year in the context of meaningful mitigation actions and transparency.
And it was agreed that an NCQG would be set by 2025, increasing “from a floor”, i.e. higher. What was agreed fell far short of what is needed.
The Baku decision eventually agreed “at least $300-billion per year by 2035”. Adjusted for inflation, the ambition of the new goal actually represents less than a tripling of the previous $100-billion mobilisation goal. “By 2035” means that finance increases up from the current level to $300-billion per year, which if linear, would be $120-billion per year in 2026, and increase by $20-billion each year.
Essentially, developed countries were keen to have global mitigation consistent with 1.5°C, but not finance commensurate with 1.5°C.
That gradual increase is far from meeting the needs of developing countries (or developing economy countries, as President Cyril Ramaphosa likes to call them). The decision itself indicates that $455-billion to $584-billion per year is needed to implement nationally determined contributions, with $215-billion to $387-billion annually for adaptation finance.
Developing countries had put forward a mobilisation goal of $1.3-trillion. That number made it into the text, but only as an aspiration goal – and importantly, from public and private sources, reflecting a belief that private capital will somehow pay for most of this.
That would buck the trend, given that climate change has historically been a result of capital flows to fossil fuels and other high-emitting activities). Yet, there is a Baku-to-Belém roadmap to scale up finance, so we will see next year in Brazil if this is real or funny money.
It gets worse. The $300-billion per year does not include a provision goal. In plain language, it is not clear what developed countries provide, and how much is “mobilised”. To a significant extent, this lets treasuries in the Global North off the hook. There is no clear share of the total that will be paid as grants as distinct from loans – which have to be repaid.
There is some good language, however, on not increasing debt levels, which are already unsustainable in many developing countries.
Developed countries sought to widen the contributor base and narrow the recipient base. In plain terms, get others (especially China) to also pay, and pay not to all developing countries, but only some.
Contributions to the NCQG were resisted by developing countries as undoing the differentiation reflected in article 9 of the Paris Agreement – developed countries have continued obligations, whereas others may contribute, i.e. voluntarily.
China is making big investments, including in other developing countries, but is not ready to have this count towards NCQG, having no legal obligation – and seeing the lack of finance ambition from G7 countries. And increasingly, developed countries seek to pay only Least Developed Countries (LDCs) and Small Island Developing States (SIDS) – with ambiguity about African countries.
It should come as no surprise, then, that many developing countries were deeply unhappy. Small islanders and LDCs walked out, for a while, in the final days. After the decision was gavelled through by the COP president – without pausing to see if there were any objections – several countries rejected the goal. India, Cuba, Bolivia and Nigeria were particularly vocal. Yet the decision stands, their views will merely be noted in the COP report.
The negotiation process was weak and criticised by many negotiators who felt left in the dark about how the text was being developed. A minister from India described the process as “stage managed”.
There were some significant gains on climate finance. The NCQG decision set a goal to significantly reduce the cost of capital by 2030. That could really make a difference – developed countries can borrow to finance mitigation at commercial rates, whereas developing countries pay much higher interest.
Also, the decision seeks to increase mobilisation ratios – the amount each dollar or euro mobilises – and increase non-debt instruments. It is clear that finance for adaptation, which should be mostly in grants, needs to be scaled up dramatically.
On transparency of the NCQG, the role of the enhanced transparency framework is not clear. There will be some tracking progress through biennial progress reports by the Standing Committee on Finance. Whether the transparency and reporting on NCQG are enough to know whether the $300-billion has been met remains to be seen.
A big change is signalled (again) – the importance of reforming the multilateral financial architecture. The way in which the climate and finance ecosystems interact more productively may be rate-determining for responding to the climate crisis.
Mitigation
On mitigation, Baku agreed on the Mitigation Work Programme (MWP). The mandate of the MWP does not include setting new targets. So developed countries seemed to declare the MWP a failure, even though it still has two years to run.
The mitigation negotiations were not helped by a process that separated technical and political due to divergence over the outcomes of the first global stocktake. There was bitter disagreement over whether to push further on fossil fuel transitions collectively, or leave that to each country – i.e. “nationally determined”. In short, we have not found a way as a global community to talk about equitable fossil fuel transitions.
The MWP decision does not address mitigation in the MWP; and the text that was developed in ministerial consultations – led by Minister Dion George of South Africa and his Norwegian counterpart – were placed into another text, the UAE dialogue (to which I’ll get, below).
Yet, incremental progress on mitigation is not enough. Given the urgency of the climate crisis, COP30 in Brazil next year will have to have much stronger results on mitigation.
Adaptation
On adapting to climate impacts, which are already happening and steadily getting worse, COP29 did take some high-level action and advanced technical work. The decisions launched the Baku Adaptation Roadmap and the Baku high-level dialogue on adaptation.
There will be useful technical work to develop indicators, which will help track progress to 11 targets and understand collective progress towards the Global Goal on Adaptation (GGA). While the indicators’ work had already been set up in Dubai last year, a smaller, more useful set – from 6,000 indicators submitted – will be identified and considered at the next meeting in June 2025. Baku also agreed to a standing agenda item on the GGA after COP30.
Ambition in adaptation is sometimes referred to as “transformational adaptation”. Yet when reading reports of the Intergovernmental Panel on Climate Change (IPCC), it seems like transformational adaptation is an ideal, nowhere to be found in the real world.
There was an interesting synthesis report presented in Baku, and a request to the secretariat to develop a more user-friendly version. Perhaps we can think of transformational adaptation as a vision, guiding in a good direction – without suggesting that incremental adaptation should be discussed. An IPCC Task Force on Adaptation was mooted but not agreed upon.
Loss and damage
On funding of loss and damage (L&D), Baku followed up on the success of establishing a fund in Dubai in 2023. COP29 agreed on the final arrangements for the Fund for Responding to Loss and Damage (FRLD), enabling it to begin disbursing financing in 2025. The FRLD will be accountable to the UNFCCC and Paris Agreement, with regular reporting obligations. It remains, of course, to fill the fund, and get from the current level of hundreds of millions to hundreds of billions of dollars.
While there was some progress on technical work on the GGA and FRLD, the attention – and finance! – for both remains inadequate, given ever-increasing climate impacts. Adaptation and L&D should be treated with extreme urgency, but are not.
Just Transition Work Programme
Just transitions are very important processes, in South Africa and globally. Just transitions to net zero emissions combine ambition (the net zero bit) with equity – and that is an approach to equity in mitigation that can work in many contexts.
COP27 in Sharm El-Sheikh had set up a Just Transition Work Programme (JTWP) in 2022. Interestingly, it focuses mainly on mitigation, but also includes elements of adaptation – and opening further conversations on just resilience, which started in the GST.
In Baku, parties were unable to adopt a decision on the Just Transition Work Programme and will revisit consideration in June 2025. The African Group in particular pushed for concrete outcomes. The G77 and China proposed to develop just transition guidance frameworks for the integration of principles of equity and fairness in the planning and implementation of climate action within and outside the UNFCCC.
The framework was to address both domestic and global action and send signals. Yet developed countries, who were proponents of strong signals on mitigation, unfortunately opposed signals on just transitions. There was not even agreement to forward the documents.
Market mechanisms under article 6
A significant decision at COP29 is one that fully operationalised article 6 of the Paris Agreement on carbon markets. Guidance for market-based mechanisms has been developed, and has taken much longer than the rest of the Paris rule book, which was largely agreed in 2018.
Baku agreed on guidance for cooperative approaches, essentially bilateral, which have a dual-layer international registry system with an accounting basic function.
For those countries requesting it, there will be an additional transaction function, with holding and transferring accounts. Under a more centralised “Paris Agreement Crediting Mechanism (PACM)”, there was agreement to allow transfer of credits from the earlier Clean Development Mechanism, also for afforestation and reforestation activities. But they must align with PACM methodologies and standards.
In short, carbon markets can now start to operate fully under the Paris Agreement.
While the outcomes of COP29, including the new finance goal, mitigation efforts, adaptation strategies, loss and damage arrangements, Just Transition Work Programme, and article 6 markets represent non-trivial incremental steps in addressing climate change, it is crucial to understand the processes and political dynamics that shaped these results. And what limited greater ambition, and more equity.
In the following, I reflect on the politics within the climate negotiations, and the broader context.
UAE Dialogue: Finance or follow-up
The UAE Dialogue was subject to fights, at the start and end of COP 29. The decision in Dubai on the first GST included two dialogues – one relating to NDCs, and the other on implementing the outcomes of the GST, in the finance section. The latter is called the “UAE Dialogue” after the United Arab Emirates.
The UAE Dialogue was contested in an agenda fight on the very first days of the Baku meeting. There were diverging views: was this dialogue about finance (as a contextual reading clearly suggests), or general follow-up?
Despite the latter not making sense, developed countries and some others insisted on “follow-up”, seeking to claw back a more extensive process – which had eluded agreement in Dubai. And at the very core was follow-up on the energy transition – and as explained above, that touches on fossil fuels.
The Arab Group was particularly determined in opposing this, since the GST outcome had unprecedented language on transitions away from fossil fuels. They argued that the task was to implement the GST outcome, not to send further new signals. At the start, heads of delegation agreed a footnote that allowed the agenda to be adopted. But the underlying tensions simmered on.
Long story short: There was no decision on UAE Dialogue. The diplomatic machinery to handle this issue seemed absent. The text proposed by the COP Presidency late in the second week pleased no one. The text was too weak on ambition for those who wanted it, while others did not want any further process at all. Debate will continue in 2025.
There was a seemingly simpler task, to tweak the GST process, but this eluded agreement as well. Parties had made good progress in getting close on text to address the timing of the technical and political components, and how IPCC reports would come into this – they will be too late for the start of GST2, in any scenario. In the last hours, the text was forwarded to June. An annual report on a GST dialogue related to NDCs was pushed to COP30 in Belém.
Overall, to what do these outcomes of COP29 amount? My view is that while the headline number of the new finance goal increases, in real terms the lack of finance ambition holds back the pace of the energy transition, compounded by the seeming disinterest by developed countries in concrete outcomes on just transitions.
We need mitigation aligned with global pathways consistent with 1.5°C, and that means we need finance commensurate with 1.5°C. In Baku, we got neither, and if that trend continues, indicators to track adaptation will show that our capacities will be exceeded, increasing losses and damages. In the end, it will be poor countries and communities that will pay the costs with their livelihoods, and even lives.
Politics determines outcome of negotiations
Taking a step back, what about the broader politics? A saying among negotiators goes that “politics determines negotiating outcomes, not the other way around”. And the political conjuncture in which COP29 happened was not favourable, to put it mildly.
During the “finance COP”, leaders of the G20 met in Brazil. But disappointingly, the G20’s signal on finance was weak, with finance ministers and heads of state of the largest economies not prioritising climate issues.
The result of the US election, just days before COP29, made any financial commitments from the US less credible. That means other developed countries would need to make up the difference – but they plead financial constraints.
The broader context is characterised by wars, with many countries, especially in Europe, increasing their spending on military very significantly. And there are trade wars, only just metaphorical, with severe tensions between the US and China, which complicate international cooperation.
International cooperation is unlikely to become easier during the second Donald Trump administration, which favours only MAGA loyalists and the very rich. And the US is not alone in being a highly divided society, nor in electing an authoritarian, populist leader.
It is not only about the US and China. The world is becoming increasingly multipolar, with the US losing its hegemony and no longer being the sole superpower.
China is growing in economic strength (eg, issuing a $2-billion bond in Saudi Arabia at rates comparable to the US Treasury). However, China has not yet stepped up to global leadership in climate negotiations, positioning itself as a developing country and aligning with more conservative voices.
Multilateralism – if not UNFCCC, then what?
The broader politics did not, then, facilitate an ambitious and equitable outcome from this last round of multilateral climate negotiations, COP29.
I have returned home from many COPs feeling ambivalent: far too little when thinking of what is required by science and equity; but some progress in terms of politics, the art of the possible.
Baku did not do enough, even in negotiating terms.
But should that lead us to declare the UNFCCC and its Paris Agreement a failure? Set up another process? My sense is not.
There is growing scepticism about how long the current COP process can continue without significant changes. I agree there’s a problem, but is there a credible, practicable alternative?
Climate negotiations are one of the few places where the multilateral rules-based regime still works. Sort of. And multilateralism is akin to democracy, in the sense of the saying: “It’s the worst possible system, until you think of all the others.”
The problem is not, to be more precise, thinking about an alternative. It is easy to write a paper about a better system (I’ve been among those who’ve tried).
It is, however, an entirely different matter to get all countries in the world to agree to participate in another. That alternative system would have to emerge in the same political conjuncture as described above.
My sense is that we need to fix the UNFCCC process and make it more operational. Baku was not a “big” COP. We need to try again in Brazil. DM
Harald Winkler works as a professor in the University of Cape Town’s School of Economics. He writes in his personal capacity.
https://www.youtube.com/watch?v=REeWvTRUpMk