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With COP29 just a day away, anticipation builds as nations prepare to advance collective climate action. This year’s "Finance COP" in Baku, Azerbaijan, brings a sense of urgency as countries face key deadlines to strengthen their greenhouse gas reduction targets, known as Nationally Determined Contributions (NDCs). Leaders and stakeholders will focus on boosting ambitions and reaffirming past commitments, with a core emphasis on “enhancing ambition and enabling action.” Here are the key areas that are expected to be in the spotlight during the conference.
THE NEW CLIMATE FINANCE GOAL: CLOSING THE GAP
Since 2009, wealthy nations have promised to provide $100 billion each year to help developing countries manage climate impacts and adapt to environmental changes. However, this goal has repeatedly fallen short, exposing a large funding gap. At COP29, a new target—the New Collective Quantified Goal (NCQG)—will be set to replace the unmet $100 billion commitment, aiming to close this gap by increasing both public funding and private investment. The outcome could also impact the ambition of climate goals (NDCs) due from countries next year, particularly for developing nations that need clear financial support to confidently commit to stronger climate actions.
LOSS AND DAMAGE FUND: SUPPORTING THE MOST VULNERABLE
COP29 will also address the pressing issue of loss and damage—climate impacts that exceed communities’ ability to adapt. The Loss and Damage Fund aims to provide vital support for vulnerable nations facing severe climate effects. Initially established during the Warsaw Climate Conference in 2013, the fund has gained renewed focus since COP26 in Glasgow, which called for its operationalization. While roughly $700 million was pledged during COP28, this amount is insufficient compared to the estimated $580 billion in climate-related damages developing countries could encounter by 2030. At COP29, discussions will center on finalizing governance and funding arrangements to ensure effective delivery of support. Developed nations are expected to announce additional pledges to facilitate support for affected countries.
TRANSPARENCY: TRACKING CLIMATE ACTION AND FINANCE
COP29 will mark a significant step forward in implementing the Paris Agreement’s enhanced transparency framework, requiring countries to submit their first biennial transparency reports (BTRs) by the end of the year. These reports will provide comprehensive details on how nations are addressing climate change, including emissions reduction efforts and adaptation projects, as well as financial support mobilized and required. This initial round of reports will inform future NDCs and other climate decisions. Acknowledging the complexities involved, particularly for developing nations with limited experience in international reporting, the Azerbaijani presidency has launched the Baku Global Climate Transparency Platform to promote the importance of reporting and transparency while hosting workshops to aid in these efforts.
CARBON MARKETS: CREATING A GLOBAL COLLABORATION
Article 6 of the Paris Agreement allows countries to trade carbon credits as part of achieving their national climate goals. For instance, a country rich in tropical forests can sell credits to fund forest protection, with purchasing countries counting these emissions reductions toward their own NDC targets. However, the operational rules for these carbon markets are still being developed. Negotiators at COP29 will work to finalize these rules, which are essential to ensure that international carbon markets function effectively and do not undermine global emission reductions. Despite some progress made since COP28, several important issues remain unresolved, including the authorization process for carbon credits and how developing countries can participate in these markets.
As COP29 draws near, the focus is on climate finance, a crucial element in assisting countries to fulfill their climate obligations. The pressure is on to move beyond promises as leaders prepare to announce financial support that will enable ambitious climate action, particularly for vulnerable countries facing the harshest impacts of climate change. As this year's COP29 theme, “In Solidarity for a Green World,” highlights, the responsibility for a more green, livable world lies with every and all of us.
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