COP29 likely to focus on a new, more ambitious climate finance goal

The 29th Conference of the Parties to the UN Framework Convention on Climate Change – COP29 – runs from 11 – 22 November in Baku[1]. It will be attended by a wide range of world leaders, NGOs and other stakeholders, and has been hailed by some as ‘The Finance COP’.

The outcome of the conference is unlikely to be felt by corporates and financial institutions immediately, but it can be a useful indicator of the outlook, legislation, regulation, guidance and finance likely to come forward in the climate space.

Look out for:

1. A focus on finance. Agreeing a 'New Collective Quantified Goal' (NCQG) on climate finance to address climate change will be COP29’s main focus. A previous goal of USD $100 billion per annum of climate finance provided by developed countries has been around since 2015. But the emerging consensus is that a more multi-layered goal is needed. A key point of tension will be who pays. The previous goal is based on who was in the OECD in 1992, but the world’s economies have changed a lot since then. The list of those paying may need to change too to ensure the goal’s effectiveness.  
    
2. Finalising the framework for carbon cooperation. Article 6 of the Paris Agreement sets out a framework for countries to cooperate on market and non-market approaches to achieve more on climate collectively. Some are already doing so on a bilateral basis. A lot of guidance has already been agreed, for example, on the creation of a new carbon market mechanism. COP29 may see the final touches being added to the system to ensure it is as credible and transparent as possible, and that it functions well.
    
3. Progress on mitigation, adaptation and the just transition. A number of working groups set up at previous COPs continue their work. A ‘good’ outcome from COP will see strong indications of progress from the mitigation, adaptation and just transition working groups. The forum for discussing mitigation remains highly contested, however, so it may be that progress on mitigation is made elsewhere. For example, as part of the discussions about countries’ updated climate pledges, or taking forward the work of the global stocktake from last year’s COP. 
    
4. Holding countries to account. Updated national climate pledges ('Nationally Determined Contributions') are expected, and will be scrutinised more closely under the Enhanced Transparency Framework (ETF). The ETF involves reporting by countries, expert review and multilateral review to give additional transparency, promote confidence and facilitate implementation. 
    
5. Inclusion of indigenous rights. The COP16 biodiversity summit saw progress being made on several topics, including the further inclusion of indigenous peoples and local communities in COP processes. The conference also saw some steps being taken towards further linking climate and nature. Indigenous rights have long been on the COP agenda, so additional progress may be made at COP29.
    
6. Political uncertainty. The full impact of the US Presidential election result remains to be seen, but Donald Trump has been clear about his feelings on international climate change cooperation, and the impending change of leadership may overshadow proceedings and undermine consensus.

Look out for our follow-up briefing once COP ends on the main impacts for companies and financial institutions.  

[1] COP29 Azerbaijan - United Nations Climate Change Conference