COP29 Concludes with Goal to Increase Climate Finance to $300 Billion Annually

The COP29 climate conference in Baku, Azerbaijan, concluded after two weeks of intense negotiations with a deal to triple climate change-related finance flows to developing countries to $300 billion yearly over the next ten years, as well as notable advancements in the creation of global carbon markets.

However, developing countries vehemently attacked the climate financing objective as being insufficient despite the conference’s actions, with India’s ambassador stating that “we are extremely, extremely disappointed” with the accord.

The establishment of a New Collective Quantified Goal on Climate Finance (NCQG), which aims to align global financial flows with the goals of the Paris Agreement, was one of the conference’s main outcomes. Countries agreed that by 2035, climate financing for developing countries should reach at least $1.3 trillion annually. Although it said that it would involve “the scaling up of financing to developing country Parties for climate action from all public and private sources,” the language was ambiguous about the sources of this funding.

By 2035, the agreement’s broader ambition called for industrialized nations to raise at least $300 billion for developing nations from “a wide variety of sources,” including “public and private, bilateral and multilateral.” This would be a major boost to climate funding for developing countries, which was first set at $100 billion by 2020 in 2009 and then extended to 2025 by the 2015 Paris Agreement. According to OECD projections, annual climate finance mobilization reached $83 billion by 2020.

A final agreement on Article 6 of the Paris Agreement, which aims to create high integrity carbon markets, was another significant outcome of COP29. This came after an initial breakthrough on establishing standards for a centralized international carbon market during the first few days of the conference. The conference concluded with an agreement on “Article 6.2,” or country-to-country carbon market trading, which outlines how nations will permit the trade of carbon credits and the functioning of registries that track this trading.

While acknowledging that there are still issues with maintaining market integrity, environmental organizations applauded the deal on carbon markets.