In just a month, global envoys will gather for COP29, the annual climate gathering meant to advance the goals of the 2015 Paris climate accord.
For the second straight year, the gathering will be held in a country largely financed by fossil fuels. Baku, Azerbaijan, is a city largely built on the oil industry, including famous gushers that exceeded even Texas’s. Last year’s COP was held in Dubai, capital of the United Arab Emirates, one of the world’s biggest oil producers.
The back-to-back climate gatherings in petrostates has the climate cognoscenti fretting.
Azerbaijan is increasing its fossil fuel production and has ditched its 2030 emissions reduction targets. It is one of just a few countries that has actually decreased its Nationally Determined Contributions, or NDCs — a key measure of country level alignment with Paris goals.
The former Soviet state has also made headlines recently for imprisoning opposition leaders and journalists.
As a result, the official delegations may be lonelier this year. Many of the civil society climate advocates and initiatives that historically have flocked to the COP plan to skip it this year. Instead, they are awaiting the potentially more consequential COP30 next year in Belém, Brazil, where proximity to the Amazon will underscore the need for action and countries’ NDCs will be finalized.
But the agenda for Baku, dubbed “the finance COP,” is anything but trivial.
“COP29 it’s not a write off,” Katherine Stodulka of Systemiq tells ImpactAlpha. “It is an absolute wasted opportunity if we’re missing engagement around COP29 and around that new target for climate finance.”
“We are letting Brazil down when they take over the presidency if we don’t further the agenda in Baku,” she said.
Collective Quantified Goal
In Baku, countries are expected to deliver stepped up their self-set Nationally Determined Contributions. In addition, they will set a new target for climate aid to emerging markets — in bureaucrat-speak, a New Collective Quantified Goal on Climate Finance, or NCQG. The target will update the arbitrarily chosen, and still unfulfilled, goal of funneling $100 billion to emerging markets for climate mitigation and adaptation.
And negotiators will hammer out the details to make good on last year’s pledges, including a “transition away” from fossil fuels, a tripling of renewable energy by 2030, a doubling of adaptation finance by next year, and operationalizing a “loss and damage” fund.
The climate gathering comes at a critical time for global climate action. Conflicts in Ukraine and now the Middle East have heightened the emphasis on energy security, giving cover to fossil fuel producers in the US, as well as Azerbaijan, to expand their production.
The continued accumulation of greenhouse gasses is intensifying storms and droughts and upending lives and livelihoods, particularly in less wealthy nations that have contributed little to global emissions.
Yet financing to help those countries adapt to and mitigate climate change has slowed; Africa, a continent on the front lines of climate change, even sees a net outflow of funds due to its debt service payments to the Global North. Emerging market leaders grumble that much of the climate funding is simply a relabeling of already-committed aid.
“A breakthrough on climate finance is desperately needed at COP29,” wrote Bilal Anwar of Pakistan’s National Disaster and Risk Management Fund in a recent essay.
Just six years away from the crucial 2030 milestone, the world is woefully behind on climate progress and the broader Sustainable Development Goals. An estimated additional $1.8 trillion annually is needed to address the climate crisis and nature-related investments in developing countries.
“The level of financing which is made available, [and] which countries will have access and on what terms, are issues of survival for millions of people and for the well-being of our planet,” reads the new Bridgetown 3.0 manifesto, which has been crafted by Barbados and less developed countries to spur the reform of global financing mechanisms.
Azerbaijan has a difficult task ahead of it. The Baku agenda is essentially “laying the groundwork for the whole finance architecture of Paris for the next decade or more,” says Alden Meyer of consultancy E3G.
Global leadership
Global leaders are scrambling to shape the climate agenda at a series of meetings ahead of COP29. Last month, halting progress was made at the United Nations General Assembly in New York, where climate action was overshadowed by geopolitical concerns (the adjacent Climate Week NYC featured some 900 events focused on everything from climate tech to nature-based solutions).
“Coming out of New York, there’s just enough reinforcement for previous commitments and momentum to send the signal that the COP28 energy package is still alive,” said E3G’s Leo Roberts said at a post-UNGA briefing. “But there is a worrying lack of coordinated political leadership.”
Leaders will get another chance at World Bank and G20 meetings taking place the week of Oct. 21. Hanging over all the proceedings: a looming US election in early November that could upend global climate progress.
Here are a few things we are watching:
Rising power of the Global South
Brazil’s leadership of the G20 this year and its hosting of COP30 next year have put a spotlight on the Amazonian nation and the plight of less developed countries that bear the brunt of a changing climate they did little to bring about.
Brazil’s Luiz Lula de Silva, along with Mia Mottley of Barbados, who last month took the helm of the V20 — a group of 68 climate vulnerable developing countries — are putting the concerns of the Global South front and center. Next year, South Africa takes over the G20 presidency.
“We believe that developing countries must be given a stronger voice and more effective representation in the government structures of the international development financial institutions,” said Mottley at a Climate Week event hosted by Project Syndicate.
The coalition is laying the groundwork for major reforms to the global financial architecture, including better borrowing terms for middle as well as low-income nations, more meaningful development finance reforms, and a bigger say in global decision making.
Proposals for carbon taxes on aviation and shipping, and perhaps on billionaires, are gaining momentum ahead of COP30. A global air and shipping fuel tax could raise up to $200 billion a year in revenues by 2035, tripling current global climate finance, according to the IMF.
“The conditions for accessing financial resources remain prohibitive for most low- and middle-income countries,” Lula said in addressing the UNGA last month. Debt burdens limit the ability of countries to invest in health, education, climate action and other priorities, he said, noting that African nations borrow at rates up to eight times higher than Germany and four times higher than the US.
“It is a reverse Marshall Plan, in which the poorest finance the richest,” he said.
At the UN meeting, Mottley unveiled a third iteration of her Bridgetown initiative for reforming the global financial system. It calls for the World Bank and other finance providers to go beyond income considerations to include climate vulnerability, natural capital and conservation needs in their criteria for allocating concessional finance.
The plan also urges the IMF to issue at least $650 billion in Special Drawing Rights, a form of international reserve assets that can help tide countries over during rough patches, to expand the balance sheets of multilateral development banks to support climate action and the SDGs.
“If not, the countries that least need it will end up getting the majority, as has happened before,” said Mottley.
In addition to replenishing existing vehicles, such as the Green Climate Fund and disaster funds, Bridgetown 3.0 calls for multilateral development banks to provide $300 billion a year in affordable, long term financing – ranging from 30 to 50 years – for the SDGs and climate adaptation, and to mobilize at least $500 billion annually in private capital.
“We need the political will,” summed up Mottley. “Nothing more, nothing less.”
Nature and biodiversity
Even before COP29 gets underway in Baku, a parallel “biodiversity COP,” or Convention on Biological Diversity, will take place in Cali, Colombia. There, discussion will center on advancing the Kunming-Montreal Global Biodiversity Framework, an agreement forged in 2022 that is akin to the 2015 Paris accord on climate, including individual country biodiversity strategies and action plans.
The separate tracks for climate and nature, as well as a third “COP” aimed at halting desertification, are beginning to merge. Colombia’s environment minister, Susana Muhamad, has called for a unified pledge that brings together the three interconnected themes.
Colombia’s leftist leader, Gustavo Petro, has said that biodiversity underpins the country’s economic future. “Biodiversity, in my opinion, is the source of our new wealth and Colombia could attain it,” said at last year’s COP28.
The South American country is one of the most prominent signatories to a fossil fuel non-proliferation treaty.
Similarly, under Brazil’s leadership, COP30 is expected to emphasize nature and biodiversity. Since Lula became president last year, Brazil’s deforestation rate has been cut in half.
The heavily forested country is promoting a Tropical Forests Forever Facility, a targeted $125 billion fund to pay nations to protect and restore their forests. The fund would be seeded with $25 billion from governments and philanthropies — a tall order, to be sure — to crowd in another $100 billion in private capital.
The money would be invested, and the proceeds used to repay private investors a modest fixed return; the rest of the proceeds would go towards paying developing nations for their intact tropical forests.
Country platforms
At COP27 in Glasgow, Scotland, “Just Energy Transition Partnerships” were launched with much fanfare as a way to help coal-dependent countries transition from fossil fuels. Multi-billion dollar packages were announced for South Africa, Indonesia, Vietnam and Senegal.
Little progress has been made as the JETPs, as they’re called, have gotten bogged down in the messy realities of implementation.
The updated twist: country platforms.
The new approach puts the transitioning countries in the driver’s seat and prioritizes up front planning and building project pipelines to streamline the process and drive success.
With JETPs, “we had these very big announcements, but perhaps not the amount of legwork done beforehand to bring different players to the table, including private financiers,” said E3G’s Laura Sabogal Reyes at the firm’s recent briefing. “The push is to really roll out next generation country platforms.”
One example: Colombia’s donor-backed initiative to mobilize some $40 billion in public and private finance to transition from fossil fuels and invest in the development of ecotourism, sustainable agriculture and nature restoration. Muhamad announced the investment plan at Climate Week last month.
“Colombia is very much charting its decarbonization and resilience trajectory,” said Sabogal Reyes. The country, she added, is “creating investment plans and detailed projects” that can be matched with relevant funders.
“It’s building on the experience of the JETP, but very much from a perspective of preparing the pipeline of projects that is required and approaching it in a holistic way.”