The UN climate summit got off to a good start when the parties assembled reached consensus on standards for the creation of carbon credits under Article 6 of the Paris Agreement. This is likely to enable climate action by increasing demand for carbon credits and ensure that the international carbon market operates with integrity under UN supervision. ‘This will be a game-changing tool to direct resources to the developing world. Following years of stalemate, the breakthroughs in Baku have now begun,’ remarked COP29 President Mukhtar Babayev.

In a notable move, UK Prime Minister Keir Starmer flew into Baku to announce a stringent new climate goal. He said the UK will pledge to cut emissions by 81% compared with 1990 levels by 2035 – a target that is in line with the Climate Change Committee recommendation. This goal will be one of the first Nationally Determined Contributions (NDCs) to be unveiled at COP29.

There was a mood of ‘controlled anticipation’ when COP29 started on 11 November for scheduled finish on 22 November, hopefully encouraging growing climate-related ambitions among the 200 or so countries participating.

But this year, the mood is tempered by new President-Elect Trump’s oft-stated climate denials and his express intention to pull the US out of the Paris Agreement for a second time when he takes a seat at the Oval Office on 20 January 2025. He also plans to halt further green investment from public coffers where possible, while boosting fossil fuels. Indeed, Trump’s infamous call to ‘Drill, baby, drill!’ seems to herald a return to heavy fossil fuel exploitation in the US, an exit from global environmental diplomacy and a halt to further investment under the Inflation Reduction Act (IRA). However, despite calling efforts to boost green energy ‘a scam’, there is no doubt that renewable energy has gained a strong foothold in the US, with Republican states benefitting for nearly 60% of projects under the IRA. (See this weeks’ news).

What’s more, the International Energy Association reports that global investment in clean energy is currently rising at double the size of coal and gas in 2024. ‘So a new US Administration is unlikely to want to drive out this type of green investment to other, more eager countries,’ comments Research Fellow James Henderson, author of an Oxford Institute for Energy Studies (OEIS) report on the outlook for COP29.

He suggests that several key issues need to be addressed at COP29 ‘if there is to be any hope that the world can meet the target to keep post-industrial temperature rise to 1.5°C’. Indeed, there are indications that this temperature will be exceeded in 2024, according to McKinsey and other analysts.

Will wealthy nations stump up their cash?
First priority at Baku, located on the Caspian Sea in Central Asia between Russia and Iran, is to finalise the amount contributed by ‘developed countries’ in the period 2025–2029 under terms of the New Collective Quantified Goal (NCQG). The current contribution of £100bn per year (established in 2015 but only met since COP26 in Glasgow), is considered to be far too low. There is a call by ‘developing countries’ for a significant increase to a mouth-watering $1tn/y.

However, there is vocal criticism of the definition of ‘developing countries’, given that China, India and even Saudi Arabia are potential recipients of funds, rather than being wealthy contributors. The developing countries also suggest that much of the finance under terms of adaptation and mitigation measures should be provided as grants and preferential loans, to minimise the impact on balance sheets and support debt relief.

Secondly, there is demand to create a clear methodology (a new business model) for the operations of the Loss and Damage Fund that was established at COP28 in Dubai. Many developing countries have expressed scepticism about the level of funding to date, and definitions of who should provide and receive finance.

Although there have been commitments to greater ambition on mitigation in light of the global carbon stocktake demonstrated at COP28 last year, the current NDCs leave the world ‘well off track’ to meet climate targets. There is a call for urgent action to update the NDCs if there is to be any chance of limiting post-industrial temperature rise to 1.5°C.

Currently, over 140 countries have set net zero targets under NDCs, accounting for over 90% of global emissions. New NDCs must be submitted by early 2025. Prior to that, countries must submit Biennial Transparency Reports (BTRs) by the end of this year. The Azerbaijani Presidency intends to prioritise this process at COP29, to provide evidence of the progress or ‘lack of it’ towards meeting climate targets.

The previous COP28 in Dubai was considered to be a success, with a major commitment to triple renewable energy by 2030, to double energy efficiency and transition away from using fossil fuels in the energy system. Surprisingly, these initiatives are not listed on the official COP29 agenda. Henderson of OIES reckons: ‘They are bound to be brought up in discussions.’

Furthermore, there will be moves to reinforce commitments on methane reduction and measurement, reporting and verification, driven by NGOs and other lobby groups. But here again, there is no mention of methane emission reduction on the official COP29 agenda.

There will also be debate about the increasing need for ‘adaptation’ in the face of rising global temperatures and the impact on many parts of the globe.

Also on the financial front, there will be calls for major financiers like the World Bank, International Monetary Fund (IMF) and regional development banks to provide more accessible, cheaper finance, and structures to reduce private-sector risk in renewables. This would balance public-sector commitments in line with the NCQG, and private sector capital ‘to fill the finance gap in the developing world’, explains Henderson.

According to McKinsey, the magnitude of capital needed for the energy transition is $9.2tn/y to 2050. ‘That is 30% more than is allocated today,’ says analyst Anna Gronskog. ‘This will require massive collaboration amongst all the stakeholders.’

Who is attending COP29?
Despite the urgency, there is a worrying absence of world leaders attending COP29 this year. Key players including US President Biden, China’s Leader Xi Jinping, France’s President Emmanuel Macron, German Chancellor Olaf Schulz, India’s Prime Minister Narendra Modi and European Commission President Ursala van der Leyen are notable by their absence from what is tagged as the ‘world’s most important climate summit’.

One exception is UK Prime Minister Keir Starmer, who flew into Baku on day one to announce a stricter climate goal as an NDC.

In the light of the US election, climate change expert Professor Richard Klein told the BBC that he anticipates: ‘The US [impact] at COP29 is not just a lame duck, but a dead duck.’

What’s more, former UN Climate Change Chief Christiana Figures was of the opinion that: ‘The result from this US election will be a major blow to global climate change action.’

Time will tell.

‘The magnitude of capital needed for the energy transition is $9.2bn/y to 2050. That is 30% more than is allocated today. This will require massive collaboration amongst all the stakeholders.’ – McKinsey analyst Anna Gronskog

According to McKinsey analysts, ‘the world is only 10% of the way to deploying by 2050 what will be needed to address the climate and nature crises’. The ambition of COP29 is to address two mutually-reinforcing pillars: enhancing the commitment to national (carbon emission reduction) plans and transparency, while enabling concerted action when it comes to the role that finance plays.

Other pundits feel that COP29 is unlikely to be ‘groundbreaking’ given the pressure of wars in the Middle East and Ukraine, and global financial challenges. Many are of the opinion that next year’s COP30 in Brazil will offer far more progress.

Azerbaijan hasn’t covered itself in glory when it comes to green initiatives. There are precious few renewable developments. And the country plans to boost gas production up to a third over the next decade. Moreover, the BBC reported that Azerbaijan officials are ‘purportedly’ planning to use the climate conference to boost the country’s oil and gas investment opportunities.

What is the 'COP Troika’ and what difference will it make? 
Whatever happens, the establishment of the new 'COP Troika’ – United Arab Emirates (UAE), Azerbaijan and Brazil – is designed to make climate change initiatives more integrated from one COP to another. McKinsey analyst Vishal Agarwal maintains: ‘This is a pivotal moment trying to bring together the ambitions of the Global North with the Global South’, bearing in mind the three principal themes at COP29: adaptation, mitigation and finance.

‘Decisions at Baku could profoundly shape the climate trajectory and whether 1.5°C remains in reach,' says Cosima Cassel, Senior Policy Advisor at e3g. ‘The summit must show that money will flow to support 1.5°C-aligned transitions worldwide. Since COP28, we saw commitments to phase out fossil fuels and ambitious goals on tripling renewable energy capacity and doubling energy efficiency by 2030.’

‘Though there has been some progress, there are also a number of obstacles’, she remarks. On the positive side, Cassel sees some momentum this year building around international financial architecture reform, as well as the launch of country platforms to support a ‘just transition’.

But, on the downside, the rapid roll-out of renewables has somewhat slowed – with a rise in global CO₂ emissions. ‘The latest UN emissions gap report shows a stark gap between current emission reductions and what is needed to reach 1.5°C. So COP29 must deliver financial agreements that can enable tangible climate action and have alignment with the 1.5°C target,’ says Cassel.

She notes that it is 10 years since the Paris Agreement was signed, and also marks the year where countries are expected to submit updated NDCs. ‘The stakes at COP29 are high. We’ve seen a lot of extreme weather events in 2024, and there have been strained economies and increased global insecurity along with growing conflicts and trade tensions adding further instability.’

‘Nevertheless, early NDC submissions from key nations could set the bar for ambitions in 2025… hopefully showing progress on Dubai’s COP28 stocktake promises. COP29 is a critical moment for climate action,’ Cassel insists.

• Further reading: ‘Good COP or bad COP? – the EI’s perspective on COP28’. From the moment it was announced that COP28 would be hosted in the UAE, the event was destined to be controversial. But a major oil-producing nation holding the Presidency may ironically have helped secure one of the most significant outcomes of the UNFCCC’s three-decade history, according to EI President Juliet Davenport OBE HonFEI, and EI CEO Nick Wayth CEng FEI, who also reflect on the EI’s presence in Dubai and its role in making the outcomes a reality.
• A tax on the extraction of fossil fuels in the world’s richest advanced economies could raise $720bn by the end of the decade to support the world’s most vulnerable facing climate damages, according to a new report backed by over 100 climate organisations worldwide including Christian Aid, Greenpeace, Climate Action Network, Stamp Out Poverty and Power Shift Africa.