As COP29 in Baku enters its second week, the conference, dubbed the “Finance COP,” has made key advances in carbon markets, financial commitments, and climate finance for developing nations. However, significant challenges remain, especially regarding the fair distribution of resources and the integration of nature-based solutions into the global climate strategy.
One of the major achievements of COP29’s first week was the endorsement of a global carbon market framework under Article 6 of the Paris Agreement. This framework aims to standardize and enhance the transparency of carbon markets, enabling countries to trade carbon credits to meet their Nationally Determined Contributions (NDCs). This agreement is considered a critical step toward a coordinated global emissions reduction strategy. Still, concerns over the risk of greenwashing remain, with some critics calling for stronger safeguards.
In addition to the carbon market progress, significant financial commitments were made, particularly by the UK and Brazil. The UK committed to reducing emissions by 81% by 2035, along with a £3 billion investment in nature-focused initiatives, including forest conservation. Brazil pledged to cut its emissions by 67% by 2035, potentially reducing up to 1.05 billion tons of CO₂. Brazil also launched a coalition advocating for climate action that respects indigenous rights, highlighting the importance of including indigenous perspectives in climate negotiations.
Despite these positive developments, the core issue of climate finance remains a source of division. Developing nations, especially those in the Global South, have voiced concerns over the slow pace of commitments. They have called for concrete financial targets that go beyond the existing $100 billion annual funding pledge made in 2009. The New Collective Quantified Goal (NCQG), intended to scale up climate finance, remains under negotiation. Countries like Bolivia have pushed for a target of $1 trillion per year to address the urgent adaptation and mitigation needs of developing nations.
Another key issue is the terms of climate finance, particularly the reliance on loans rather than grants. Emerging economies like India have expressed frustration over the rising debt burdens that loans impose on vulnerable nations. While multilateral development banks (MDBs) such as the World Bank have pledged to increase their climate finance commitments to $120 billion per year by 2030, many developing countries argue that wealthy nations must fulfill their obligations independently.
An unexpected development at COP29 was Afghanistan’s participation, despite the controversial rule of the Taliban. As one of the world’s most climate-vulnerable nations, Afghanistan is grappling with extreme displacement caused by climate impacts. The country’s presence at the summit highlights the urgency of cooperation and inclusive climate action.
As COP29 moves into its second week, there is growing pressure on wealthy nations to deliver on their climate finance promises. The highly anticipated “Nature Day,” which will focus on ecosystem preservation and biodiversity, could provide the push needed to integrate nature-based solutions into the broader climate agenda.
While challenges persist, there is cautious optimism for COP29’s second week. The summit has laid a foundation for progress, with significant advancements in carbon markets, financial commitments, and the growing recognition of indigenous rights in climate action. If the summit can resolve the financing issues and integrate nature-based solutions, it could mark a long awaited turning point in the global fight against climate change.
