As the world gathers for COP29 in Baku, Azerbaijan, leaders face a defining challenge, securing a comprehensive climate finance strategy to mitigate the effects of a rapidly warming planet. Known as the “Finance COP,” the summit aims to replace the long-unmet $100 billion annual finance pledge made in 2009, recognizing that the needs of developing countries have surged. These nations now require as much as $500 billion to $1 trillion annually for climate resilience and mitigation. COP29 presents a critical opportunity to secure adequate, effective, and accessible climate finance for vulnerable regions.
At the core of COP29’s agenda is the New Collective Quantified Goal (NCQG) on climate finance, which will shape the financial support flowing from developed to developing nations. This seeks to provide the resources necessary for emission reductions, adaptation, and climate resilience. The summit will also focus on ensuring that the distribution of funds is not only scaled up but also predictable and accessible. Various mechanisms are under consideration, such as contributions from international financial institutions, the repurposing of harmful subsidies, and the establishment of new climate-related taxes and levies. These efforts are aimed at making climate finance more efficient and ensuring it reaches the communities most in need.
Another key issue at COP29 will be the commitment of nations to more ambitious climate targets. As countries prepare to update their Nationally Determined Contributions (NDCs) for 2025, there is pressure for clear, sector-specific goals, such as expanding clean energy, advancing sustainable agriculture, and reducing emissions from heavy industries. Central to these commitments will be the principle of a “just transition,” ensuring that the livelihoods of those most impacted by climate policies are protected. There will also be a focus on ensuring that vulnerable communities receive adequate support for climate adaptation.
In addition to setting ambitious targets, COP29 will emphasize accountability. While global leaders have made significant climate pledges in recent years, there is a growing call for transparency and tangible progress. Countries are expected to demonstrate concrete steps taken toward their commitments, particularly the energy and adaptation targets set at COP28. This accountability is critical for ensuring that climate action goes beyond promises and translates into measurable results.
A landmark agreement at COP28 brought into play the Loss and Damage Fund, which aims to support countries experiencing irreversible impact due to climate change. At COP29, the focus will be on operationalizing this fund and ensuring it provides timely and targeted assistance to vulnerable nations facing extreme weather events and rising sea levels. Alongside this, the Santiago Network will provide technical support to countries confronting escalating loss and damage.
COP29 will also explore new ways to finance the global climate transition. Given that government contributions are expected to cover only half of the $1 trillion needed annually, innovative financing mechanisms will be critical. One promising avenue is reforming international financial institutions like the World Bank and the IMF, enabling them to provide more accessible and affordable funding for green initiatives in developing countries. Another approach involves taxing the unprecedented profits of fossil fuel companies, with the revenue directed toward climate action. However, this faces strong opposition from both the companies and governments reliant on fossil fuel revenues.
Other options could include frequent flyer levies targeting high-emission air travel and shipping taxes aimed at reducing the pollution from international shipping. Wealth taxes on the ultra-rich, along with redirecting harmful fossil fuel subsidies, could also free up billions for climate financing. Though unpopular, these approaches would ensure that those most responsible for climate damage contribute to the solution.
As COP29 approaches, the urgency for bold action grows. Climate finance, ambitious emissions reductions, and innovative solutions such as carbon removal technologies will be at the forefront of discussions. The summit presents an opportunity not just to reaffirm commitments, but to turn promises into concrete action of the kind we have yet to see.
