Azerbaijan is set to welcome delegates to Baku for COP29 in less than two weeks. Dubbed the “Finance COP,” this summit will negotiate a new collective quantified goal for climate finance (NCQG). This financial target will support developing countries in their transition to a climate-resilient future and to align their transition pathways with the Paris Agreement’s 1.5°C target.
Beyond the NCQG, COP29 will set in motion many other efforts and agreements needed to move forward on climate action. 2025 will mark a critical moment for climate ambition, as all countries are expected to submit updated Nationally Determined Contributions (NDCs) or national climate action plans. COP29 will need to see early NDC submissions from leading countries, setting the bar for ambition through clear plans for mitigation (including phasing out fossil fuels), adaptation, and a just transition.
Therefore, concrete progress – both on finance and early NDC signals- at COP29 is essential to lay the groundwork for a successful 2025. This is necessary to show that 1.5°C remains within reach and that the most catastrophic impacts of climate change will be avoided.
The stakes are high, and so are the challenges. COP29 will take place against a backdrop of unprecedented global turbulence. In 2024, extreme weather events, from devastating floods to record-breaking heatwaves, have strained economies and exacerbated insecurity. Geopolitical divisions run deep, with conflicts in the Middle East, Russia’s ongoing war in Ukraine, and mounting tensions across critical issues like trade creating a highly volatile international landscape. The upcoming US election outcome – scheduled just days before COP29 – is distracting political attention and could significantly impact the COP negotiations.
Below, we outline the outcomes necessary, despite these challenges, to stay on track and support delivery of the ambition needed in 2025.
The NCQG will be the centrepiece of negotiations at COP29. It must be ambitious enough to build confidence among developing countries that the Paris Agreement can be financed, including through increased support for climate-resilient and 1.5°C aligned transitions. Despite some recent progress on the structure of the goal, negotiations are at an impasse just days away from Baku. Countries remain far apart on the level of the goal, as well as which finance should counted, and who should pay in. To reach agreement at COP29, we must see political leadership from individual countries, as well as from the Azeri Presidency, to make bridge-building proposals.
A successful NCQG will need to combine increased public support (‘provision’) with a wider vision for how finance can be mobilised at scale. Delivery of an ambitious goal will require international financial architecture reforms such as those discussed at the recent G20 Finance Ministers and WB/IMF Annual Meetings . Bringing these international discussions together could involve setting a near-term 2030 target alongside a more aspirational target to address long-term global needs, contingent on collective international actions beyond the UNFCCC process. This could build trust now, while also sustaining momentum for the system reforms required for future financing needs.
Leaders of developed economies should both enhance their own climate finance pledges, and push others to do the same. Any perception of backtracking on finance would undermine their credibility as trusted partners, and the negotiations as a whole.
This briefing lays out the changes needed to reform of the international financial system: IFA reform explained: The key to financing climate safety – E3G
COP29 initiates the deadline period for countries to submit new NDCs (9-12 months before COP30) and will be a key moment for first mover countries to set the bar on ambition by coming in early to submit ambitious NDCs. This round of NDCs will set the course for countries’ updated 2030 targets and new 2035 ones. Both the scale and pace of the actions countries decide to take on climate in the next five years will determine whether the 1.5°C agenda can be kept alive.
The Troika of COP presidencies (the UAE, Azerbaijan and Brazil) have launched an initiative on NDC Ambition, promising to each submit NDCs in line with 1.5°C. These countries, along with others such as the UK, must use COP29 to do so. Greater surround sound on delivering ambitious NDCs is also necessary from major economies such as US, EU, China, Australia, Japan, Canada and South Africa, among others.
To be 1.5°C aligned, NDCs must be economy-wide, embed the decision to transition away from fossil fuels by demonstrating cuts to both supply and demand; and incorporate the COP28 Global Stocktake pledges of tripling renewable capacity and doubling energy efficiency.
To make targets meaningful, they must be closely linked to clear and robust national transition plans for mitigation and adaptation. This will help unlock both public and private investment and enable delivery of commitments, for example via country platforms designed to coordinate and mobilise domestic and international investment into resilient national transitions. New NDCs must be ‘investible’ – to provide concrete time-bound information supporting investment decisions – and that they are fully aligned with other national plans and policies.
As climate change brings more frequent and severe weather events, adapting to its impacts is increasingly urgent. Developed country leaders should use COP29 to announce grant finance for adaptation in vulnerable countries. Such announcements would help build confidence and trust between countries, adding momentum to negotiations and supporting an ambitious NCQG outcome.
The appointment of a ministerial pair (Ireland and Costa Rica) to drive the adaptation agenda is a positive signal – they must now work alongside the Presidency to secure appropriate inclusion of adaptation within the NCQG. They should also address the challenges countries have accessing adaptation finance, for example, by simplifying application and reporting processes, and ensuring direct access for local stakeholders. The Report on Doubling the Adaptation Finance Goal, due ahead of COP29, will be a crucial opportunity to signal progress and identify gaps in funding flows.
We explore further how COP can deliver for adaptation and resilience here.
COP28 saw political leaders agree for the first time that meeting the goals of the Paris Agreement requires a transition away from fossil fuels. At COP29 leaders must build on this momentum by demonstrating that targets are translating into concrete action on the COP28 energy goals (tripling renewables capacity and doubling energy efficiency by 2030, phasing down coal, and transitioning away from all fossil fuels).
OECD countries must demonstrate leadership by signaling their intent to reflect the full set of COP28 GST energy goals in NDC commitments. That means equal action both on scaling up clean energy and on phasing out fossil fuel consumption and production.
COP29 also presents an opportunity to progress on renewables scale-up and fossil fuel phase-out through increased commitments. Sign-ups to global pledges, such as No New Coal; and alliances, such as the Powering Past Coal and Beyond Oil and Gas Alliance, can drive momentum on energy transition outside of the negotiation rooms.
Finally, COP29 must see a concerted push to increase the scale and availability of energy transition finance. International partnerships such as the Just Energy Transition Partnerships and emerging country platforms must deliver new and better-quality finance and investments. Initiatives such as the UK’s new Global Clean Power Alliance, Energy Transition Council, and the Clean Energy Transition Partnership can help unlock financial and technical support for the delivery of ambitious, just clean energy transitions.
Our blog on energy, and our briefing on the action framework for Transition Away From Fossil Fuels explores this in more detail.
Brazil will take over the COP Presidency after Azerbaijan. As President of both G20 this year and COP30 next year, it has a key role to play in laying the groundwork for maximum climate ambition in 2025 and a transformative COP30 in Belém. It must use this opportunity to set out its vision and strategy, enabling ambition on delivering the global transition and laying groundwork for what will come next year.
The G20 Leaders’ Summit in Rio will take place in the second week of COP. G20 Leaders must ensure that their meeting serves as a catalyst for a strong COP outcome, by generating political and financial attention and momentum around the final days of negotiations in Baku.
All world leaders must use COP29 to elevate the importance and criticality of finding solutions to the climate crisis, in particular, to make concrete pledges around adaptation, show NDC ambition and delivery of fossil fuel phase-out as outlined above. To agree on a new finance goal, it is crucial that leaders recommit their standing commitments on international climate finance, particularly progressive leaders such as the UK, the EU or Germany. This can create the trust needed to support pathways for ambitious transition pathways and support adaptation and loss and damage.
