This year’s COP29 in Baku, in the wake of US elections, broader geopolitical tensions, and an accelerating climate crisis, will be a litmus test for the Paris Agreement. Typically, even the most ambitious countries look to the EU for steady and effective leadership, but there’s a risk their expectations surpass what the EU ultimately delivers this year. EU countries can take three critical steps in Baku to remain an ambitious climate leader.
EU countries have a clear interest in maintaining climate leadership. As the fastest-warming continent, supporting emissions reductions abroad is less costly and more effective at keeping Europeans safe in the long-run than merely attempting to adapt to increasingly devastating events, such as the recent floods in Spain. Economic think tank Bruegel, for example, estimates that the benefits to Europeans of fully funding coal phase-outs in emerging and developing economies could respectively double and triple the investment costs.
Accelerating climate action abroad also strengthens the EU’s security. It reduces unfair competition from high carbon producers, opens new markets for EU clean companies, diversifies critical clean supply chains, and improves the resilience of vulnerable fossil fuel producers in neighbouring regions.
The EU needs the Paris Agreement and a successful COP in Baku to yield further economic and security benefits and maintain its credibility as a trusted partner with third countries. The EU has a strong track record as a global climate leader, demonstrated by its key role in negotiating last year’s global energy targets within the First Global Stocktake (GST) at COP28 in Dubai.
However, there is a risk this year that the bloc might not pay adequate attention to COP29. Several European heads of states and governments may not speak during COP29’s opening leaders’ segment – and ‘climate-progressive’ Macron is not expected to attend.
In Baku, countries will primarily focus on reaching an agreement on a new climate finance goal (NCQG), intended to replace the $100 billion target set 15 years ago in Copenhagen to support climate action in developing countries. This target remains a central pillar of the political compromise underpinning the Paris Agreement and will be critical in raising the ambition of developing countries in 2025.
EU governments need to recognise that COP29 is not just a technical negotiation but an endurance test of their climate leadership. EU leaders and ministers who attend COP29 can step up their leadership by:
- Collaborating with the most vulnerable countries to achieve an ambitious finance outcome.
- Demonstrating their ongoing commitment to climate action including through signals around the adoption of their next Nationally Determined Contribution (NDC).
- Building a coalition to uphold the Outcomes of the First Global Stocktake.
The world’s hopes for an ambitious agreement on the NCQG will rest on the EU – the largest provider of climate finance internationally. Climate finance supports developing countries in their climate transitions. It is a central pillar of the political compromise that sustains the Paris Agreement and will be critical for raising the ambition of developing countries’ next round of climate targets (NDCs), due to be adopted in 2025.
However, EU countries have so far adopted a defensive position in the negotiations due to their shrinking public budgets from economic constraints and the end of COVID-19 recovery funds. Far-right factions advocate cutting development finance funds altogether, even as the needs of developing countries continue to grow.
EU finance ministers have thus made finding more contributors a “prerequisite” for achieving an ambitious NCQG, a position shared by the European Parliament. China and other emerging economies consider this an attempt to renegotiate the Paris Agreement.
To secure an ambitious NCQG, the EU must first reassure their least developed and vulnerable partners of its commitment to fully deliver on the $100 billion goal and to increase their financial provisions under the NCQG. Leading member states like Germany have sent concerning signals in this regard, while far-right governments in Italy and the Netherlands may not fulfil their commitments. Also, the negotiations on the next EU budget will not begin until next summer. Therefore, it is crucial for climate-ambitious countries like France, Spain or the Nordics to step up and increase their contributions.
The EU will also need to find a diplomatic compromise with China and other emerging economies over new climate finance contributions. EU finance and climate ministers have acknowledged that some developing countries already provide and mobilise significant climate finance. WRI analysis shows China provided $4.5 billion per year through various channels over 2013-2022, equivalent to roughly 6% of finance from developed countries. Recognising and encouraging existing climate finance from leading emerging economies may offer a path to compromise.
This year’s EU elections resulted in a viable majority supportive of the Green Deal. Re-elected President von der Leyen has vowed to maintain the EU’s climate neutrality target and has tasked her new team with presenting a 90% net reductions target by 2040 in line with independent scientific advice. EU climate ministers welcomed and took note of such a proposal as the basis for a new NDC that strengthens the EU’s leadership.
However, this level of ambition has not been recognised externally. International reports of a popular backlash against the Green Deal and uncertainty over how and when the EU will agree to a new climate target have taken root.
EU leaders can showcase their climate ambition by pointing to an 8.3% decrease of EU emissions in 2023, the greatest annual drop in EU emissions in decades. Going forward, the EU needs half of such annual reduction in average to achieve its 2030 target.
Moreover, leaders from Germany, France, Spain and the Nordics can articulate their support at COP29 for an ambitious 2040 target and a quick NDC adoption in the first semester of 2025.
At COP28 in Dubai, the EU was a chief architect of an agreement within the first GST to end the fossil fuel era, reform multilateral development banks, and work towards a systemic approach to resilience. This was a positive step towards keeping a 1.5oC scenario alive. EU leadership remains crucial to counter any attempts to backtrack on the GST outcomes in Baku.
EU leaders and ministers can rally the High Ambition Coalition around the consensus built at COP28 by building confidence in the feasibility of the GST outcomes.
To do so, EU leaders can first build on the clear signs of emissions decoupling in the EU to highlight how the governance underpinning the Green Deal enables a fast and just transition to a 1.5 oC -aligned world. The EU has cut its emissions by 37% since 1990 while growing its GDP by 68%.
They can also clarify how the EU will contribute to the landmark energy goals of transitioning away from fossil fuels, tripling renewable energy and doubling energy efficiency. While achieving the current 2030 targets is critical, EU leaders can better communicate the implications of a quicker-than-expected energy transition in terms of phasing out fossil fuels.
Tragic events such as the recent floods in Spain have intensified EU plans to scale up domestic adaptation efforts. The EU should accompany these with further commitments to finance systemic resilience abroad, including via a new Pact for the Mediterranean.
Moreover, EU leaders must continue making strong calls for reforming international systems across the financial, trade and macroeconomic architecture – particularly at the G20 Summit in Brazil.
The EU needs a successful COP in Baku to yield further economic and security benefits. A positive COP29 outcome is also critical to avoid a collapse of the Paris Agreement, one of the few remaining pillars of multilateral cooperation. EU governments must recognise that this year’s COP is not just a technical negotiation, but a critical opportunity to remain a global climate leader.
