Top story of the week: COP29 wraps up first week marked by negotiations on climate financing and rising political tensions
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As the first week of COP29 concludes in Baku, Azerbaijan, reaching an agreement on climate financing remains the conference’s primary objective. This aim, however, has been overshadowed by political tensions, including Argentina and France cancelling or reducing their participation. Argentina’s withdrawal followed orders from its president, Javier Milei, reportedly spurred by Donald Trump’s return to the White House and the mutual backing of scepticism on the climate negotiations between the two administrations, while France scaled back its involvement following a diplomatic clash with Azerbaijan’s President Ilham Aliyev, who accused France of neocolonialism in its overseas territories. Criticism has also intensified regarding the prominent presence of fossil fuel lobbyists at the summit, amid the growing urgency highlighted in the World Meteorological Organisation’s State of the Climate report, released at the start of the conference and indicating that the period from 2015 to 2024 is on track to be the warmest decade on record, characterised by accelerating sea-level rise, ocean warming, and glacial melt.
Little progress was made during the first seven days of negotiations, particularly on defining a new collective quantified goal (NCQG)—a target for financial support from developed countries to fund developing countries’ climate action, which will replace the $100 billion annual goal set in 2009 and expiring in 2025. Nonetheless, an agreement was reportedly reached on the first day of the conference regarding Article 6 of the Paris Agreement, which involves creating a global carbon market organised around two main elements: bilateral carbon trading and an international, UN-governed market. Despite previous conflicts on certain provisions resurfacing, and discussions expected to continue during the second week, negotiators have progressed on Article 6.4, focusing on the standards and methodology of the carbon crediting mechanism, raising hopes of a global agreement on this initiative.
Under Article 6, carbon credits, each equivalent to a tonne of CO2, would be generated by countries in line with their climate goals and made available for purchase by the private sector or polluting countries at market-determined prices. The revenue would be directed towards local clean energy projects, though many climate groups fear the emissions trading system could enable greenwashing by allowing polluters to continue emitting through credit purchases.
Meanwhile, climate finance negotiations on the NCQG are stalling, with observers fearing no agreement will be reached before the summit ends. Developing countries, in line with expert analyses, expect to secure at least $1.3 trillion per year to address the rising costs of the energy transition and the worsening effects of climate change. However, beyond the ongoing disagreements on funding amounts, COP29 participants are still debating which countries should shoulder the financial burden, with Western states keen to increase private investment involvement and share the responsibility with China and oil-rich Gulf nations, traditionally classified as developing countries and not expected to contribute. According to the Council of the EU, member states provided close to €36 billion in climate finance in 2023. However, climate finance mechanisms remain a point of contention, as developing countries seek more grants rather than loans to prevent increasing debt burdens.
On the sidelines of the conference, initiatives focused on nuclear energy and methane emissions reduction have garnered support. Nuclear power, in particular, appears to be one of the less contentious topics, uniting COP29 participants, with the nuclear alliance launched last year by France and the US gaining six new members, bringing the total to 31 countries. The European Commission has also launched the “Methane Abatement Partnership Roadmap” to further accelerate the reduction of methane emissions tied to fossil energy production and consumption.
Nationally Determined Contributions (NDCs)—five-year national climate plans under the Paris Agreement—remain a key topic, with hopes that the conference will inspire greater ambition ahead of the next round due in February 2025. The United Nations has deemed current plans insufficient, projecting only a 2.6% reduction in emissions by 2030 from 2019 levels, far below the 43% reduction recommended by the Intergovernmental Panel on Climate Change (IPCC). Significant work, therefore, remains before the conference concludes on 22 November.
