+++ Table.Alert +++ COP29: The most important results + New financial target + Article 6 adopted

COP29: The most important results

By

The COP29 in Baku ended early on Sunday morning with a delay of more than 30 hours and a bundle of decisions. In the final days, which were sometimes chaotic, the conference was on the brink of collapse because many groups of countries felt they had not been considered. Many groups of negotiators strongly criticized the leadership of COP29 President Mukhtar Babayev because the process often lacked transparency and cooperation.

But when Babayev dropped the gavel early in the morning local time, these were the most important decisions of COP29:

Financial target NCQG

A new NCQG financial target: By 2035, industrialized countries are to raise at least USD 300 billion annually from private and public funds for developing countries. By 2035, a total of USD 1.3 trillion in climate finance should also flow every year. This includes the USD 300 billion, private investments, flows from the multilateral development banks (MDBs), and innovative mechanisms such as new levies.
To plan and review this process, a “Baku to Belém Roadmap” is to be established, which describes the growth to the mentioned 1.3 trillion by 2035.
The donor base for climate finance will be expanded beyond the industrialized countries: Emerging economies such as China, South Korea, the Gulf States, and Singapore can voluntarily define their share of the MDBs’ climate funds as climate aid. They can also have their South-South aid counted towards the joint climate target of at least 1.3 trillion.
However, Cuba, Bolivia, Nigeria and, above all, India loudly objected to the adoption of the NCQG at the meeting, to the applause of many observers in the room.

Emission reduction

The area of “mitigation” was particularly important to the industrialized countries, AOSIS, AILAC and LDC countries – but experienced strong resistance from the oil states led by Saudi Arabia. The corresponding GST resolutions from COP28 in Dubai (“transitioning away from fossil fuels“) were partially deleted from the texts and had to be laboriously written back in. There was no mention of the GST results in the mitigation work program of COP26.

To this end, “Dubai” should be anchored in the “UAE Dialogue“, which deals with the implementation of the Global Stocktake. The results of the COP28 Global Stocktake in Dubai are generally reaffirmed right at the beginning: These are tripling renewables, doubling energy efficiency and moving away from fossil fuels, the famous “transitioning away”.

However, this term itself was not found in this document. It was only referred to in paragraph 14 concerning paragraph 28 of the Dubai GST decision. One paragraph later, however, “transitional fuels” are explicitly mentioned – i.e. support for gas. There is also a rejection of “unilateral trade measures” such as the EU’s CBAM.

However, instead of being adopted as planned, the UAE Dialogue was postponed following objections from South American and EIG countries. It is now to be negotiated further at the SBSTA meetings in Bonn in June.

Adjustment, loss and damage

The global adaptation target was also only advanced with difficulty in Baku. To make it more concrete, a maximum of 100 indicators are now being targeted: All states are to undertake adaptation measures in certain key areas (for example the health sector, food, water). This also includes financial criteria. However, only procedural progress has been made. In terms of content, the work must be done by the conference in Belém.

In the area of finance, adaptation is mentioned in a separate paragraph, so there is a link to the NCQG, says Laura Schäfer from Germanwatch: According to the NCQG text, financing is to be “dramatically increased” and there is a high demand for grants and heavily discounted loans in this area. A “balance between adaptation and mitigation” is also being sought in the funding. The distributions from the funds that also deal with adaptation are to be tripled.

The topic of “Loss and Damage”, on the other hand, has disappeared from the financial text. The text recognizes that there are “significant gaps in the response to the increased scale and frequency of loss and damage”. But it contains no call to action or commitment to provide funding. The Loss and Damage Fund is only very indirectly seen as part of the UNFCCC climate finance mechanism, similar to the Green Climate Fund. It is clear from all the texts that the topic is being handled very delicately.

Article 6

After nine years of intensive negotiations, rules and standards for trading emission reduction credits under Article 6 of the Paris Agreement were agreed in Baku. The agreement was only possible because the European Union gave up a years-long blockade with which it wanted to prevent weak transparency and greenwashing by the carbon markets.

Gender

Hardly any progress was made on the topic of gender in Baku; instead, regression was prevented. The Lima Action Program of 2024 was extended by ten years. Next year at SB62 in Bonn, the development of a gender action plan is now to begin. However, a coalition of Saudi Arabia, Russia and the Vatican in particular rejected the new wording in many places, which was to be redesigned to be gender-inclusive.

NCQG adopted: USD 300 billion and a roadmap to Belém

Demanding “trillions, not billions” for the Global South: protesters at COP29.

By

Lukas Knigge

It took a walk-out by the island states (AOSIS) and the least developed countries (LDCs) to reach an agreement in Baku after all. Both left the negotiating room in protest on Saturday afternoon. The Azerbaijani COP29 presidency had left both groups of states out of the negotiations on the new climate finance target (NCQG) before presenting a first real draft text on Friday.

Subsequently, there was movement in the conference rooms. Europe, the most vulnerable states and the Presidency negotiated a new text behind closed doors, which, apart from a few changes, corresponded to the final text. The final agreement includes the following points:

There was still room for maneuver when it came to the amount (“quantum”) of the NCQG: The new climate financing target is now “at least” USD 300 billion – with the industrialized countries “in the lead”. In the previous draft, there had been talk of USD 250 billion. Bi- and multilateral donors from the public and private sectors are providing the funds for this core target. It is unclear to what extent the new target has improved on the previous target of USD 100 billion per year. If inflation up to 2035 and the expanded donor base are factored out, the contribution is unlikely to lead to a significantly higher commitment for industrialized nations.
The expanded donor base also includes contributions to climate finance from multilateral development banks. It is “recognized” that they contribute to the climate finance target “voluntarily”. In addition, developing countries can also voluntarily provide so-called South-South support, which would also contribute to the target.
The “Baku to Belém Roadmap to 1.3T” is intended to define the process for aligning the global financial system to bring total climate finance from all sources to at least USD 1.3 trillion by 2035. According to information obtained by Table.Briefings, the process could start as early as next year’s Petersberg Climate Dialogue, under the supervision of the COP presidencies in Baku and Belém. The development of minimum allocations, particularly for least developed countries and small island states, has been discussed for this process in the meantime, but is no longer included in the agreed text.
Quality: It is “recognized” that “grants” and “(highly) concessional loans” are “needed” in the areas of adaptation and Loss and Damage – a demand from the island states and least developed countries. However, there is no concrete figure in the text as to how large the share of the core objective should be made up of grants and concessional loans. However, development banks and their stakeholders are “invited” to provide more highly concessional loans.
What should the money be used for? The core objective only covers mitigation and adaptation. As in the Paris Agreement, a “balance” is to be achieved between the two areas. There is no specific sub-goal for adaptation. However, public spending on various funds to support developing countries (including the Adaptation Fund) is to be “at least tripled” by 2030 at the latest. However, some of the funds are severely underfunded. A tripling would not mean significant new resources. However, losses and damages are not mentioned in the core objective.
Review: The NCQG will be reviewed in 2030.

India rejects – without consequences

Once the applause for the historic agreement on the climate finance target had died down, critics of the deal were quick to speak out. Cuba and Bolivia attacked the target of USD 300 billion in particular as being too low. India’s negotiator Chandni Raina made it clear that she did not accept the result and rejected it – but only after COP President Mukhtar Babayev had dropped the gavel to accept the NCQG. India’s request to speak is thus recorded in the meeting minutes but has no effect. The NCQG remains adopted.

Raina complained that the presidency did not allow any requests to speak but immediately dropped the gavel. The usual question from the Presidency as to whether there were any objections failed to materialize. The document was nothing more than an optical illusion, Raina sharply criticized. EU Climate Commissioner Wopke Hoekstra defended the result but showed little understanding for the criticism from the Global South. This is also because the island states and least developed countries support the deal.

Article 6 adopted: EU lifts blockade against ‘anything goes’ approach

It is an important step on the way to international carbon markets: Rules and standards for trading emission reduction credits under Article 6 of the Paris Agreement have been agreed after nine years of intensive negotiations. The agreement was only possible because the European Union gave up a years-long blockade with which it wanted to prevent weak transparency and greenwashing by the carbon markets.

The agreement on intergovernmental trading in emission credits (Article 6.2), with which supplier countries can earn money and buyer countries can improve their greenhouse gas balance, states that:

Countries that do not comply with the regulations (according to the text: whose reports for trade show “inconsistencies”) have no consequences to fear – apart from a vague obligation to rectify the problems without a clear deadline. The NGO Carbon Market Watch criticizes this.
Countries must disclose important information about the emission credits traded, but without a time limit, so it could take years before the quality of the emission credits is publicly available.

Jonathan Crook, Policy Lead at Carbon Market Watch, describes the agreement on Article 6.2 as an “anything goes” mechanism with numerous loopholes, hurdles, and complicated registration instruments for carbon credits.

Regulations for voluntary markets under Article 6.4

Article 6.4 on voluntary carbon markets for private actors was further negotiated after the initial agreement in Baku and further details have now also been agreed upon:

Certificates for CO2 removal are only issued if carbon is removed from the atmosphere during “climate-relevant periods”.
Projects under the Clean Development Mechanism (CDM) originating from the Kyoto Protocol can be transferred to Article 6.4 markets without further review and additionality.
There are no regular reviews of standards and methodologies for emission reduction projects to enable “regulatory stability”.

This means that the minimum standards on the voluntary carbon markets will be relatively loose in the future and therefore susceptible to greenwashing.

There is criticism of the new Article 6 regulations from many quarters – among them, “independent observers, researchers, the media and the countries themselves would carry a lot of weight on their shoulders to scrutinize the carbon markets,” says Jonathan Crook. The complexity and technical nature of Article 6 would likely present a significant obstacle to this task. Some countries could count on just that, says the emissions trading expert.

Large industrialized nations in particular, especially the USA, but also developing countries that want to make money on the markets, have always campaigned for weak rules in the past. They wanted to make the market simple and easily accessible for everyone. However, there is a risk that the instrument will lose integrity and enable greenwashing. luk

CLIMATE.TABLE EDITORIAL OFFICE

Bernhard
Pötter

Alexandra
Endres

Christiane
Kühl

Lisa
Kuner

Lukas
Knigge

Malte
Kreutzfeldt

Nico
Beckert

COP29: The most important results

By

Bernhard Pötter

The COP29 in Baku ended early on Sunday morning with a delay of more than 30 hours and a bundle of decisions. In the final days, which were sometimes chaotic, the conference was on the brink of collapse because many groups of countries felt they had not been considered. Many groups of negotiators strongly criticized the leadership of COP29 President Mukhtar Babayev because the process often lacked transparency and cooperation.

But when Babayev dropped the gavel early in the morning local time, these were the most important decisions of COP29:

Financial target NCQG

A new NCQG financial target: By 2035, industrialized countries are to raise at least USD 300 billion annually from private and public funds for developing countries. By 2035, a total of USD 1.3 trillion in climate finance should also flow every year. This includes the USD 300 billion, private investments, flows from the multilateral development banks (MDBs), and innovative mechanisms such as new levies.
To plan and review this process, a “Baku to Belém Roadmap” is to be established, which describes the growth to the mentioned 1.3 trillion by 2035.
The donor base for climate finance will be expanded beyond the industrialized countries: Emerging economies such as China, South Korea, the Gulf States, and Singapore can voluntarily define their share of the MDBs’ climate funds as climate aid. They can also have their South-South aid counted towards the joint climate target of at least 1.3 trillion.
However, Cuba, Bolivia, Nigeria and, above all, India loudly objected to the adoption of the NCQG at the meeting, to the applause of many observers in the room.

Emission reduction

The area of “mitigation” was particularly important to the industrialized countries, AOSIS, AILAC and LDC countries – but experienced strong resistance from the oil states led by Saudi Arabia. The corresponding GST resolutions from COP28 in Dubai (“transitioning away from fossil fuels“) were partially deleted from the texts and had to be laboriously written back in. There was no mention of the GST results in the mitigation work program of COP26.

To this end, “Dubai” should be anchored in the “UAE Dialogue“, which deals with the implementation of the Global Stocktake. The results of the COP28 Global Stocktake in Dubai are generally reaffirmed right at the beginning: These are tripling renewables, doubling energy efficiency and moving away from fossil fuels, the famous “transitioning away”.

However, this term itself was not found in this document. It was only referred to in paragraph 14 concerning paragraph 28 of the Dubai GST decision. One paragraph later, however, “transitional fuels” are explicitly mentioned – i.e. support for gas. There is also a rejection of “unilateral trade measures” such as the EU’s CBAM.

However, instead of being adopted as planned, the UAE Dialogue was postponed following objections from South American and EIG countries. It is now to be negotiated further at the SBSTA meetings in Bonn in June.

Adjustment, loss and damage

The global adaptation target was also only advanced with difficulty in Baku. To make it more concrete, a maximum of 100 indicators are now being targeted: All states are to undertake adaptation measures in certain key areas (for example the health sector, food, water). This also includes financial criteria. However, only procedural progress has been made. In terms of content, the work must be done by the conference in Belém.

In the area of finance, adaptation is mentioned in a separate paragraph, so there is a link to the NCQG, says Laura Schäfer from Germanwatch: According to the NCQG text, financing is to be “dramatically increased” and there is a high demand for grants and heavily discounted loans in this area. A “balance between adaptation and mitigation” is also being sought in the funding. The distributions from the funds that also deal with adaptation are to be tripled.

The topic of “Loss and Damage”, on the other hand, has disappeared from the financial text. The text recognizes that there are “significant gaps in the response to the increased scale and frequency of loss and damage”. But it contains no call to action or commitment to provide funding. The Loss and Damage Fund is only very indirectly seen as part of the UNFCCC climate finance mechanism, similar to the Green Climate Fund. It is clear from all the texts that the topic is being handled very delicately.

Article 6

After nine years of intensive negotiations, rules and standards for trading emission reduction credits under Article 6 of the Paris Agreement were agreed in Baku. The agreement was only possible because the European Union gave up a years-long blockade with which it wanted to prevent weak transparency and greenwashing by the carbon markets.

Gender

Hardly any progress was made on the topic of gender in Baku; instead, regression was prevented. The Lima Action Program of 2024 was extended by ten years. Next year at SB62 in Bonn, the development of a gender action plan is now to begin. However, a coalition of Saudi Arabia, Russia and the Vatican in particular rejected the new wording in many places, which was to be redesigned to be gender-inclusive.

NCQG adopted: USD 300 billion and a roadmap to Belém

By

Lukas Knigge

It took a walk-out by the island states (AOSIS) and the least developed countries (LDCs) to reach an agreement in Baku after all. Both left the negotiating room in protest on Saturday afternoon. The Azerbaijani COP29 presidency had left both groups of states out of the negotiations on the new climate finance target (NCQG) before presenting a first real draft text on Friday.

Subsequently, there was movement in the conference rooms. Europe, the most vulnerable states and the Presidency negotiated a new text behind closed doors, which, apart from a few changes, corresponded to the final text. The final agreement includes the following points:

There was still room for maneuver when it came to the amount (“quantum”) of the NCQG: The new climate financing target is now “at least” USD 300 billion – with the industrialized countries “in the lead”. In the previous draft, there had been talk of USD 250 billion. Bi- and multilateral donors from the public and private sectors are providing the funds for this core target. It is unclear to what extent the new target has improved on the previous target of USD 100 billion per year. If inflation up to 2035 and the expanded donor base are factored out, the contribution is unlikely to lead to a significantly higher commitment for industrialized nations.
The expanded donor base also includes contributions to climate finance from multilateral development banks. It is “recognized” that they contribute to the climate finance target “voluntarily”. In addition, developing countries can also voluntarily provide so-called South-South support, which would also contribute to the target.
The “Baku to Belém Roadmap to 1.3T” is intended to define the process for aligning the global financial system to bring total climate finance from all sources to at least USD 1.3 trillion by 2035. According to information obtained by Table.Briefings, the process could start as early as next year’s Petersberg Climate Dialogue, under the supervision of the COP presidencies in Baku and Belém. The development of minimum allocations, particularly for least developed countries and small island states, has been discussed for this process in the meantime, but is no longer included in the agreed text.
Quality: It is “recognized” that “grants” and “(highly) concessional loans” are “needed” in the areas of adaptation and Loss and Damage – a demand from the island states and least developed countries. However, there is no concrete figure in the text as to how large the share of the core objective should be made up of grants and concessional loans. However, development banks and their stakeholders are “invited” to provide more highly concessional loans.
What should the money be used for? The core objective only covers mitigation and adaptation. As in the Paris Agreement, a “balance” is to be achieved between the two areas. There is no specific sub-goal for adaptation. However, public spending on various funds to support developing countries (including the Adaptation Fund) is to be “at least tripled” by 2030 at the latest. However, some of the funds are severely underfunded. A tripling would not mean significant new resources. However, losses and damages are not mentioned in the core objective.
Review: The NCQG will be reviewed in 2030.

India rejects – without consequences

Once the applause for the historic agreement on the climate finance target had died down, critics of the deal were quick to speak out. Cuba and Bolivia attacked the target of USD 300 billion in particular as being too low. India’s negotiator Chandni Raina made it clear that she did not accept the result and rejected it – but only after COP President Mukhtar Babayev had dropped the gavel to accept the NCQG. India’s request to speak is thus recorded in the meeting minutes but has no effect. The NCQG remains adopted.

Raina complained that the presidency did not allow any requests to speak but immediately dropped the gavel. The usual question from the Presidency as to whether there were any objections failed to materialize. The document was nothing more than an optical illusion, Raina sharply criticized. EU Climate Commissioner Wopke Hoekstra defended the result but showed little understanding for the criticism from the Global South. This is also because the island states and least developed countries support the deal.

Article 6 adopted: EU lifts blockade against ‘anything goes’ approach

It is an important step on the way to international carbon markets: Rules and standards for trading emission reduction credits under Article 6 of the Paris Agreement have been agreed after nine years of intensive negotiations. The agreement was only possible because the European Union gave up a years-long blockade with which it wanted to prevent weak transparency and greenwashing by the carbon markets.

The agreement on intergovernmental trading in emission credits (Article 6.2), with which supplier countries can earn money and buyer countries can improve their greenhouse gas balance, states that:

Countries that do not comply with the regulations (according to the text: whose reports for trade show “inconsistencies”) have no consequences to fear – apart from a vague obligation to rectify the problems without a clear deadline. The NGO Carbon Market Watch criticizes this.
Countries must disclose important information about the emission credits traded, but without a time limit, so it could take years before the quality of the emission credits is publicly available.

Jonathan Crook, Policy Lead at Carbon Market Watch, describes the agreement on Article 6.2 as an “anything goes” mechanism with numerous loopholes, hurdles, and complicated registration instruments for carbon credits.

Regulations for voluntary markets under Article 6.4

Article 6.4 on voluntary carbon markets for private actors was further negotiated after the initial agreement in Baku and further details have now also been agreed upon:

Certificates for CO2 removal are only issued if carbon is removed from the atmosphere during “climate-relevant periods”.
Projects under the Clean Development Mechanism (CDM) originating from the Kyoto Protocol can be transferred to Article 6.4 markets without further review and additionality.
There are no regular reviews of standards and methodologies for emission reduction projects to enable “regulatory stability”.

This means that the minimum standards on the voluntary carbon markets will be relatively loose in the future and therefore susceptible to greenwashing.

There is criticism of the new Article 6 regulations from many quarters – among them, “independent observers, researchers, the media and the countries themselves would carry a lot of weight on their shoulders to scrutinize the carbon markets,” says Jonathan Crook. The complexity and technical nature of Article 6 would likely present a significant obstacle to this task. Some countries could count on just that, says the emissions trading expert.

Large industrialized nations in particular, especially the USA, but also developing countries that want to make money on the markets, have always campaigned for weak rules in the past. They wanted to make the market simple and easily accessible for everyone. However, there is a risk that the instrument will lose integrity and enable greenwashing. luk