Climate Agreement in Baku
$300 billion per year for developing countries by 2035
Climate Agreement in Baku
The gavel came down after an agreement was finally found this week following two weeks of negotiations at the 29th United Nations Climate Change Conference, the Conference of the Parties of the UN Framework Convention on Climate Change, COP 29, in Baku, Azerbaijan, a petrostate.
COP is a series of formal multilateral meetings where governments from almost 200 countries come together to assess global efforts to advance the Paris Agreement climate goals, measure progress, and negotiate the best way forward to address climate change.
This week, the world’s richest developed countries committed to taking the lead in pledging to provide $300 billion per year for developing countries by 2035 to help them mitigate the increasingly catastrophic impacts of climate change and transition to low-carbon economies. This core target is a significant uplift from the previous climate finance goal of $100 billion, and it is expected to unlock a new wave of global investment. It is part of an overall commitment to a new global target to channel $1.3tn of climate finance to the developing world each year.
This week’s conference also ended the decade-long wait for the conclusion of Article 6 negotiations on regulating carbon trading under the UN. It is expected that financial flows from compliant carbon markets could reach $1 trillion per year by 2050, which are expected to be mainly destined for developing countries.
However, many developing countries, such as India, are not happy with the outcome and would have preferred a much larger contribution pledge from the world’s richest countries. India’s representative at the conference, Chandni Raina, voiced strong objections and characterized the deal as an "optical illusion" that fails to address the pressing needs of developing countries.
Politics is the art of the possible and despite such concerns, it was possible to get an agreement over the line and move the needle, even if it has not moved as much as some countries would have liked. At the close of COP 29, the Conference President, Mukhtar Babayev, said that:
“The Baku Finance Goal represents the best possible deal we could reach, and we have pushed the donor countries as far as possible. We have forever changed the global financial architecture and taken a significant step towards delivering the means to deliver a pathway to 1.5C. The years ahead will not be easy. The science shows that the challenges will only grow. Our ability to work together will be tested. The Baku Breakthrough will help us weather the coming storms.”
Meanwhile, the UN Climate Change Executive Secretary, Simon Stiell, described the new finance goal agreed upon in Baku as “an insurance policy for humanity”. He said:
“It has been a difficult journey, but we've delivered a deal.
This new finance goal is an insurance policy for humanity, amid worsening climate impacts hitting every country. But like any insurance policy – it only works – if premiums are paid in full, and on time. Promises must be kept, to protect billions of lives.”
COP30, the 29th UN Climate Change Conference, will take place in November 2025 in Brazil.