Each COP has its distinct focus and challenges – with this year’s 29th session, held in Baku, Azerbaijan, focussing on the economic issues holding developing countries back when it comes to protecting the planet.
Dubbed the “COP of finance”, COP29 successfully delivered on one of its main tasks: a new financial framework with which to replace the expiring and outdated $100 billion goal currently in place until 2025. Whilst this marked a significant step forward in climate finance, however, the conference did not agree on a mitigation outcome, nor did it succeed in addressing the gaps in broader policy alignment.
A timely replacement for a decade-old commitment
As COP29 wrapped up its extended session, a pivotal outcome in the ongoing fight against climate change was delivered: the adoption of the New Collective Quantified Goal (NCQG) designed to replace the existing $100 billion annual finance. Unlike the previous model, this new NCQG target is determined by the realistic financial needs of developing nations, resulting in much more inclusive figures – calculated in trillions of dollars.
Setting an ambitious target of raising at least $300 billion per year by 2035, developing nations must shoulder the bulk of the environmental responsibility. Indeed, funding will come from a mix of public and private sources, including but not limited to multilateral and alternative finance channels. Alongside this primary target lies an aspirational outer layer – a call for all global actors to collectively mobilise £1.3 trillion per year by 2035. This larger goal nonetheless reflects more hope than certainty, with COP29 lacking the authority to mandate non-Party contributions.
With countries due to submit their third round of Nationally Determined Contributions (NDCs 3.0) in 2025, one thing we can, however, be sure of is that the timing of this NCQG has been critical. In the NDCs, countries must essentially outline all of their climate ambitions and plans. Developing countries, which are heavily reliant on external financial support to achieve these, naturally struggle to address their climate commitments without adequate resource, thereby making the promise of increased financial flows an important one. Indeed, this could encourage more ambitious NDCs across the globe, setting the stage for greater collective climate action.
Progress with caveats
Whilst the NCQG brings a much-needed financial boost, it is not without its flaws, however. One of the most contentious issues was the contributor base, which developed nations have long advocated to expand, in order to include Arab states and countries like China. All of these countries are major emitters with a high GDP per capita. The issue is that the NCQG stops short of mandating contributions from them, instead, merely encouraging voluntary contributions. Moreover, it reassures such countries that their decision to contribute voluntarily – or not – will not affect their status as developing nations.
The policy layer of the NCQG is likewise weak, failing to align all financial flows with the goals of the Paris Agreement, despite calling upon the Parties to enhance enabling environments for climate finance. It’s a critical omission that reflects a missed opportunity to ensure that climate finance is not just augmented but also strategically deployed to support sustainable, long-term outcomes.
A missing piece of the puzzle
Beyond the NCQG, COP29 faltered in other key areas – particularly mitigation. Despite extensive discussions, the conference did not yield a tangible mitigation outcome, underscoring a critical gap in addressing the root causes of climate change. Whilst the NCGQ lays the groundwork for increased support, its true impact will hinge on how effectively developing countries use these resources to advance mitigation efforts – a challenge left unresolved for COP30.
A mixed legacy
COP29 will thus be remembered as both a milestone and a missed opportunity, on the one hand representing a significant leap forward in financial support for developing nations upon aligning with their needs and potentially paving the way for more ambitious climate goals, as it fails to address mitigation – and the limitations within the NCQG – on the other.
It’s all indicative of persistent challenges in global climate governance and, as the world looks to COP30 for solutions, the stakes remain high. The success of COP29’s outcomes will only become evident in 2025, when countries unveil their new NDCs. Until then, the COP of finance remains a cautious victory, with much work left to be done in the race against both climate change and time.
View all news