Author: Sadie Tetreault

It is impossible to ignore the permanent shadow that the New Collective Quantified Goal (NCQG) will cast on the reputation of COP29. With this COP dubbed the “Finance COP,” expectations were high for developed nations to increase their annual climate finance commitments from the $100 billion initially agreed upon in 2009 and finally achieved in 2022. The NCQG was intended to set a new target for annual climate finance by 2030, with research suggesting that a figure as high as $1 trillion would be required annually (source: WRI).

As negotiations dragged into overtime, optimism waned. Delegates from the Association of Small Island States (AOSIS) walked out in protest over a proposed $250 billion goal, calling it a betrayal to vulnerable nations (source: BBC). The eventual agreement of $300 billion annually by 2035 was widely criticized. Developing nations like India voiced strong objections, calling the rushed deal inadequate, while economists highlighted that the deal’s failure to account for inflation further eroded its effectiveness (source: New York Times, The Guardian).

In contrast, COP29 made unexpected progress on Article 6 – the mechanism for trading emissions reductions. After nearly a decade of negotiations, this agreement provides a  framework for emissions trading under the Paris Agreement to support nations in meeting their nationally determined contributions (NDCs). This deal will have wide-ranging repercussions in the voluntary carbon markets, which will likely adapt to mirror many principles from the Article 6 framework (although the voluntary markets will not be bound to this framework). Unfortunately, the deal on Article 6 did fall short of establishing robust accountability standards, particularly for credits with data inconsistencies (source: Carbon Market Watch).

The outcomes of COP29 reveal a pattern of imperfection. Some negotiators argued that no deal would have been better than an imperfect one, but the COP presidency prioritized securing agreements at all costs. The presidency wields considerable power, from setting agendas to managing the release of draft texts ahead of negotiations. Critics noted that this COP’s logistical mismanagement and opaque processes contributed to rushed, late night agreements that many parties accepted under duress.

It is worth questioning whether COP29’s deals might have been more comprehensive and less hurried if managed by a host country more committed to climate urgency. The Azerbaijani president’s opening remarks, referring to oil as a “gift from God” (source: BBC), underscored the nation’s friction with the conference’s goals.

Still, the blame cannot rest solely on logistical failings. Developed nations have consistently shirked their responsibilities in addressing the climate crisis. The $300 billion financing commitment is far below what is needed, and the inability of wealthier countries to push for a higher target is disheartening.

Looking ahead, 2025 will be a pivotal year for climate action. Nations will submit updated NDCs, the U.S. faces federal leadership hostile to climate initiatives, and COP30 will convene in Brazil’s Amazon Rainforest. Whether these milestones bring progress or further frustration remains to be seen, but one thing is clear: the urgency for meaningful climate action has never been greater.

Finance has been front of mind for national delegations at this year’s COP. As countries decide on the New Collective Quantified Goal (NCQG) for climate finance, there is chatter inside and outside the negotiation rooms about how climate finance can best be scaled in a way that is equitable and accessible. Throughout the week, I had the opportunity to attend several panel discussions that dove into this topic. I was particularly interested in understanding how the private sector can do a better job of supporting climate finance – moving away from loans and towards collaborative investment.

Below are a few key takeaways from these discussions.

Insurance has a major role to play in climate finance

Involving the private sector in climate finance requires derisking transactions. At a panel in the Singapore Pavilion, experts discussed how it is difficult to derisk climate investments because current insurance models are not built for the sector. Because this space is still nascent, insurers and investors have not developed a forward price curve to manage risk. This means that insurers must review projects on a case-by-case basis, which often leads to high insurance expenses. For this reason, projects are often left to choose between risk and profitability a tradeoff that can quickly turn off investors when more lucrative opportunities are available.

Energy finance is lacking in the global south

At an event hosted by the Climate Reality Project, panelists spoke about how limited access to finance is holding back the deployment of renewables in Africa. While the continent has 60 percent of the global potential for solar power, it currently has fewer solar panels than the state of Florida. Panelists outlined that this is partially due to the fact that renewable energy development is often funded by private capital, which has historically shied away from projects in developing nations.

Public finance from developed nations (as committed under the NCQG) could be a major step in supporting Africa’s green energy expansion. While the panel did not touch on how to incentivize green private finance in Africa, I wonder how enhanced insurance and derisking efforts could also have a role to play in solving this problem when public finance falls short.

Nations are finding creative ways to finance the energy transition

In another event at the Singapore Pavilion, the Monetary Authority of Singapore hosted a panel discussion on the Transition Credits Coalition (TRACTION), which brings together public, private, and nonprofit institutions to analyze a potential market for energy transition credits in Asia. I was particularly excited to attend this discussion because I had a small role in supporting RMI, the coalition’s secretariat, in its work on this project.

TRACTION is taking a unique approach to financing the energy transition by studying how transition credits could be issued to finance the early retirement of coal plants. Ideally, proceeds from the sale of these transition credits would replace the coal plant’s foregone future revenues while also supporting the development of equitable and durable renewable energy projects. This coalition-based approach to financing offers an interesting example of how public and private actors can combine their strengths to accelerate the energy transition.

As a student interested in the global carbon markets, I was eager to sit in on Article 6 negotiations at COP29 this year. My expectations, however, were low. Progress on Article 6 has been slow in the last couple years, and the New Collective Quantified Goal (NCQG) for climate finance was deemed a higher priority this year. It was therefore surprising when the parties confirmed a key agreement on the operationalization of Article 6.4 of the Paris Agreement during the opening plenary.

Article 6 outlines a system for nations to trade emissions reductions and count these towards their nationally determined contributions (NDCs), a system with roots in the Kyoto Protocol’s Clean Development Mechanism. UNFCCC negotiators have spent years developing a rulebook for how to operationalize this system. In particular, Articles 6.2, 6.4, and 6.8 have been the major points of discussion. The agreement reached on the first day of COP29 clarified how emissions reductions from one country may be certified as a tradable carbon credit, removing a major barrier to the implementation of this system.

With this early progress, I was eager to sit in on negotiations. I first sat in on a working session on Article 6.8, which covers non-market actions that facilitate shared emissions reductions. In this session, delegates from Bolivia, Burundi, India, and Japan presented on how their countries are engaging in actions that could be used to model future projects under Article 6.8. Notably, Bolivia emphasized its engagement in Mother Earth centric actions, which join climate change with sustainable development and poverty eradication. These Mother Earth centric actions would later become a topic of discussion in Article 6.8 negotiations, in which many developing countries (including Bolivia) advocated for the inclusion of these methods in the text. It was interesting to see this strategic move by Bolivia, using the working session to add nuance to its negotiating position in later sessions.

Articles 6.2 and 6.4, which outline the core principles for emissions trading, faced an uphill battle throughout the week. Because of the early progress on Article 6.4, the negotiators moved forward at an ambitious pace. Unfortunately, this pace may have been a bit too brisk.

In one meeting on Article 6.2, delegates noted that they had not had sufficient time to read the draft text before the meeting. The meeting was adjourned so that delegations could spend time developing their positions, but not before several delegates took the floor to individually declare their dissatisfaction. The Co-Facilitator of the meeting steadfastly reminded negotiators that each minute they took the floor to lament about their lack of time was another minute lost.

While it is ironic for delegates to use precious time to complain about a lack of time, it makes sense given the hurry-up-and-wait style of these negotiations. Due to scheduling, negotiations are rarely allowed to extend past their allotted time slot. After each block, negotiators wait to receive draft text, and then often wait to review this text with the head of their delegation.

The resolution of the Article 6 rulebook would have major global effects. Aside from operationalizing a useful tool in helping countries meet their NDCs, the rulebook would provide clarity and stability to private actors that participate in the voluntary carbon markets. This is because the clear rules on credit measurement, reporting, and certification would provide a quality baseline for the private sector, which currently exchanges carbon credits in an unregulated environment (despite significant help from organizations like the ICVCM). The voluntary carbon markets would not be bound to the rules of Article 6, but would instead have the opportunity to model themselves after this system to promote integrity and consistency.

With the negotiators motivated yet pressed for time, I’m cautiously optimistic that there could be an agreement during this COP. This one may be a buzzer beater!

After nearly 24 hours of travel and a scant night of sleep, I was fueled by my last drops of adrenaline as we approached the entrance to COP29 in Azerbaijan. In preparing for the day, I had been optimistic about diving into meetings, learning about Article 6 negotiations, and engaging with eager members of civil society. In reality the day moved a bit slowly, with delegations, coalitions, and the event space itself using this time to prepare for the week ahead. Below are three first impressions from this day of commencement and continued preparation.

1. It feels like IKEA

COP29 is being held in Baku Stadium, a sports arena currently retrofitted for this major climate convention. The stadium is parsed into large hallways, meeting rooms, and press spaces using temporary construction materials.

The pavilions – where each participating country creates a hub for information and events – feel like IKEA’s main showroom. Nations have set up their living rooms for the week in this large warehouse space. But instead of fluffy couches, each setup has four panelist chairs facing a handful of seats for a modest audience. As a bonus, many countries have set up interactive displays and small coffee bars along the perimeter. Some countries (like the United States) were yet to complete the construction of their pavilion space, while China and Japan immediately offered heavily-staffed and highly-interactive hubs.

2. Space is limited and people are eager

Today’s main event was a plenary session in which the UN provided opening information on the upcoming negotiations for the week relating to the UNFCCC, the Kyoto Protocol, and the Paris Agreement. These opening sessions have earned fame for being the place of groundbreaking Day 1 announcements, such as the announcement of last year’s Loss and Damage Fund.

Attendees were clearly excited, and lines to get into the event space were long and chaotic. Security guards worked hard to maintain order as crowds tried to cram themselves through bottlenecked entrance areas. In the end, it appeared that most people (including myself) did not make it into this plenary session. It will be interesting to see if a lack of space plays a continued role in the upcoming two weeks of COP29.

3. Side meetings are worth the time

At 9:00 am, I attended RINGO’s daily morning meeting. RINGO is the organization of research and independent NGOs represented at COP and stands as a neutral body throughout the negotiations, with its members providing advice to party members in an individual capacity. This meeting connected me with other students and academics tracking Article 6 negotiations and exposed me to a network of email lists and WhatsApp groups that would help provide access and information throughout the rest of the day (and the rest of the week). If nothing else, today’s engagement with RINGO was an extremely useful starting point in understanding how to navigate COP29 going forward.

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As I look ahead to the rest of the week, I am curious to see how delegations at COP29 are able to address the highly consequential climate issues on the agenda. Will space constraints lead to negotiation delays? Will the United States’ lame duck delegation have a voice at the table? Will all delegations move with urgency given recent news of the earth’s 1.5 degree warming? I’m hopeful that the days to come show progress, cooperation, and understanding on the pressing issues that we have all traveled so far to discuss.