COP29 – Briefing Paper

The 29th Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) will take place in Baku, Azerbaijan, between 11 and 22 November 2024. This briefing paper provides a high-level explanation of the main themes of COP29, the legacy of COP28, the COP negotiating blocs and their aims, and COP29’s predicted outcomes.

At COP29, the Parties to the UNFCCC (197 states plus the EU) will come together to take action towards achieving their collective climate goals under the 2015 Paris Agreement and the UNFCCC, including limiting global warming to 1.5°C or well below 2°C. Building on the progress made at prior COPs, COP29 is expected to further negotiations on the New Collective Quantified Goal on Climate Finance (NCQG) and on carbon trading under Article 6 of the Paris Agreement.

What are the main themes of COP29?

Each year, the Conference of the Parties gives states and civil society organisations the opportunity to make representations on each article of the Paris Agreement, as well as on the development of mechanisms, alliances, working groups, processes, and rules thereunder. As a uniting call to action, the host nation typically announces key negotiating focus areas. This year, as President Party of COP29, Azerbaijan, has presented four major themes for the upcoming climate conference contained in a Framework for Action and its Letter to the Parties and Constituencies:

1. Enhancing Ambition - Setting out clear and transparent plans to keep 1.5°C within reach as per the Paris Agreement.
2. Enabling Action - Ensuring there is financial support for the energy transition including for developing countries’ needs.
3. The “Fixed Objective” - Confirming that meeting the 1.5°C target is a “fixed objective”, a “moral duty” and “fixed priority”.
4. Ensuring an Inclusive Process for Inclusive Outcomes - Delivering the conference in an inclusive and impartial manner, ensuring no one is left behind.

While agreement on each of the above four themes will be crucial to a successful COP29, the negotiations regarding climate finance will be the top priority. Climate finance can be defined as the finance needed to ensure developing countries can reduce their greenhouse gas (GHG) emissions, adapt to the effects of climate change and recover from the inevitable losses incurred due to climate change.

COP29 has been described as  “the finance COP” and it will see the culmination of negotiations on the New Collective Quantified Goal on Climate Finance. The NCQG will be the foundation for international climate finance arrangements after 2025 and will replace the commitment made by developed country Parties at COP15 in 2009 to provide US$ 100bn of annual climate finance to developing country Parties (to see which Parties are considered developed and developing click here). Despite committing to mobilise the US$ 100bn annually by 2020, developed country Parties only met this commitment in 2022 (although the methodology used to reach this figure has been criticised) and there remain significant differences of opinion on this aspect of negotiations between countries designated as providers of finance under the UNFCCC and those designated as beneficiaries

Negotiations regarding the NCQG are ongoing, with developed countries generally pushing for greater private sector involvement in climate finance arrangements, a broader base of contributing countries, as well as greater oversight of how climate finance is allocated and spent. Many developing countries on the other hand reject the centrality of loans to existing climate finance arrangements and say they require  significantly increased investment to grow economically and develop sustainably. No progress can be made in any country on reducing GHG emissions or adapting for the effects of climate change without financial support, and with Parties still not agreed on the amount to be distributed or which countries should be required to contribute, the stage is set for difficult negotiations.

What is the legacy of COP28?

As with all COPs, COP29 will build on the legacy of its predecessor, COP28, held in 2023 in Dubai, United Arab Emirates. The key outcome of COP28 was the first global stocktake, in which the Parties to the Paris Agreement reported on the progress they made towards meeting their nationally determined contributions (NDCs). NDCs are the non-binding targets countries set themselves to reduce GHG emissions and adapt to the impacts of climate change).

The agreed outcome of the global stocktake was communicated as “the UAE Consensus”. Most significantly, this contained a decision by all Parties to "transition away from fossil fuels in energy systems, in a just, orderly and equitable manner”. As the first ever mention of fossil fuels in a major negotiated UNFCCC decision, this signified the end of longstanding opposition from hydrocarbon-dependant states to the recognition that the use of fossil fuels must (eventually) end. This issue is by no means settled, however, as COP29 will see Parties divided on how fast and in what way a just, orderly and equitable transition should take place. Although the UAE was instrumental in getting this wording over the line last year, it remains unclear how far Azerbaijan’s own economic dependency on fossil fuels will limit its ambitions regarding the energy transition.

After negotiations on inter-state carbon trading market under Article 6 of the Paris Agreement completely broke down at COP28, concerted efforts are expected by Parties to try and break the political and technical impasse around operationalising Article 6. Carbon markets are seen as crucial, not only to reducing existing emissions, but also to rewarding economically those countries which are not large emitters (usually developing countries) for not exploiting oil and gas reserves or investing in new fossil fuel infrastructure.

COP28 also saw the successful decision to operationalise the Loss and Damage Fund and although progress remains to be made regarding fundraising and the fund’s governance, this success means it is unlikely that Loss and Damage will be a major point of contention this year.

What are the negotiating blocs at COP29 and what are their aims?

To strengthen their negotiating positions and to streamline negotiations, like-minded Parties to the UNFCCC often form negotiating blocs or groups. Membership of a bloc is not exclusive, and countries may join different blocs or represent themselves depending on their views on the issue under discussion. Some of these blocs and their respective aims are listed below:

1. The Group of 77 and China

The G-77 and China includes all developing country Parties. The bloc doesn’t possess a consistent agenda but, as it represents 80% of the global population, it is very influential. Its COP29 aims are to ensure greater and continuing climate finance contributions from developed country Parties.

2. The LDC Group

The LDC Group consists of the 46 “Least Developed Countries”. LDCs are particularly vulnerable to environmental and economic shocks and so are disproportionately affected by the climate crisis. While often voting as part of the G-77 and China bloc, the LDC Group often takes positions contrary to those of emerging and oil-exporting economies.

3. AOSIS (the Alliance of Small Island States)

AOSIS is a group of especially climate-vulnerable island states which, due to their vulnerability and comparatively minimal contribution to climate change, were integral to the agreement of the 1.5°C goal in Paris and the creation of the Loss and Damage Fund. At COP29, AOSIS will push for progress on the Loss and Damage Fund and ambitious GHG emissions reduction targets.

4. The African Group of Negotiators

The African Group represents all African states and its negotiation goals at COP29 are mostly financial, focusing on reaching agreement on the NCQG, progressing the Loss and Damage Fund and achieving joint decisions on operationalising inter-state carbon trading mechanisms.

5. The Environmental Integrity Group

The EIG is a group of countries from Europe, Asia and the Americas that focuses on mitigation ambition and ensuring effective governance and transparency in climate commitments.

6. The Umbrella group

The Umbrella Group is a coalition of non-EU Parties, including the UK, seeking consistent emissions reduction targets and transparent reporting and accounting. It also seeks current, rather than historic, GHG emission levels to inform accountability for climate change.

7. The Coalition for Rainforest Nations

The Coalition includes over 50 rainforest nations and negotiates as a steward of the world’s last rainforests and as implementors of the UNFCCC’s REDD+ anti-deforestation programme.

What would success look like at COP29?

Success at COP29 will be measured against Azerbaijan’s main conference themes (as described above) as well as the key issue of the NCQG. Inevitably, success will be viewed subjectively, depending on the aims of participating nations and their negotiating blocs. The following are key areas for progress:

• Agreement on the New Collective Quantified Goal

As with previous conferences, climate finance remains a top priority. Neither developed or developing country Parties have been fully satisfied with the existing US$ 100bn climate finance commitment discussed above. Agreement on the NCQG should both radically increase the financial flows available to developing countries as well as ensure a rational and transparent governance structure that will ensure support from developed countries. The need is clear, with the cost of developing countries implementing their NDCs to 2030 estimated to be US$ 5.8tn.

• More Ambitious NDCs

The Paris Agreement requires Parties to submit new NDCs every five years. Parties are due to publish their next set of NDCs by February 2025. These new NDCs must both take into account the findings of COP28’s First Global Stocktake and be more ambitious than those they are replacing. Deep emissions cuts are required to keep the 1.5°C limit within reach and therefore a successful COP29 would see large emitters, including the host, Azerbaijan, publishing NDCs with ambitious emission reduction targets and clear financial backing during the Conference, thereby setting the tone for other countries to follow suit. The urgency of increasing NDC ambition has yet again been illustrated by recent extreme weather events such as the recent hurricanes in Florida and the floods in Spain.

• Agreement on Article 6

Allowing countries to trade “internationally transferable mitigation outcomes” (ITMOs), or carbon credits, under Article 6 of the Paris Agreement is considered a key mechanism for persuading high-emitting countries to reduce GHG emissions whilst incentivising developing countries to prioritise low-emission energy sources and protect natural carbon sinks such as rainforests and mangroves. A successful COP would see the implementation of the rules around Article 6 first agreed at COP26 in 2021, an agreement on how to avoid double counting emissions, and a new, binding and high integrity carbon market coming into being.

• Loss & Damage

The Loss and Damage Fund, which will provide support to countries suffering from inevitable losses resulting from climate change, came into being at COP27 and progressed at COP28. The COP29 Presidency has called for significantly greater contributions of funds at COP29 and the full operationalising of the fund as soon as possible.

On 11 November 2024 the world’s eyes will turn to Baku and Clyde & Co will be on site, covering events in the Blue Zone and reporting on potential impacts to our clients and markets around the world. Look out for further articles and please reach out if you have any questions.

Key contacts: Wynne Lawrence and Nigel Brook