The 29th Conference of the Parties (COP29), the annual UN climate conference, took place in Baku, Azerbaijan, amidst a charged geopolitical context and mounting criticism over its location. Civil society groups and several nations voiced concerns about hosting the event in a country with a contentious environmental and human rights record. Still, the conference proceeded with high expectations to tackle pressing issues, particularly climate finance and the operationalisation of carbon markets under Article 6 of the Paris Agreement.
In this article, we break down the highlights and hiccups of a special COP29 with Jacopo Bencini, a researcher at the EUI Carbon Markets Hub at the Florence School of Transnational Governance, who attended the event in Baku and shared his reflections on its mixed outcomes.
Breakthroughs amid procedural anomalies
Despite a challenging environment, COP29 achieved two significant milestones, says Bencini: an agreement on the New Collective Quantified Goal (NCQG) for climate finance and the long-awaited rules for the Paris Agreement’s Crediting Mechanism under Article 6 of the Agreement.
“COP29 managed to get to decisions on both the new global climate finance goal for the 2025-2035 period - despite strong criticism from India and other countries, and most civil society observers - and rules for carbon markets under Article 6 against all odds, in a very challenging geopolitical environment,” Bencini explained.
However, these achievements came at a cost: critical discussions on transitioning away from fossil fuels and mitigation were deferred to June 2025 at least, reflecting a concerning decline in the perceived urgency of these measures despite the obligation for every country to deposit new, updated, climate plans (NDCs) under the UNFCCC by the next spring.
Bencini: “Key agenda items have been sacrificed for the sake of reaching a decision on finance, including the Mitigation Work Programme and the implementation of the 2023 Global Stocktake, with all references to the transition away from fossil fuels disappearing from the final texts, marking a worrying step back in ambition.”
One of the most consequential outcomes of COP29 was the adoption of methodologies enabling the Paris Agreement Crediting Mechanism under Article 6 to finally begin operations by 2025, after nearly a decade of delays.
These rules, including important methodologies on how to manage CO2 removals, were adopted in an unorthodox manner, with the conference presidency gavelling them through on the first day based on decisions adopted in October by a technical body—an unprecedented procedural move designed to avoid the kind of political deadlock that plagued COP28.
“With an unorthodox procedure, the COP adopted rules and methodologies to finally enable the Paris Agreement Crediting Mechanism under Article 6 to start operations, after almost a decade of discussions,” Bencini explained. “While it set a procedural precedent, it also allowed critical carbon market rules to move forward, which stakeholders have been waiting for since 2015.” On the other hand, negotiations on the newly created 100 indicators under the Global Goal on Adaptation, which were perhaps as technically complex as the ones on carbon markets, were left to the usual COP procedure and a decision was reached after two weeks of increasingly distressed debates.
Missing the targets on the Global South
The agreement on the New Collective Quantified Goal (NCQG) was the major outcome of COP29, setting a global target to mobilise $1.3 trillion in climate finance annually by 2035. Of this, $300 billion is expected to be mobilized by industrialised nations, while the rest relies on voluntary contributions from all actors, including emerging economies, private finance and multilateral development banks. This broader inclusion of “all actors” marked a significant shift in the approach to climate finance.
The annual climate finance mobilization is expected to fund the parts of developing countries’ climate plans which are conditional to external support, together with their National Adaptation Plans, and Adaptation Communications under the UNFCCC. The UNFCCC is then expected to produce a report on whether and how this mobilization is concretely taking place by 2030.
In Bencini’s opinion, “These compromises were both a political step forward and a disappointment. It met demands from the Global South for ambitious financial commitments, at least at the level of overall umbrella figures, but clarity on accountability and implementation will be key in building mutual trust in the next few years.”
This finance deal revealed, indeed, deep divides between developed and developing nations. Wealthier countries committed only a fraction of the total target—$300 billion which the Global South wanted in the form of grants and low-interest loans—leaving the majority to be sourced from private investment and untested mechanisms, such as fossil fuel levies. Vulnerable nations, including small island states and countries with less developed economies, criticised the agreement for favouring large emerging economies and the Global North’s “business as usual” while neglecting their immediate needs. Meanwhile, emerging economies warned that the heavy reliance on private finance could exacerbate debt burdens.
The finance agreement triggered a backlash from campaigners, who described it as a “betrayal.” India, Cuba, and Bolivia were among the most vocal critics, accusing wealthy nations of shirking their responsibilities.
Also, the emphasis on finance and carbon markets came at the expense of other critical issues. Negotiations on the Mitigation Work Programme and the implementation of the 2023 Global Stocktake stalled, with all references to transitioning away from fossil fuels dropped from the final texts.
“Civil society and many countries from the Global South expressed frustration on the lack of ambition, especially on climate finance, but the double-goal compromise solution reached in Baku on the NCQG might represent the most realistic reachable outcome in an otherwise impossible negotiation,” said Bencini.
The road to Brazil 2025
Despite its shortcomings and a challenging geopolitical climate, COP29 successfully convened nearly all nations in Baku. It also managed to deliver results on issues many considered impossible to resolve in the current geopolitical climate, such as the NCQG and Article 6 together.
Beyond the negotiation halls, COP29 provided a platform for discussions on carbon markets, removal credits, and emerging approaches to mitigation, such as the emerging “contribution” model. While these conversations signal progress in some areas, they also highlight risks, including potential loopholes that could undermine the integrity of climate commitments in both the public and private sectors.
“Ultimately, this COP demonstrated the ever-surviving power of compromise and the fact itself that the COP did not fail as a process, despite less-than-optimal outcomes, is a small sign of hope for the UN system in a challenging context,” Bencini concluded. “But it also underscored the urgency of keeping climate ambition alive in a world running out of time.”
“The agreement on carbon markets at COP29 in Baku can become a new start for international cooperation, not least on removing carbon dioxide from the atmosphere” added Professor Jos Delbeke, EIB Chair on Climate Change Policy and International Carbon Markets at the EUI - “quoting the EU Climate Commissioner Woepke Hoekstra, the Baku agreement is, overall, “less than what we would have liked, but better than we feared””.
Brazil will be the host country for COP30 in 2025, which will be held in Belém, PA.