Carbon Markets & Climate Finance: What Happened at COP29?

COP29, the largest sustainability conference of 2024, has concluded. 

The conference, hosted by Azerbaijan in Baku, saw world leaders, corporate sustainability giants and charities come together to work towards a sustainable future for the planet. 

So – what did they achieve? And how will this impact next year’s COP30 in Brazil?

The finance deal from the ‘finance COP’

COP29 talks stretched past the conference’s expected finish on Friday into Sunday, but a finance deal was agreed.

Developed countries have agreed to support developing nations with “at least” US$300bn per year by 2035, named the “Baku Breakthrough” by the COP29 Presidency.

However, this remains far short of the US$1.3tn that has been called for by developing nations.

The agreed New Collective Quantified Goal (NCQG) contains the “core target” of mobilising at least US$300bn per year and calls on all actors to reach US$1.3tn by 2035.

COP29 President Mukhtar Babayev says: “When the world came to Baku, people doubted that Azerbaijan could deliver. They doubted that everyone could agree. 

“They were wrong on both counts. With this breakthrough, the Baku Finance Goal will turn billions into trillions over the next decade. 

“We have secured a trebling of the core climate finance target for developing countries each year.”

Rachel Delacour, CEO at Sweep, says: "Having attended COP26, and COP28 last year, I saw for myself how this event can bring people together to share perspectives that attendees may well be aware of on paper, but which take on a new resonance when those sharing them are brought face-to-face.

"It’s important to acknowledge and listen to the disappointment of many developing nations at the agreement for wealthier states to provide US$300bn annually to them by 2035.

"However, this is nonetheless an historic step forward. Coming alongside an ambitious US$1.3tn broader finance target, it represents a step-change in climate finance ambition.

"This tripling of funding from developed nations sends a powerful signal to the private sector about the scale of investment needed."

Oil and gas controversies: What happened in the lead up to COP29?

Whilst COP29 itself took place over two weeks, it had been in the works for significantly longer.

Azerbaijan was announced as the conference’s host country, representing Eastern Europe, at the end of COP28 in Dubai, Saudi Arabia. 

More than 60,000 delegates registered to attend the conference.

Controversies took hold almost immediately, partially due to the country’s exports being more than 90% fossil fuels. 

In the week before the conference, COP29 CEO Elnur Soltanov was secretly filmed discussing fossil fuel investments in a meeting about conference sponsorship by NGO Global Witness. 

A separate investigation by the NGO found that more than 1,700 fossil fuel executives registered to attend COP29, and 22 international sustainability leaders signed an open letter calling for "urgent reform" of the COP process.

What was achieved at the 2024 UN Climate Conference?

On the conference’s first day, Article 6.4 of the Paris Agreement was ratified, establishing a UN-backed body to regulate carbon credit trading internationally.

Sonya Bedford, Partner at law firm Spencer West LLP, says: “The impact and ultimate success of this agreement will depend on what the carbon credits are used to incentivise in the first place, for example, more renewable energy or energy efficiency initiatives.

“It also depends on whether there is then a market for the carbon credits which then drives more renewables and decarbonisation. If these conditions are satisfied, then the agreement is ultimately a good thing.”

Climate finance was a key part of the discussions, and COP29 saw the NCQG’s previous agreement of US$100bn raised to US$300bn – still short of the US$1.3tn needed. 

Across industries, leaders came together to learn from each other and share their ideas. 

Sara Mariani, Director of Sustainability and EDI at the FIA, took part in a ministerial round table on Greening Urban Transport.

"Achieving more sustainable road transport will look different everywhere, and we believe that countries should be allowed to find, develop or adopt the solutions that suit them," she says.

"I was inspired to hear what other organisations and governments are doing in this space. Notably, Azerbaijan's Ministry of Digital Transformation and Mobility explained that they had created a digital twin of Baku to model and test solutions for improved micro-mobility and public transport access.

"Sharing knowledge in these forums is step one. Cross agency, ministerial and inter-governmental collaboration is a key part of the green transition - and will help us to ensure that the very best ideas and solutions are developed and shared across the world."

Looking specifically to the UK, Prime Minister Keir Starmer announced new “ambitious” climate targets, aiming to reduce emissions 81% by 2035.

Peter McGettrick, UK Managing Director at Turner & Townsend, said: “The higher emissions targets set out by the Prime Minister in Baku today send a clear signal that Labour is serious about its environmental commitments. 

“As deadlines loom larger, it is vital that the UK takes an international lead.”

Andrew Symes, Co-Founder and CEO of OXCCU, says the target is “ambitious but vital”.

“Achieving this target without fundamentally altering people’s lives will depend on the strategic development of emerging technologies across key sectors, many of which are capable of reducing emissions significantly while preserving the quality of life we enjoy today.”

What will happen at COP30?

Whilst COP29 did have productive outcomes, countries did not reach an agreement on the “global stocktake”, including a pledge to phase down fossil fuels, which will be picked up again at COP30 in Belém, Brazil.

The NCQG agreement says parties will produce a report for COP30 on “scaling up climate finance”.

Sophie Graham, Chief Sustainability Officer at IFS, says: “There is currently a disconnect between where capital is being deployed and where it will have the biggest impact on environmental outcomes. 

“Considering the two most critical enablers of a sustainable future are technology and capital, there will be an influx of investments in asset-intensive industries like manufacturing and logistics next year. 

“With companies in these sectors tapping into AI to drive efficiencies and sustainability, their transition to a green, clean economy will be the most significant shift in history.”

The European Union’s methane abatement partnership roadmap, announced at COP28, will produce first examples of how partnerships are being implemented in the 2025 conference. 

Countries are due to submit new Nationally Determined Contributions by February 2025, so COP30 will be host to discussion on these. 

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