What to Expect From COP29 in Azerbaijan?

“When the world comes to COP29 in Azerbaijan, we want everyone to focus on our moral duty and collective interest to confront the climate crisis,” state the closing remarks of the first official letter of COP29 President-Designate Mukhtar Babayev. The expectations for the COP29 Azerbaijan climate conference in November are higher than ever, with crucial points such as new climate financing mechanisms and nationally determined contributions to make the agenda. However, there are worrying signs that parties could fail to progress on phasing out fossil fuels – the most important measure to curb emissions and tame the climate crisis.

Key Priorities on the Agenda of COP29 2024 Climate Conference

The COP29 presidency has clarified that climate financing will be at the top of the conference agenda. While this is a crucial and much-needed discussion area, it shouldn’t take the attention away from the commitment of moving away from fossil fuels. Yet, so far, the signs are that climate finance pledges, usually non-binding and rarely distributed to those needing the most, could again serve as a wildcard to continue doing business as usual.

NCQG and New Climate Financing Goals

In 2009, developed countries pledged to provide USD 100 billion annually in climate financing to developing nations by 2020 to help their energy transition and climate change adaptation. The promise remained unfulfilled until 2022, at least according to developed countries and the OECD, which estimated the funding provided that year to be around USD 116 billion. However, according to Oxfam, rich nations overstated the actual amount of financing provided by up to USD 88 billion due to most of it coming as loans.

At COP29 2024, dubbed the “finance COP,” representatives will gather to set a new global climate finance target for the first time in 15 years. The new collective quantified goal (NCQG) is a climate financing mechanism expected to come into force from 2025 onwards to replace the expiring USD 100 billion commitment.

NGOs have estimated that low-income countries need at least USD 1 trillion in financial support to deal with the climate crisis. India also urged developed nations to use the NCQG to pledge at least USD 1 trillion annually to meet the needs of developing countries. However, according to some analysts, the actual financing needed to achieve the Paris Agreement target and address climate change could be even higher, reaching up to USD 6 trillion annually.

While exact numbers haven’t been discussed yet, and countries are expected to agree on the new climate finance targets directly at UN climate change conference Baku, any potential agreement wouldn’t be close to the needed numbers. Developed countries have so far only acknowledged that financing should be higher than the previous USD 100 billion goal but haven’t specified by how much. 

Furthermore, accelerated discussions and increased calls to the private sector to provide more financing for climate change adaptation and mitigation are also expected.

However, delegates must also progress on discussions not only in turning up the financing from billions into trillions but also on prioritising grants instead of loans to avoid burdening developing countries with additional unsustainable debt. It is also critical to specify the time frame and terms of capital provision and a plan on how the funding will reach those needing it the most.

Adaptation, Loss and Damage at COP29 2024

At 2024 United Nations Climate Change Conference COP29, vulnerable countries are likely to push for increased support to address the irreversible impacts of climate change. The United Nations Environment Programme (UNEP) estimates the adaptation financing needs of developing countries to be up to USD 415 billion annually by 2030 and USD 1.7 trillion in 2050. The expected total loss and damage funding needs also top USD 580 billion annually by 2030 and USD 1.7 trillion by 2050.

Yet, there was little progress on loss and damage at the Bonn climate conference. At COP29, the topic will likely be secondary to the bigger issue of agreeing on a new climate financing mechanism.

In the lead-up to COP29, the Board of the Loss and Damage Fund, established at COP27 and expected to start providing financial support in 2025, held a series of meetings to speed up its full operation. The COP29 presidency announced it would urge participating states to make additional contributions and actively work with the donor countries to turn its USD 800 million in pledges into tangible funding.

The COP29 presidency also promised to focus on scaling up financial support and assistance for small-island developing countries, including helping them achieve their sustainable development goals (SDGs), enhancing their adaptive capacity, strengthening resilience and reducing vulnerability to climate change. The government of Azerbaijan declared its ambition to allocate USD 10 million to support and fund projects in those areas for at least five years.

Setting the Stage for the 2025 NDC Updates

Countries should provide updated nationally determined contribution (NDC) targets by February 2025 and will have a time frame for implementation until 2035. In many aspects, they will indicate whether the world will succeed in averting the worst impacts of the climate crisis.

COP29 won’t focus specifically on NDCs, but the conference falls at the start of the submission window. While many governments may opt to hold back and see their peers’ progress, the expectations are that the previous hosts Brazil and the UAE as well as Azerbaijan – collectively known as the “troika” – will set the tone with their NDC submissions. If they are ambitious, the move can create momentum and put the spotlight on the biggest emitters, including China, the US, India and the EU.

However, so far, the signs aren’t positive. Brazil, Azerbaijan and the UAE collectively plan to increase their oil and gas production by 33% by 2035. This contradicts the IEA’s 2021 call to stop building new oil and gas projects to achieve net zero by 2050 and limit warming to 1.5°C. The troika’s fossil fuel plans have already attracted criticism from frontline communities from climate change-affected countries.

Other Topics Where Traction Is Expected

Global leaders are also likely to discuss stricter taxation, including on maritime emissions, fossil fuel extraction, frequent flyers and billionaires. The prospective funds collected could be channelled into climate finance.

Discussions are also likely to cover reform on multilateral development banks as part of the Bridgetown Initiative, with a goal of tripling their annual climate and nature lending activity size by 2030.

COP29 is also expected to see discussions on Article 6 of the Paris Agreement, which covers climate action cooperation between countries and with and between businesses.

Azerbaijan announced it will also aim to scale up support for the G7’s target to increase global energy-storage capacity over sixfold from the 2022 levels, reaching 1,500 GW by the decade’s end.

What About Civil Society?

Human rights organisations warn of issues related to severe restrictions on freedoms of expression, high corruption and the targeting of opposition and the media from COP29’s host. Azerbaijan ranks as “not free” in the Freedom House’s index, which tracks political rights and civil liberties. 

Amnesty International states that Azerbaijan lacks freedom of expression, adding that authorities carry out arbitrary arrests and politically motivated prosecutions of activists, opposition leaders and academics. Human Rights Watch said that authorities in Azerbaijan made at least 25 arrests of journalists or activists in 2023, including the founder of the Climate of Justice Initiative, which aims to use COP29 to push for environmental justice in Azerbaijan, according to reports. The COP29 host also became the subject of strong criticism during the Bonn talks from human rights campaigners.

While these warnings don’t instil hope for the inclusiveness of COP29, Azerbaijani leadership can take the opportunity to turn things around. For example, COP29 promises to offer something different from COP27 and COP28, where authoritarian regimes severely restricted the participation of civil society groups. At this year’s conference, the voices of frontline community representatives are likely to be heard even louder since the summit will feature a dedicated day for civil society organisations to share their demands and express concerns.

The host also plans to launch the Baku Initiative on Human Development for Climate Resilience. The initiative aims to deliver on human development, including catalysing investment in education, skills, health and well-being, in particular for children and youth.

The COP29 presidency can also shine if it prioritises the voices of Indigenous peoples – something that has been lacking at previous COPs. Representing just 5% of the global population, these communities protect 80% of the world’s remaining biodiversity.

Fossil Fuels at COP29: A Final Breakthrough or Another Division Line?

COP28’s final text was the first to mention the need to transition away from fossil fuels and accelerate renewable energy adoption, although in a somewhat ambiguous fashion.

While leaders promised to build upon the statement in the aftermath of the conference, there has been little progress. The crucial matter wasn’t discussed during the United Nations Climate Change Conference in Bonn in June this year. According to EU officials, the efforts were blocked by the Like-Minded Group of Developing Countries (LMDCs), which includes China, Saudi Arabia and India. The LMDCs reportedly argued that the topic was outside the mandate of mitigation discussions and accused developed nations of not doing enough to reduce emissions. According to some reports, even discussing the introduction of windfall taxes as part of a “polluter pays” system outraged some petrostates.  

This does not bode well for the outcomes at COP29. Last year, after winning the COP29 presidency, Azerbaijani officials urged everyone to be “very realistic” regarding the use of fossil fuels. 

At the Bonn conference, a speech from COP29 Lead Negotiator Yalchin Rafiyev didn’t mention “fossil fuels,” “coal,” “gas,” or “oil” once. 

In his first official letter, the COP29 President-Designate Mukhtar Babayev said, “The COP29 presidency will lead by example.” Yet, the letter mentions fossil fuels only in the context of the COP28 agreement while stating that the COP29 presidency “welcomed” the G7’s commitment to submit 1.5°C-aligned NDCs and phase out existing unabated coal power generation during the first half of the 2030s.

The COP29 host earned a “critically insufficient” rating from Climate Action Tracker, which noted that the country’s current efforts could result in warming of over 4°C.

One positive is that the COP29 presidency announced a new voluntary USD 1 billion climate fund into which fossil fuel-producing companies and countries will be asked to pay. However, experts warn that this move risks opening the door for fossil fuel producers to climate-wash and make payments just so that they can continue doing business as usual. Furthermore, the USD 1 billion size of the fund pales in comparison to the USD 281 billion in profits that the world’s top five oil and gas companies earned since the start of Russia’s war in Ukraine. It is also thousands of times lower than the estimates on the amounts vulnerable countries actually need. Yet, according to the IEA, oil and gas producers account for only 1% of total clean energy investment globally. BloombergNEF cites “low returns” as the reason big oil is pulling away from renewable energy.

Another crucial area to watch out for is fossil fuel subsidies. The final text of COP28 reiterated the parties’ agreement to “phase out inefficient subsidies” but without a deadline or any concrete terms, leaving the door open to broad interpretation that allows polluters to prolong and defend their subsidy programs. Yet, addressing the matter is crucial since subsidies are reaching record levels, with fossil fuel companies receiving over USD 7 trillion in a year. According to Laurence Breton, managing director of the European Climate Foundation, the amount would have covered “three years of developing countries’ climate change investment needs”.

Toward COP29: The Most Decisive Climate Conference in History

In the words of the COP29 president, all actions should be guided by the latest science, and COP29 will be a litmus test for the Paris Agreement and global climate action. “Time lost is lives, livelihoods and the planet lost,” he wrote.

Upon the launch of the COP29 Action Agenda, he built upon previous statements, saying, “We are just one country, and we cannot solve the climate crisis alone. We seek to inspire every actor and demonstrate what is possible with commitment and determination, and we never underestimate the value of an individual contribution.”

These messages came after Azerbaijan’s President Ilham Aliyev stated earlier in the year that Azerbaijan would continue to invest in “god-given” gas.

COP29 will wrap up what is 95% likely to be the hottest year in history, taking the crown from the previous one. With unbearable heatwaves, catastrophic floods and other devastating climate impacts multiplying in frequency and severity, addressing the root of the problem is more critical than ever. Yet, the mixed signals fail to convince us that COP29 will finally have science, not fossil fuel interests, at heart.