Delegates gathered in Baku, Azerbaijan, for this year’s UN Climate Talks amid one of the hottest years on record, as global temperatures surpassed the critical 1.5°C warming threshold. COP29 saw slow and incremental progress over its two-week duration, hindered by significant socioeconomic and political challenges. For another consecutive year, the Conference, billed as the Finance COP, extended into the weekend, with Parties under pressure to reach an agreement on the New Collective Quantified Goal (NCQG)—a new financial target designed to support developing countries in their climate efforts. Developing nations, seeking to bridge the vast climate finance gap, called for a deal in the trillions, not billions.
Ultimately, the NCQG, which was announced Sunday, faced criticism for its lack of ambition and clarity. While the target was tripled from $100 billion to $300 billion annually, it still falls well short of addressing the $1.3 trillion funding gap outlined in the Standing Committee on Finance's (SCF) Second Needs Determination Report (NDR). The NCQG relies on diverse sources of financing (public, private and multilateral), complicating efforts to ensure sufficient support for developing countries, as private finance is not guaranteed. Developing nations raised concerns about insufficient funding commitments, ongoing debt crises and the continued reliance on loans rather than grants.
As attention turns to next year’s crucial climate talks in Brazil, we highlight the key outcomes of COP29 in relation to carbon markets, climate finance and methane mitigation.
The Good:
During COP29, CCAP launched two new publications and presented them during side events: the ICAT Climate Finance Transparency Guide and the Progress Report on the Operationalization of Article 6 in Latin America. The Guide offers step-by-step methodological support for policymakers, helping them to create and implement national climate finance transparency frameworks. It focuses on collecting data on financial needs and flows while ensuring alignment with the Paris Agreement’s enhanced transparency framework. The Progress Report highlights the current state and progress of implementing Article 6 cooperative approaches and identifies key regional needs and priorities. The research is based on extensive interviews with national leaders from 7 countries tasked with Article 6 implementation.
The “Reducing Methane from Organic Waste Declaration” was launched, with over 30 countries and states among the initial signatories, collectively representing nearly 50% of global emissions from organic waste. These signatories are committed to establishing sector-specific methane reduction targets within their future Nationally Determined Contributions (NDCs), including 7 of the 10 largest methane emitters from organic waste. They also pledged to implement concrete policies and action plans to achieve these targets. The Declaration highlighted methane reduction as an effective, high-impact solution with immediate climate and air quality benefits. Developed nations committed to providing both technical and financial support to help low- and middle-income countries adopt waste-to-energy projects and modernize waste management infrastructure.
Governments and philanthropic organizations announced nearly $500 million in new grant funding for methane abatement, bringing total grant funding mobilized under the Global Methane Pledge to over $2 billion. Building on this grant support, international financial institutions showcased billions in additional methane-related project investments.
During the COP29 Global Methane Pledge Ministerial, eight Latin American countries made major announcements to include methane emissions reductions from the waste sector in their new NDCs (Brazil, Colombia, Costa Rica, Guatemala, México, Panamá, Perú and Chile). In Latin America, organic waste represents nearly 50% of the total waste stream.
Azerbaijan, Tajikistan, Guatemala and Madagascar joined the Global Methane Pledge in 2024, bringing the total members to 159 plus the European Commission.
COP29 achieved a significant milestone with the launch of Article 6.2 and 6.4 mechanisms, providing a framework for bilateral carbon credit transfers and global market-based mechanisms. This step has the potential to unlock financing for both mitigation and adaptation efforts worldwide. Additionally, countries now have clearer guidelines for trading emissions reductions, which could enhance transparency and accountability in carbon markets.
The world’s leading multilateral banks committed to boosting climate finance to low- and middle-income countries, aiming to reach $120 billion annually by 2030. This new target represents a more than 60% increase compared to the amount the group of 10 multilateral development banks provided to these nations last year.
The Loss and Damage Fund has became fully operational, as the working modalities of the Fund were agreed upon. The Fund aims to provide financial assistance to countries most vulnerable to the impacts of climate change. To date, the total pledged financial support for the Fund is over $730 million.
The United Kingdom announced it will cut its greenhouse gas emissions 81% by 2035 compared to 1990 levels as part of its national climate commitment under the Paris Agreement. Additionally, the UK launched a “global clean power alliance” at the G20, with Brazil, Australia, Canada and France among members.
Also, Brazil launched a new ambitious NDC that aims to cut greenhouse gas emissions by as much as two-thirds by 2035 compared to 2005 levels. Brazil's submission is closely monitored, given its status as one of the world's largest economies and a top-10 emitter both annually and historically. Additionally, it is the most biodiverse country on the planet, home to tens of thousands of animal and plant species. Brazil’s fresh ambition sends positive signals to other countries preparing their NDCs, as the UN Climate Talks prepare to head to Belém next November.
Although the NCQG currently falls well short of the $1.3 trillion target, it does state that the COP Presidencies will lead the “Baku to Belém Roadmap to 1.3T” to make progress towards that aim, scaling up climate finance through grants, concessional and non-debt creating instruments.
The Bad:
The Global Stocktake (GST) revealed that current NDCs and policies are far from sufficient to meet the 1.5°C target. This gap underscores the urgency of increasing ambition, especially from high-emitting countries, but there was little indication of how this would be achieved. There is a lack of binding commitments from the GST. While the GST identified clear areas for improvement, there are no mechanisms to enforce the findings. This creates uncertainty about whether countries will act on the insights provided, risking continued misalignment with the Paris Agreement goals. Additionally, Countries failed to reach an agreement on how the outcomes of last year’s “Global Stocktake,” including a key pledge to transition away from fossil fuels, should be taken forward.
Governments have approved a troubling set of carbon market rules under Article 6, which may hinder, rather than enhance, efforts to reduce emissions. The rules are overly complex and fall short in terms of accountability, transparency and integrity.
Countries such as those in the African Group and Small Island Developing States (SIDS) noted the absence of a clear mechanism for addressing loss and damage within the NCQG text. The gap between pledged and delivered finance remains a significant challenge. Subsequently, the operationalization of the Loss and Damage Fund, while symbolic, has yet to scale up in terms of funding and implementation. There is still uncertainty about how this fund will meet the growing financial needs of countries facing climate-induced disasters.
The NCQG’s proposal is not a floor but a cap that severely stagnates climate action efforts. It is an investment goal that stands at a fraction of $1.3 trillion that is needed to effectively protect our world from the most catastrophic impacts of climate change, backed by scientific evidence.
The NCQG fails to set a more ambitious target than the previous inadequate $100 billion goal. When adjusted for inflation, the $300 billion target by 2035 is essentially equivalent to the original $100 billion objective. Additionally, the text overlooks the requested minimum funding floors for SIDS and Least Developed Countries (LDCs), which sought at least $39 billion for SIDS and $220 billion for LDCs.
Negotiations failed to endorse the Australian bid for the right to host COP31. The decision will now be made in June during the Bonn Conference. The seven-month delay risks a less ambitious summit in 2026 because it takes time to build consensus for global initiatives.
The Ugly:
At the summit, OPEC Secretary General Haitham Al Ghais described oil and gas as a "gift from God," according to Reuters, echoing a statement made by Azerbaijani President Ilham Aliyev the previous week.
Elnur Soltanov, Azerbaijan’s deputy energy minister who is also the COP29 chief executive, was caught on camera encouraging fossil fuel deals ahead of the climate summit, placing a cloud over the discussions from the very beginning.
As the host of the COP29 summit, Azerbaijan openly showcased its natural gas resources and highlighted new commercial agreements with several European countries. President Ilham Aliyev even held a signing ceremony for one of these deals on the sidelines of the conference.
Negotiations were at times overshadowed by the reelection of U.S. President-Elect Donald Trump, who has vowed to reverse climate action and withdraw the world’s largest historical emitter from the Paris Agreement once more.
At least 1,773 coal, oil and gas lobbyists were granted access to COP29, serving as yet another contentious distraction to the negotiations. According to the Guardian, lobbyists outnumbered the delegations of almost every country at the conference.
The NCQG highlights the specialized needs and circumstances of SIDS and LDCs but says "such as LDCs and SIDS,” which implies that there are other groups with extreme conditions. This is not the case and can misconstrue who the prioritized recipients of climate finance under the NCQG actually are.
The NCQG only includes adaptation, mitigation and transparency. It excludes loss and damage, which is critical. It has language on loss and damage, only found in the preamble of the text.
The NCQG invites developing Parties to voluntarily contribute to bilateral climate finance. Although it's voluntary, it is taking the attention and accountability away from those actually responsible: developed Parties.
Looking Ahead:
While the outcomes of this COP left many feeling disillusioned and disappointed, countries remain optimistic for the next round of climate talks that will take place in Belém, Brazil a year from now. The 1.5°C target, set nearly a decade ago, now faces a significant threat. However, there is hope that the ambition demonstrated by the host country of COP30 will inspire others to rise to the challenge and fight for the future of our planet.
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CCAP’s mission is to support every step of climate action, from ambition to implementation. A recognized world leader in climate policy and action, CCAP creates innovative, replicable climate solutions, strengthens capacities, and promotes best practices across the local, national, and international levels to accelerate the transition to a net-zero, climate resilient future. CCAP was founded in 1985 and is based in Washington, DC.