Baku’s big test: What to expect at COP29 this year

It’s that time of the year again. In about two months, world leaders will meet to discuss the most pressing issue of climate change and mobilise solutions for the same.

The Conference of Parties (COP) is the United Nations’ annual conference on climate change. Its 29th meeting, COP29, is scheduled to begin November 11, 2024, in Baku, Azerbaijan— land of ”the worlds’ first oil town”.

This is held under the United Nations Framework Convention on Climate Change (UNFCCC)— an international treaty to address climate change. The first COP was held in Berlin in 1995. Last year’s COP28 was held in Dubai.

Major climate agreements like the Kyoto Protocol (1997), the Paris Agreement (2015), establishing a Loss and Damage fund (2022), etc. are a result of these annual talks.

The formal negotiations that serve as the foundation for the decisions made at the conference typically occur throughout the year, prior to the annual meeting. Technical negotiations happen at inter-sessional meetings, which are then prepared for adoption. The two-week annual conference becomes the space to finalise and formally adopt these agreements.

At negotiations this time, the New Collective Quantified Goal (NCQG) on climate finance and Article 6 of Paris Agreement to regulate carbon trading are at the top of the agenda while the US elections loom in the background.

As one can imagine, it is no mean feat to reach consensus where so many parties—with different interests—are involved. Still, each year negotiators wade through challenges to reach a seemingly mutually acceptable decision. Before we look at what’s in store this year, a quick glance at the COP29 Presidency—Azerbaijan.

Eeny, meeny, miny, moe

Becoming COP29 host was almost a coincidence for Azerbaijan. Host countries are chosen on rotation and it was the turn of a country in Eastern Europe or the Caucasus. However, as the venue had to be chosen by consensus, Russia was able to veto the majority of proposals since it believed they opposed its invasion of Ukraine. Eventually, Azerbaijan was the only country remaining.

Azerbaijan will be the third petro state, in a row, to host the COP after Egypt (2022) and Dubai last year.

Mukhtar Babayev, the COP29 president-designate, is the minister of ecology and natural resources of Azerbaijan. He has worked in various roles for the Azerbaijan state-owned oil company State Oil Company of the Republic of Azerbaijan (SOCAR) since the 1990s—much like his predecessor Sultan al Jaber, the COP28 President, who is the head of the Abu Dhabi National Oil Company (ADNOC). In Babayev’s own words, Azerbaijan is “not famous as a green transition ideas developer”. For the country, “it is new”, he added.

Azerbaijan now has to accomplish the Herculean task of bringing other petro states like Saudi Arabia, historically big polluters like the US, and the most vulnerable nations in the world like Fiji and Vanuatu to one table, deciding the way forward. While COP28 at Dubai concluded with a call to “transition away from fossil fuel” for the first time, there’s been an increasing presence of the fossil fuel lobby at these discussions.

What’s on the table at COP29?

Like at any other table of significance, money (here, climate finance), is at the heart of COP.

CarbonCopy earlier reported that the agenda of COP29 this November is to set a new financial goal for funds for the resources that developed countries will provide to assist developing countries in their post-2025 transition to a low-carbon future. The failed commitment made by industrialised nations to provide $100 billion annually to underdeveloped countries by 2020 would be replaced by this New Collective Quantified Goal (NCQG) on climate finance. It has its own challenges, read our report on it here.

The Presidency’s vision for COP29 is to “enhance ambition, enable action” and adopting the NCQG is listed at the top of the list under enabling action.

The COP29 Presidency launched the “Climate Finance Action Fund” (CFAF), to receive annual contributions from fossil fuel-producing countries and companies. Initial fundraising aims for $1 billion, with members committing to annual contributions as fixed sums or based on production volume.

It has become clear that private players need to enter the scene to mobilise more and more climate finance. Carbon market is one way to do that. Article 6 of the Paris Agreement sets out the rules for global trade in greenhouse gas emissions reductions. While COP28 brought no significant progress on the matter, expectations are that some development will be achieved on this front.

Last year, for a number of technical reasons, Parties were unable to agree on either Article 6.2 or Article 6.4. The final text featured disagreements between numerous nations over carbon removals, transparency, and climate ambition. Azerbaijan hopes to use COP29 “to discuss Article 6 to help find common ground and continue constructive momentum”.

Countries are due to submit their Nationally Determined Contributions (NDCs) next year. A functional Article 6 can contribute towards financing these targets. The COP29 presidency also aims to “fully operationalise the Fund for responding to Loss and Damage” in November this year.

The ambitions are high, indeed. What could possibly stop the strongest and most powerful people on the planet to achieve these goals? A couple of things.

Demand for a bigger contributor base, US elections

While at the centre of the negotiation, climate finance is also the most sticky territory. Calls from the Global North are growing to expand the contributor base for climate finance, asking emerging economies like China and Saudi Arabia to pay for climate action. An analysis last year found that some developing countries, including India, China and Brazil, already contribute more climate-related finance through multilateral development banks than many countries in the Global North.

The impending US elections later this year could further compromise the process. The US, under Donald Trump, pulled out of the 2015 Paris Agreement in 2020.

The annual G20 meet is also scheduled around the same time. G20 leaders, along with the African Union, will meet in Rio de Janeiro, Brazil, on November 18th and 19th, 2024—during the second week of COP29. It is the second week where negotiation frenzy comes to the fore and hard battles are fought over every word. Clashing timelines may mean absence of political leaders who’d rather be at the G20. The G20 can get more political because it is not governed by UNFCCC procedure rules. So decisions made there could have implications for the climate talks in Baku.

Earlier this year, at the G20 finance ministers and central bank governors meeting, Brazil, Germany, Spain, and South Africa signed a motion for a fairer tax system to deliver £250 billion a year extra to fight poverty and climate crisis. These agreements will spillover and influence how decisions are formed at COP29.

In about two months, negotiators with a gamut of interest will come face to face. There’ll be words. Too many of them as the world awaits action.

Compared to its predecessors in Dubai, Baku is quieter. The drumroll hasn’t yet begun. Or if it has, it isn’t very loud. However, the table has been laid out and it looks full. Only time will tell how it will be cleared.