The COP29 presidency of Azerbaijan recently announced the Baku Finance Goal (BFG), a new commitment to channel $1.3 trillion of climate finance to the developing world each year. Success on the COP29 presidency’s top priority for the UN Climate Summit marked a significant uplift from the previous climate finance goal of $100 billion and will unlock a new wave of global investment.
The Baku Finance Goal includes a core target for developed countries to take the lead on mobilizing at least $300 billion per year for developing countries by 2035. This represents a $50 billion increase from the previous draft text and is the product of 48 hours of intensive diplomacy by the COP29 presidency. It also pays special consideration to support the least developed countries and small island developing states, with provisions on accessibility and transparency.
“The Baku Finance Goal represents the best possible deal we could reach, and we have pushed the donor countries as far as possible. We have forever changed the global financial architecture and taken a significant step towards delivering the means to deliver a pathway to 1.5C,” stated COP29 president Mukhtar Babayev.
Critical milestone in delivering a pathway to 1.5C
The Baku Finance Goal is the centerpiece of a package of agreements that deliver progress across all climate pillars. These breakthroughs are the result of months of intensive diplomacy by the Azerbaijani presidency to deliver some of the most complex and controversial tasks in multilateral climate action. They mark a critical step in putting in place the means to deliver a pathway to 1.5C.
“The years ahead will not be easy. The science shows that the challenges will only grow. Our ability to work together will be tested. The Baku breakthrough will help us weather the coming storms,” added Babayev.
COP29 ended the decade-long wait for the conclusion of Article 6 negotiations on high-integrity carbon markets under the UN. Financial flows from compliant carbon markets could reach $1 trillion per year by 2050. They also have the potential to reduce the cost of implementing national climate plans by $250 billion per year. When combined, the Baku Finance Goal and Article 6 will forever change the global climate finance architecture by redirecting investment to the developing world.
Fund for Loss and Damage launched
The COP29 presidency also succeeded in getting the Fund for Loss and Damage up and running and ready to distribute money in 2025. This decision was long awaited by developing countries, including small island states, least developed countries, and African nations. This aligns with the priority of the president of the Republic of Azerbaijan, Ilham Aliyev, to address the challenges of climate change and their impact on small island states under the COP29 presidency.
“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,” added Babayev.
Key COP29 achievements
Among the most notable achievements that the world witnessed at COP29 include:
Baku Initiative for Climate Finance, Investment and Trade (BICFIT) Dialogue
The COP29 presidency brought UN agencies, international organizations, multilateral development banks, multilateral climate funds, the private sector, civil society, key coalition, and other stakeholders, alongside COP presidencies and parties together to ensure that finance, investment, and trade remain at the center of the climate agenda. COP29 also announced the new Baku Climate Coalition for SMEs Green Transition.
The COP29 presidency also launched its pledges and declarations on energy storage, grids, zones, corridors, and hydrogen, which received endorsement by 150 parties.
COP29 Declaration on Green Digital Action
More than 75 governments and over 1,100 members of the digital tech community endorsed the declaration to use digital tools to reduce emissions and strengthen climate resilience.
Baku Initiative on Human Development for Climate Resilience
A joint statement among eight UN agencies, three MDBs, and three climate funds, saw the adoption of the Baku Guiding Principles on Human Development for Climate Resilience and established the Baku COP Presidencies Continuity Coalition for Climate and Health.
Moreover, five COP presidencies (COP26 to COP30), alongside the WHO Director-General, embedded health into the climate agenda. They advocated for health to be a core feature of future COP conferences by introducing the Baku COP Presidencies Continuity Coalition for Climate and Health.
Reducing Methane from Organic Waste Declaration
Over 50 countries, including eight of the world’s 10 largest organic waste methane emitters and representing 51 percent of global methane emissions from organic waste, endorsed the declaration committing to sectoral targets to reduce methane from organic waste within future NDC, which will contribute to the implementation of the Global Methane Pledge.
Baku Harmoniya Climate Initiative for Farmers
COP29 also launched a platform that brings together the landscape of existing climate initiatives in the field of food and agriculture to make support for farmers easier to find and to facilitate access to finance.
COP29 Declaration on Enhanced Action in Tourism
The declaration commits more than 60 government endorsers to promote sustainable tourism practices by reducing emissions and increasing resilience in the sector, ultimately positioning tourism as a key component of climate solutions.
COP29 Declaration on Water for Climate Action
With endorsers from over 50 countries, this declaration will take an integrated approach to combating the causes and impacts of climate change on water basins and water-related ecosystems. It advocates for the integration of water-related mitigation and adaptation measures in national climate policies, including NDCs and NAPs.
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Climate finance pledges
During COP29, Multilateral Development Banks (MDBs) announced projections for their contributions to climate action at $170 billion per year by 2030, with $120 for low- and middle-income countries.
COP29 also positioned the fund for responding to Loss and Damage to be ready to distribute funds in 2025 by securing contributor agreements and pledges. The largest contributions made during COP29 came from Australia and Sweden. Total pledges to the fund to date have surpassed $730 million.
In addition, COP29 brought together over 1,000 private and philanthropic leaders from more than 70 countries at the Business Investment and Philanthropy Climate Platform (BIPCP) where investor groups with over $10 trillion in assets united to deploy private capital into climate markets.
Pledges to climate finance projects and initiatives also totaled $7.3 billion on Finance, Investment, and Trade Day. The largest support came from the Asian Development Bank ($3.5 billion), the Azerbaijani banking sector ($1.2 billion), Sweden ($760 million) and Canada ($1.5 billion from the Canadian government and $290 million from philanthropies).
With Germany’s pledge of $65.1 million and Ireland’s pledge of $13 million, contributions to the adaptation fund reached $133 million.
Moreover, Climate Investment Funds increased, collecting additional contributions from the US ($325 million), Germany ($220 million), and the UK ($211 million). Meanwhile, 25 countries and the European Union indicated their intentions to put forward national climate plans that reflect no new unabated coal in their energy systems and issued a call to action for others to do the same.
Mexico also announced its commitment to net-zero emissions by 2050, meaning all G20 members have committed to a net-zero target. Finally, the UK government pledged £239 million ($299 million) to tackle deforestation, including money to support the development of high-integrity forest carbon markets.
