COP talks to see powerful calls
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The 29th UN Climate Change Conference, COP29, kicks off in Baku, Azerbaijan this week.
The event could have far-reaching implications for the global energy sector.
While past climate conferences have drawn attention for their ambitious targets and calls for action, COP29 has been dubbed the ‘Finance COP’.
Leaders are expected to focus heavily on how to fund the global transition to cleaner energy, with a renewed emphasis on meeting financial promises.
COP29’s central agenda item will be setting a new target for climate finance - funds primarily from wealthy countries intended to support the clean energy transition in less affluent nations.
In 2009, developed countries committed to providing US$100 billion annually, but they have consistently missed the mark. This time around, there is talk of a new, much larger goal.
“Countries must now reach an agreement that reflects the urgency of the climate crisis,” the UN said in the lead up to the event.
Many experts hope this new finance target, which may include separate streams for public and private investments, will boost funding in the renewable energy sector.
To date, only $700 million has been set aside to address the costs of climate damage in developing nations - a sum vastly short of the estimated US$580 billion needed by 2030.
For some countries, COP29 will serve as a stage to announce updated national climate commitments, or “nationally determined contributions” (NDCs).
These targets, required under the Paris Agreement, are due for renewal in 2025, and nations like Brazil, the UK, and the UAE are expected to unveil theirs early.
If these new commitments are substantial, they could push other countries to strengthen their own goals.
The hope is that NDCs will include specific targets for the energy sector, encouraging faster transitions from fossil fuels to renewable energy sources.
Carbon trading, a mechanism intended to help nations meet their climate targets, is also up for discussion at COP29.
Despite years of negotiations, countries are still struggling to agree on how carbon markets should operate.
Proponents argue that a well-functioning carbon market could boost the energy transition by providing funds to renewable projects in developing countries. But if poorly designed, these markets can be seen as more of an excuse for inaction.
Major issues - including how carbon credits will be verified and what environmental safeguards should apply - are yet to be resolved.
More details are accessible here.
