COP29 – half-way update

This article was co-authored by Harriet Salisbury, Charlie Bevis and Olukoyinsola Onakomaiya.

Introduction

COP29 began this week in Baku, Azerbaijan with momentum.

Ensuring that Article 6 becomes operational in the near future was a major priority for this COP (given limited progress at previous COPs) and, despite some reservations as to the process used, encouraging headway was made on the first day of COP29 with respect to Article 6.4.  Notable contributions to the Fund for Responding to Loss and Damage has similarly brought promising progress. 

However, there has been little development to date, and still much to resolve, on the topic of climate finance, which was the headline priority for this COP, colloquially known as the “Finance COP”.

Article 6 negotiations and carbon market progress

The first day of the COP29 displayed signs of early progress as the Parties to the Paris Agreement (Parties) ‘adopted’ the standards for project methodologies and carbon removals agreed by the Supervisory Body¹ in early October. This lies in stark contrast to how the negotiations regarding Article 6.4 unexpectantly fell through at COP28.

This year the Parties used a procedurally unconventional approach. Rather than providing their recommendations to the COP serving as the meeting of Parties (a governing body for approval), the Supervisory Body adopted the recommendations as two standards. Further, the Supervisory Body requested that the Parties ‘endorse’ the approach and provide any additional guidance.

While this signifies progress towards an Article 6 carbon market, further work is still required to achieve the full implementation and therefore operationalisation of Article 6.4. Once operational, it appears likely that selected Clean Development Mechanism methodologies such as renewable energy and biomass waste to gases, will be the first to be approved and thereby become Article 6.4 methodologies.

The Parties also re-commenced Article 6.2 negotiations on Tuesday, discussing a number of key issues including the nature of the international registry, authorisation, reporting and accounting. The manner in which the Article 6.2 international registry will operate is a particularly vital point due to how Parties must decide on its interaction with the 6.4 mechanism registry. The nature of the international registry has still not been agreed and negotiations continue around the form the registry will take i.e. will it be a fully-fledged transactional registry or a database of aggregate amounts reported by Parties.

Another question that is front of mind, is how will the operationalisation of Article 6 interact with the voluntary carbon market? Whilst it is foreseeable that the two carbon markets could become integrated, it is still too soon to tell to what extent this may occur. 

Next round of Nationally Determined Contributions (NDCs) 

Parties are requested to submit their NDCs every five years to the UNFCCC Secretariat. The next round of NDCs is due for submission in early 2025 ahead of COP30. 

On Tuesday, COP29 President Mukhtar Babyey called for countries to submit their next round of Nationally Determined Contributions early, ahead of next year’s deadline of early 2025. 

UAE and Brazil were the first two countries to share their updated NDCs. UAE has committed to achieve a greenhouse gas emissions reduction target of 47% by 2035 from its 2019 levels, whereas Brazil has committed to a reduction by 59% to 67% below 2005 by 2035. 

Meanwhile, the United Kingdom’s Prime Minster on Tuesday pledged an 81% cut to emissions by 2035 compared to its 1999 levels. 

We understand that Australia is unlikely to submit its NDC before the next Federal election. At a panel session on Wednesday, Chair of the Climate Change Authority Matt Kean, said that Australia will put forward an NDC target that is “science aligned, ambitious but achievable.”

Loss & Damage

The Fund for Responding to Loss and Damage (Fund) was agreed at COP27 and formally established on the first day of COP28. It stands as a measure to help countries that are most vulnerable to climate change’s devastating impacts.

Numerous governments stepped forward to pledge to the Fund following its initial adoption. This year’s COP has witnessed the milestone of having key documents signed which enable the Fund to now receive essential financing. 

On Tuesday, Sweden pledged an additional 200M kr (approximately AUD$28M), subject to government approval.
The Fund is expected to begin financing projects from 2025. 

New Collective Quantified Goal (NCQG)

Finally, there has been little progress with respect to the main task at COP29 – to establish a new annual climate financing target higher than the target pledged in 2009 (being to contribute $100 billion a year until 2020 to support developing countries).  

The purpose of this finance goal is to direct funding to developing countries to assist with both mitigation and adaptation.  Estimates of what is required range from $1 to $2 trillion per year.

To put what is required into context, a recent UN Environment Programme report estimates that developing countries require around $1 billion per day to deal with the current impacts of climate change, whereas they currently receive only around $75 million per day.

There is much expectation around the need to land the NCQG, with Simon Stiell, Executive Secretary to the UNFCCC stating “COP29 must be the stand-and-deliver COP, recognising that finance is core business to save the global economy and billions of lives and livelihood from rampaging climate impacts”.

The current text for this track of the negotiations currently stands at 33 pages, with the expectation that it will need to be reduced to about two pages, so there is still much work to do on this topic.

We expect to see more progress next week as Ministers who have the authority to compromise and find solutions on the NCQG arrive on Monday 18 November. 

Next update

Our Norton Rose Fulbright team is currently at COP29 monitoring the negotiation process. We will continue to report on the outcomes from the Conference, including Article 6.2 and 6.4 negotiations, on our COP29 portal.  We will also be holding a post COP webinar, with details to be released shortly.