COP preview: managing expectations

Last December’s COP 28 preceded confirmation that 2023 was the warmest year in history, and 2024 recorded the warmest summer ever. The UN WMO¹ estimates these records will be broken in the next few years, underscoring that acting to limit global temperatures remains critical.

Against this backdrop, COP 29 is being described as the “finance COP”, where the hope is that earlier discussions on the role of finance and Article 6 of the Paris Agreement – where countries can transfer carbon credits to help other countries meet climate targets² – can be tightened into a clarification of a financing framework for transition to a 1.5°C world.

However, expectations appear modest for COP 29. The SB60 hosted in Bonn³, where technical details are discussed before the conference, was widely considered as disappointing. The UN Climate Change Secretary highlighted a “very steep mountain to climb to achieve ambitious outcomes in Baku” – the location of COP 29.

Climate finance discussions will likely centre on supporting the most vulnerable economies, seeking an agreement on a new collective quantified goal and on how to finance the Loss and Damage⁴ Fund. At the same time harmonising almost 50 regions’ sustainability taxonomies into a single framework, and mandatory sovereign disclosures are relevant debates to channel capital flows.

With that in mind, we look forward to hearing the impact of a five-yearly series of “global stocktakes”⁵ introduced at COP 28. The outcome of the first global stocktake will inform sovereigns’ updates to their climate action plans (known as Nationally Determined Contributions). These will be communicated in 2025 providing a 10-year plan to 2035.

The location of the conference is likely to be a talking point again, given oil and gas accounts for 47.8% of Azerbaijan’s GDP, and the President of Azerbaijan, Ilham Aliyev, has declared the intention to continue expanding developing gas activities. Meanwhile, six of the G7 countries pledged this year to phase out unabated coal power production in the first half of the 2030s. That said, the country has announced a series of initiatives to decarbonise its energy mix, especially around hydrogen, which makes sense given the country’s gas reserves.

Two topics that are gaining traction stand out on this year’s agenda:

• Health: this was a central issue at COP 28, with its first dedicated day at the conference and a Ministerial Declaration on Climate and Health endorsed by over 140 member states. As new record temperatures and impacts from climate change put further pressure on an already burdened global health system, we expect this topic to be even more prominent this year.
• Technology: interest in financing climate solutions at COP 28 was evident, as highlighted in our sustainability themes for 2024. Perhaps creating carbon capture technologies is considered easier than achieving the behavioural change needed for a meaningfully lower footprint. Investments in climate technologies have steadily increased over the last decade through volatile markets, and now account for approximately 10% of all venture capital deal activity.⁶ If COP 29 can further accelerate and scale up funding for climate solutions, this will help reduce a challenging funding gap. A whole day dedicated to science, technology and innovation could springboard the next wave of climate solution investments. The explicit addition of digitalisation to the agenda, for the first time, signals a clear recognition of its power and the will to leverage it as a catalyst for achieving net zero.