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COP29 concluded in Azerbaijan after nearly two weeks of deliberations and negotiations. The start of the conference attracted criticism following remarks by Azerbaijan’s President, who described oil and gas as a “gift of God”. Proceedings began with a two-day world leaders’ summit, attended by around 100 global leaders. Notable absentees included Chinese President Xi Jinping, US President Joe Biden, Indian Prime Minister Narendra Modi, German Chancellor Olaf Scholz, and Brazilian President Luiz Inácio Lula da Silva. Nonetheless, the UK and Brazil, both G20 members, pledged to enhance climate actions in their respective climate strategies. Despite these commitments, the conference’s primary focus remained on climate finance.
Global carbon market and financing
Early in the conference, delegates reached an agreement on international carbon market standards under Article 6.4 of the 2015 Paris Agreement. The agreement establishes a centralised global carbon market mechanism overseen by the UNFCCC. UNFCCC Executive Secretary Simon Stiell described it as “a game-changing tool” for directing resources to developing countries, with the potential to save up to USD250 billion annually in implementing climate plans.
Climate financing, covered under Article 9 of the Paris Agreement, proved a contentious issue. The agreement obliges developed nations to provide financial support for developing countries’ climate actions and adaptation efforts.
Under the Collective Quantified Goal (CQG), nations agreed to mobilise at least USD100 billion annually from 2020 to 2025. This target was met in 2022, two years behind schedule. At COP29, a new framework was agreed upon, setting a goal of USD300 billion per year by 2035. Poorer nations have argued that these commitments remain insufficient to address the scale of required action. However, the framework also calls for collaborative efforts to scale financing to USD1.3 trillion annually by 2035, incorporating both public and private sectors.
Read: Rho’s Key Takeaways From COP28
Energy storage and clean grids
The COP29 Presidency announced a pledge to increase global energy storage capacity to 1,500GW by 2030, six times the 2022 levels, and to add or refurbish 80 million kilometres of power grids by 2040. This aligns with COP28’s Global Renewables and Energy Efficiency Pledge, which sought to triple renewable energy capacity by 2030 compared to 2022 levels. While the renewables pledge secured 118 signatories, the storage pledge was endorsed by five nations: the UK, US, UAE, Brazil, and Saudi Arabia. Several non-state actors also signed the agreement. This considered, Rho Motion forecasts that by 2030 global BESS capacity alone will be at approximately 1600GW. Considering the industry is already expanding rapidly this target is not overly ambitious.
The storage and grid commitments coincided with a pledge by 26 countries to refrain from building new unabated coal-fired power plants. Signatories included the UK, France, Canada, Germany, and Australia.
Additionally, the International Hydropower Association introduced the Global Alliance for Pumped Storage, supported by 14 countries, including the US, Indonesia, Spain, and Brazil. The initiative aims to promote pumped hydropower as critical infrastructure to aid renewable energy deployment.
Critical minerals
Critical minerals were highlighted as essential to battery production, which underpins renewable energy targets. Lithium, cobalt, and nickel were singled out as pivotal to the energy transition.
UN Secretary-General António Guterres called for stricter oversight of the critical mineral supply chain, warning of exploitation and environmental degradation. “We see a rush for resources, with communities exploited, rights trampled, and environments trashed,” he commented, adding that the mistakes of the past were being repeated in “a stampede of greed”.
This follows the COP16 biodiversity summit which advocated for a global treaty on critical mineral traceability, a proposal revisited at COP29. Colombia is expected to put forward a proposal for this at COP30 next year.
Eyes now looking to COP30 to be hosted in Brazil next year. COP30 represents the deadline for countries to submit new Nationally Determined Contributions providing the road map for decarbonisation. These submissions will be scrutinised to assess the global emissions trajectories.
More Information
For more information about COP29 and the energy transition see our research or get in touch.
Image Credit: COP29
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