The agreement, reached under Article 6 of the Paris Agreement, unlocked international carbon markets, a milestone that had eluded previous COPs for over a decade.
"We have ended a decade-long wait and unlocked a critical tool for keeping 1.5 degrees in reach," said COP29 President Mukhtar Babayev. "Climate change is a transnational challenge, and Article 6 will enable transnational solutions."
With the agreement, carbon markets are poised to drive substantial investment in developing countries, ensuring transparency and environmental integrity. The newly adopted rules will facilitate real, additional, and measurable emission reductions while respecting human rights and promoting sustainable development.
COP29 also achieved a breakthrough agreement to triple public climate finance for developing countries, raising the annual target from USD 100 billion to USD 300 billion by 2035.
Additionally, resolutions were adopted to ensure collaborative efforts among all stakeholders to scale up climate finance for developing nations from public and private sources, targeting USD 1.3 trillion annually by 2035.
Known formally as the New Collective Quantified Goal on Climate Finance (NCQG), it was agreed after two weeks of intensive negotiations and several years of preparatory work, in a process that requires all nations to unanimously agree on every word of the agreement.
"This new finance goal is an insurance policy for humanity, amid worsening climate impacts hitting every country," said Simon Stiell, Executive Secretary of UN Climate Change. "But like any insurance policy â€" it only works if premiums are paid in full, and on time. Promises must be kept, to protect billions of lives."
"It will keep the clean energy boom growing, helping all countries to share in its huge benefits: more jobs, stronger growth, cheaper and cleaner energy for all."
The International Energy Agency expects global clean energy investment to exceed USD 2 trillion for the first time in 2024.
UN said the new finance goal at COP29 builds on significant strides forward in global climate action at COP27, which established a historic Loss and Damage Fund, and COP28, which delivered a global agreement to transition away from all fossil fuels in energy systems swiftly and fairly, triple renewable energy, and boost climate resilience.
Stiell also acknowledged that the agreement reached in Baku did not meet all Parties' expectations, and substantially more work is still needed next year on several crucial issues.
'No country got everything they wanted, and we leave Baku with a mountain of work to do,' said Stiell. 'The many other issues we need to progress may not be headlines, but they are lifelines for billions of people. So, this is no time for victory laps; we need to set our sights and redouble our efforts on the road to Belem.'
Wycliffe Nyamasege
