COP29: Finance, Investment and Trade

An Annual Financing Target

Negotiations are ongoing with a view to reaching agreement on an annual climate financing commitment, dubbed the “collective and quantified goal”. In effect, this figure would represent the value of the annual transfer of funds from wealthier countries to poorer countries. Climate-vulnerable countries advocated for an annual USD 1 trillion in climate finance, while wealthy nations highlighted the need for major economies like China and the UAE to contribute to this fund.

The European Union proposed a "layered" financing approach that combines public and private funding , recognizing that the funds required to meet ambitious climate targets are unlikely to be met by government funding alone.

The Energy Transitions Commission estimated that achieving net-zero goals will require an annual private investment of around USD 3 trillion until 2050.

New Pledges

Alongside the negotiations about the headline figure, there were a number of notable pledges of public and private funds:

• China pledged USD 24.5 billion for climate projects in developing nations
• BlackRock and AIA collaborated with Singapore’s FAST-P initiative to create an infrastructure debt fund worth up to USD 5 billion, aiming to provide funding in Southeast Asia for high-emission industries with a transformative decarbonization strategy
• UAE committed USD 30 billion to renewable projects, partnering with ALTERRA and other international organizations to close the USD 2.4 trillion funding gap for global climate goals
• Octopus Energy announced plans to invest USD 20 billion by 2030 in offshore wind, aiming to enhance community benefits like reduced local energy costs
• The World Bank announced plans to allocate 45% of its financing (USD 42 billion) to climate adaptation and mitigation by 2025 
• Additionally, the Climate Investment Funds’ new Capital Market Mechanism, launched on the London Stock Exchange, plans to generate USD 75 billion for clean energy projects through investment-grade bonds

Trade and Carbon Standards

There was a significant development in relation to carbon credit trading, with agreement being reached on the adoption of the Carbon Credit Standards under Article 6.4 of the Paris Agreement. Carbon trading will permit countries and companies to offset emissions by purchasing “credits” such as an investment into a tree-planting project. The framework agreement paves the way for a unified market, operated by the United Nations, and an agreement on carbon pricing. Sections of the paper that discuss how carbon credits should be transferred, whether they can be revoked and how they will be monitored are still to be finalized, but the agreement represents a significant breakthrough in the establishment of a viable carbon trading market.

Conclusion

The Finance, Investment, and Trade discussions at COP29 underscored the global community’s commitment to mobilizing resources at an unprecedented scale, driven by a mix of innovative funding mechanisms, private investment, and intergovernmental collaboration.

Please remember to follow our daily COP29 updates at the link below.

COP29