Baku Climate Talks Expand Green Financing but Fail to Tackle Fossil Fuel Phase-Out

The COP29 climate summit concluded in Azerbaijan’s capital with an agreement to triple annual green financing to $300 billion, marking a significant boost to climate project funding globally. However, disagreements between the countries over the abandonment of fossil fuels prevented consensus on one of the most important issues of the summit, according to the Fotbes article “The oil lobby and $300 billion of green investments: the results of the climate talks in Baku.”

Delegates from nearly 200 nations gathered in Baku from November 11 to 24 under the United Nations framework. While progress was made in adopting a unified framework for voluntary carbon markets and securing financing commitments, the failure to agree on fossil fuel reductions underscored deep-seated geopolitical and economic tensions.

The talks were overshadowed by the presence of fossil fuel industry representatives, with over 1,700 lobbyists attending, sparking accusations of undue influence. Critics argued this mirrored the COP28 summit in Dubai, where similar concerns were raised about the role of hydrocarbon-dependent host nations.

A key achievement of COP29 was the adoption of a mechanism to regulate voluntary carbon markets, expected to stabilize and potentially increase carbon credit prices. Experts believe this could incentivize corporations to invest in emissions-reduction projects, particularly in developing countries.

Moreover, the annual climate finance commitment from developed nations will rise from $100 billion to $300 billion, with a target of $1.3 trillion by 2035. The funds aim to support developing countries in combating climate change, though they remain far below the $2.4 trillion to $6 trillion annually estimated as necessary by various expert groups.

China, the world’s largest greenhouse gas emitter, opted out of the collective financing mechanism, favoring bilateral agreements instead. Its green investments are accounted for within the pledged $1.3 trillion, a move welcomed by some but criticized for potential fragmentation of global efforts.

The summit was not without controversy. Human rights concerns, logistical challenges, and security measures drew scrutiny. The absence of women in the initial organizing committee contradicted the principles of sustainability and inclusivity, leading to a late-stage correction. Furthermore, reports of poor public transport conditions in Baku contrasted with the fleet of 160 electric buses provided for summit attendees.

A last-minute scandal involving unapproved edits to the final document by a Saudi delegate further marred the proceedings. The edits, targeting language on fossil fuel phase-outs, were removed following pushback from other delegations.

Azerbaijani President Ilham Aliyev’s defense of oil and gas investments drew sharp criticism from climate advocates. His statements, framing hydrocarbons as a “gift from God,” highlighted the deep divide between oil-producing nations and proponents of a swift transition to renewable energy. Despite these tensions, no agreement was reached on timelines or strategies to phase out coal, oil, and gas.

While COP29 marked progress in financing and carbon market regulation, significant challenges remain. Corruption and inefficiencies in developing countries could hinder the effective use of climate funds. Experts warn that without robust oversight mechanisms, much of the pledged financing could fail to reach its intended targets.

As the world moves toward COP30, the spotlight remains on how nations will address these lingering issues and whether a global consensus on fossil fuel reductions can be achieved. For now, the Baku summit underscores the complexities of balancing economic interests with the urgent need to combat the climate crisis.