COP29 President Anticipates Climate Finance Breakthrough In Azerbaijan

The road to COP29, this year’s United Nations Climate Summit in Baku, Azerbaijan, feels like the buildup to a long-awaited climax after years of polarized debate on financing climate action for the world’s most vulnerable countries. Against a global backdrop of geopolitical, economic, and social instability, the COP29 Presidency is hoping for a historic moment of renewed trust and collaboration on climate change at this year’s climate talks.

Minister Mukhtar Babayev, Azerbaijan’s Minister for Ecology and Natural Resources and the President Designate of COP29 is confident in the potential for “the Finance COP” to transform ambition into tangible action for Small Island Developing States, Least Developed Countries, Landlocked Developing Countries and other countries and regions most impacted by climate change.

He sees Azerbaijan’s COP presidency as pivotal in rebuilding trust and alignment between the global north and south through a new climate financing target sustained by developed countries. His message ahead of COP29 is clear: universal cooperation and commitment are a must.

Minister Babayev and I make plans to discuss these issues in a shaded outdoor seating area at an international development conference. He arrives punctually with his Chief of Staff, exuding an approachable demeanor and a profound awareness of global issues that extend far beyond his geographic sphere of influence.

The sweltering heat is inescapable—a poignant reminder of the climate crisis we discuss.

For the first time, global warming has surpassed 1.5°C over the course of an entire year, with forecasters predicting another year of extreme heat, following the hottest year on record. As we sit on an outdoor bench, discussing climate finance at COP29, I silently grimace at the sweat pouring down my back— a stark contrast to Mr. Babayev’s calm focus.

Mukhtar Babayev is acutely aware of the unequal global burden of climate change. In April, during the Petersberg Climate Dialogue in Berlin, he passionately reaffirmed Azerbaijan’s commitment to the Paris Agreement, stressing that failure to limit global warming to 1.5°C above pre-industrial levels would disproportionately harm vulnerable communities worldwide.

Despite his long tenure as an executive at SOCAR, Azerbaijan’s state oil company, Mr. Babayev spent much of his career addressing and mitigating the company’s environmental impacts. Over the past six years in his ministerial role and now as COP29’s President Designate, he has expanded his environmental advocacy to emphasize global inclusivity and collaboration.

“We must demonstrate that the world is ready to work together to support each other,” he asserts, expressing frustration with recent challenges achieving consensus among nations. “This is a very critical time, not only for Azerbaijan but for the entire world, to find solutions.”

The United Nations Framework Convention on Climate Change’s (UNFCCC) 60th meeting in Bonn, Germany, highlighted the ambiguity surrounding climate finance for vulnerable countries. At COP29, nearly 200 nations will strive to agree on a new financing target— the New Collective Quantified Goal (NCQG)— to replace the $100 billion annual pledge from wealthy countries to support poorer countries between 2020 and 2025 in reducing emissions and safeguarding their societies amid increasingly severe climate impacts.

UN Climate Chief, Simon Stiell described the upcoming challenges as “a very steep mountain to climb.” Babayev echoes this sentiment, emphasizing the critical task of working with other nations to increase contributions and update goals. “This is a very crucial time for the world and for our team to find solutions for NCQG,” he says.

In 2022, developed countries contributed and mobilized $115.9 billion for climate-vulnerable countries, meeting the $100 billion annual climate finance goal for the very first time. In addition to the milestone being met two years late, progress has been slow and insufficient, with contributions consisting predominantly of high-interest loans, exacerbating debt burdens for climate-vulnerable nations. Nearly half of the global population currently resides in countries where debt interest payments exceed spending on education or healthcare.

This failure has created distrust among nations.

“Unfortunately, after 28 COPs in the past, if we look at the history of how we have performed and fulfilled our promises, we see that many were not performed or even started,” he laments. “Many countries signed different initiatives, declarations, and coalitions, but unfortunately, most of them are not working.”

Mr. Babayev believes that Azerbaijan’s COP presidency can be the bridge that helps to re-establish trust between and reconnects the diverging aspirations of the global north and the global south.

“Azerbaijan is at the crossroads between the East and West, and South. That’s why we would like to be the bridge between the developing and developed world,” he says.

The presidencies of COP28, COP29, and COP30, collectively known as ‘the Troika,’ have been urging developed countries to boost their climate finance contributions in the lead-up to COP29.

But countries are yet to agree on the scale of a global funding package.

The ‘Loss and Damage’ fund, which was established in 2022 and was activated and began receiving commitments in 2023, has raised only $661 million, far short of the $215 to $387 billion that the United Nations Environment Programme (UNEP) says is necessary for developing countries to effectively mitigate the impacts of climate change.

In 2022, the UN’s high-level expert group on climate finance reported that developing nations (excluding China) need to invest around $2.4 trillion annually in clean energy and climate resilience by 2030, which is four times the current expenditure. Other reports, including a submission to the UNFCCC from India earlier this year, call for “at least” $1 trillion per year, beginning in 2025.

Many wealthy countries have argued that excessively high targets are a recipe for failure and further breakdown in credibility. The cry for trillions of dollars to cope with climate change impacts underscores the urgent need for efficient and transparent management of climate finance flows and global consensus on how they should be managed.

Countries are divided over several critical issues: who should receive priority for finance, whether developed nations should qualify for funding, whether all types of finance— including non-concessional loans— should count towards climate finance targets, how to ensure funds are accessible, and who should contribute. There is also debate over the obligations of countries that have transitioned beyond their “emerging” status but were not included on the original list of roughly two dozen historically industrialized nations that are expected to contribute.

With climate adaptation in developing countries requiring up to 18 times current contributions— at least 50% more than was previously thought— Mr. Babayev is adamant that the private sector has a critical role to play.

“The private sector is one of the big sources of possible investments, and we would like to provide all necessary platforms to motivate them to be part of the solution,” he says. “How to do this is the subject of negotiations, but transparency is very important here, because markets, countries, and the private sector want to see transparency.”

Enhancing dialogue and collaboration with the private sector can help to identify challenges and accelerate the flow of capital towards climate- and nature-positive outcomes. The COP29 Green Zone will serve as a platform for non-state actors to share best practices and explore initiatives that support global sustainability goals. Advocates are urging nations to view Nationally Determined Contributions (NDCs) as investment opportunities for private finance.

As COP29 approaches, Mukhtar Babayev emphasizes: without a foundation of trust and collaboration, the global effort to limit warming to 2°C could falter.

“For our country, I think we would like to provide inclusivity,” says the president designate of his hopes for the climate summit in November. “We want to show how the world is ready to come together for this climate agenda. It is very important to find solutions to financial issues and discuss critical topics like water issues, land degradation, green agriculture, green skills, food security, green urban projects and more. Azerbaijan aims to build this platform for all countries to see how the world can organize a very constructive dialogue. We invite all stakeholders to attend.”