Landmark COP29 breakthrough delivers $1.3 trillion Baku Finance Goal

The COP29 Presidency of Azerbaijan on Sunday announced the agreement of the Baku Finance Goal (BFG), a new commitment to channel $1.3 trillion of climate finance to the developing world each year. Success on the COP29 Presidency’s top priority for the UN Climate Summit represents a significant uplift from the previous climate finance goal of $100 billion and will unlock a new wave of global investment.

The Baku Finance Goal contains a core target for developed countries to take the lead on mobilising at least $300 billion per year for developing countries by 2035, the Presidency said in a statement early  Sunday. This represents a $50 billion increase on the previous draft text, and is the product of 48 hours of intensive diplomacy by the COP29 Presidency. It pays special consideration to support the least developed countries and small island developing states, with provisions on accessibility and transparency, it said.

Article 6 on carbon markets

Alongside this, COP29 ended the decade-long wait for the conclusion of Article 6 negotiations on high integrity carbon markets under the UN. Financial flows from compliant carbon markets could reach $1 trillion per year by 2050. They also have the potential to reduce the cost of implementing national climate plans by $250 billion per year. When combined, the Baku Finance Goal and Article 6 will forever change the global climate finance architecture by redirecting investment to the developing world, the Presidency said.

The Baku Finance Goal is the centrepiece of a package of agreements that deliver progress across all climate pillars. This includes getting the Fund for Loss and Damage up and running and ready to distribute money in 2025.

These breakthroughs follow months of intensive diplomacy by the Azerbaijani Presidency to deliver some of the most complex and controversial tasks in multilateral climate action. They mark a critical step in putting in place the means to deliver a pathway to 1.5C.

COP29 President Mukhtar Babayev said: “When the world came to Baku, people doubted that Azerbaijan could deliver. They doubted that everyone could agree. They were wrong on both counts. With this breakthrough, the Baku Finance Goal will turn billions into trillions over the next decade. We have secured a trebling of the core climate finance target for developing countries each year.”

‘An insurance policy for humanity’

“The Baku Finance Goal represents the best possible deal we could reach, and we have pushed the donor countries as far as possible. We have forever changed the global financial architecture and taken a significant step towards delivering the means to deliver a pathway to 1.5C. The years ahead will not be easy. The science shows that the challenges will only grow. Our ability to work together will be tested. The Baku Breakthrough will help us weather the coming storms,” the COP29 President said.

UN Climate Change Executive Secretary Simon Stiell highlighted that the new finance goal agreed at the UN Climate Conference in Baku is an insurance policy for humanity.

“This deal will keep the clean energy boom growing and protect billions of lives.  It will help all countries to share in the huge benefits of bold climate action: more jobs, stronger growth, cheaper and cleaner energy for all. But like any insurance policy – it only works – if the premiums are paid in full, and on time.”

He acknowledged that no country got everything they wanted, and that the world leaves Baku with a mountain of work to do. “So this is no time for victory laps. We need to set our sights and redouble our efforts on the road to Belém.”

The successful agreement of the Baku Finance Goal comes as part of a series of achievements that the COP29 Presidency delivered and secured during the annual UN climate summit.