Climate on the Caspian: a COP of ambition and action in Baku

The sites of the latest three UN climate talks – COP27, COP28 and COP29 – outline a triangle about 2,000 kilometres long on each side, that contains almost half the world’s oil and gas reserves. Sharm El Sheikh in 2022, Dubai in 2023, and Baku in Azerbaijan, coming up this November, have nevertheless delivered or aim to deliver serious and real progress on climate, not the fossil fuel stitch-up many campaigners feared. As climate talks on the Caspian concludes this trio, what can we look forward to?

COP30 in Brazil next year, and COP31, probably in Australia, in 2026, will move the geographic focus away from the wider Middle East, and towards sectors such as forestry. So Baku marks an important staging post. But there has also been an effort to achieve continuity by setting up the COP Presidencies Troika, which includes Brazil.

COP28 in Dubai delivered the “UAE Consensus,” including an unprecedented reference to transitioning away from fossil fuels. It included specific targets on tripling global renewable capacity and doubling energy efficiency improvements by 2030. It recognised the need for much more climate finance for lower-income countries, and established the “loss-and-damage” fund to compensate for now unavoidable climate damages.

Climate action has only gained urgency since Dubai. The Middle East, US, India and south-east Asia have all suffered record heat waves. The world has breached the target of 1.5°C of warming – hopefully only temporarily, but if current trends continue, it will soon be unstoppable.

Yet political currents are running against climate action. Right-wing parties unfriendly to net-zero goals made significant gains at the recent European Parliament elections. Six days before COP29 opens, the US elections could bring Donald Trump and the Republican party back to power, openly hostile to action on climate and low-carbon energy.

Interim UN climate talks in Bonn, which concluded on 13 June, were intended to keep things moving. But Climate Change Executive Secretary Simon Stiell warned, “We’ve left ourselves with a very steep mountain to climb to achieve ambitious outcomes in Baku.”

The UAE COP Presidency has continued to work closely with the incoming COP29 President, Azerbaijan’s Minister of Ecology and Natural Resources, Mukhtar Babayev. One notable effect of hosting COP28 was to add considerable impetus to the UAE’s own decarbonisation efforts.

Hopefully COP29 will do similarly for Azerbaijan and its neighbours in the Caucasus and Central Asia. Like the Middle East, it is an important oil- and gas-exporting region, and Baku has attracted similar scepticism to the UAE from some outside observers concerned about bias towards the fossil fuel industry.

Caspian and Central Asian countries have moved relatively slowly on low-carbon energy, but recently the deployment of renewables has speeded up significantly. Masdar from the UAE and ACWA Power from Saudi Arabia have become significant investors in solar, wind, hydroelectric and hydrogen projects in Azerbaijan and other regional countries including Armenia, Uzbekistan, Tajikistan, Kyrgyzstan and Kazakhstan.

In terms of the conference’s wider goals, Mr Babayev has outlined two pillars: enhancing ambition and enabling action. By 2025, countries are supposed to submit new and strengthened versions of their “nationally determined contributions”.

The world is doing quite well on the goal of tripling renewables, even though this leans mostly on the dramatic progress in China. A modest extra effort should be enough to get there by 2030. The energy efficiency goal is much more problematic, as new electricity needs for artificial intelligence and air-conditioning have popped up.

COP29 has been dubbed the “Finance COP”. A key objective will be to negotiate a new agreement to replace the previous commitment of $100 billion annually until 2025. This sum was achieved late, by some dubious accounting, and its value already eroded by inflation.

But colossal amounts of money are required: $5.8 trillion by 2030 for developing countries’ national climate plans by 2030; $215-387 billion annually for climate adaptation; and $580 billion annually for loss-and-damage by 2030, rising to $1.7 trillion annually by 2050.

There is absolutely no prospect of developed countries’ providing such amounts from public funds in the current political situation and with already very high debt levels. China, which is close to becoming a high-income country, will be leant on to contribute. But a key task for Baku will be to find innovative and imaginative ways of unlocking large amounts of private-sector funding.

COP29 will also aim to close one important piece of unfinished business from Dubai – the Paris Agreement’s “Article 6” on international carbon markets. These are a crucial part of motivating commercial investments, but have run into concerns over verifiability. Article 6 is intended to clear up issues of registering carbon reductions, ensuring they can be traded between countries, and determining who gets the credit, avoiding double-counting. Ensuring carbon capture and storage is properly recognised in Article 6 accounting would be a constructive goal. It is a crucial climate-friendly technology, which the UAE, Azerbaijan and Brazil are all well-placed to deliver.

COP28 and previous events were also notable for crucial side-agreements on issues such as methane leakage, reducing the oil industry’s own direct emissions, and expanding nuclear power. Similar initiatives can be progressed in November – including ensuring the oil and gas industry continues and accelerates its own path to decarbonisation.

Azerbaijan also hopes that COP29 will be a “COP of Peace”. While potential green giants China and the US face off over trade, technology and tariffs, climate progress depends on international cooperation. If indeed the doves of peace can fly over Baku, that could be a less tangible but more fundamental achievement than anything in the official text.