“And amidst the rubble, the roots will spread
Once again, life is all but shed;
How did we get here? Watering the ground with fallen tears
The sun is no more a feeling of warmth
Move before it’s too late, challenge the power of the great State”
The World’s biggest players have gathered in Baku, Azerbaijan for the 29th Edition of the United Nations Climate Change Conference more commonly referred to as ‘COP29’ to convene discussions on tackling the most pressing issues surrounding climate change and sustainable development. Carbon Taxes, Climate Finance and the global transition towards clean energy are some of the key points to be addressed during the convention happening between 11th November, 2024 to 22nd November, 2024.
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COP29 is the 29th Edition of the Annual Gathering of global leaders, policymakers, scientists, and environmental advocates under the United Nations Framework Convention on Climate Change ( UNFCCC ). Baku was chosen as the choice destination for this year’s convention owing to Azerbaijan’s status as one of the pioneers of blending fossil-fuel and renewable energy sources to power the nation, aiming to reduce greenhouse gases by 40% by 2050. However, the same has also been chided by critics who highlighted Azerbaijan’s status as one of the world’s biggest producers of crude oil.
Each year, the Convention serves as a global platform for delegates from multiple countries to meet and present the impending issues in terms of climate action indigenous to their country while identifying their position in the grander scheme of things. The convention effectuates the review of existing climate policies, negotiation of new measures to combat climate change and focuses on tangible actions that can be undertaken to reduce emissions and mitigate the impacts of climate change.
As the world marches on towards cleaner energy sources, some of the major issues lie with the procurement of raw materials for the implementation, extent of reach, allocation of funds, and the liability of nations depending on their size, influence and output.
Several issues are at the forefront on the agenda for COP29. Some of the key elements that sought to be discussed are renewed debate on carbon taxation on member countries as a means to reduce greenhouse emissions, incentivizing corporations to minimize their carbon footprint; Climate Finance seeks to recognize the glaring disparity in availability and utilization of resources by developing nations and developed nations. Establishment of policies mandating direct liability of wealthier nations to fulfill their pledges towards poorer nations is also on the topics for discussion during the summit.
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One of the most ambitious intended outcomes of COP29 is the collective pledge of 1 Trillion USD towards global climate investments, aimed at creating a sustainable future through green infrastructure, energy and disaster forecast and management.
Developing nations, historically being smaller contributors to carbon emissions, often end up being at the receiving end of climate change impacts. For these nations, adaptation measures like improved infrastructure, disaster response systems, and agricultural resilience are critical but budget-intensive. COP29 has renewed focus on the longstanding promise of wealthier countries to allocate $100 billion annually for climate finance, a goal that remains only partially fulfilled.
Beyond the $100 billion, discussions are centered on making climate finance more predictable, accessible, and tailored to the varying needs of recipient nations. Grants, concessional loans, and investments are among the mechanisms discussed to bridge the financial gap between member countries.
A vital point of contention is regarding Private-sector involvement and public-private partnerships for the purpose of scaling up of resources and implementation of operations. By establishing clear frameworks and accountability, COP29 aims to make climate finance a concrete reality and not merely an aspiration.
Carbon Taxes represent one of the most effective yet controversial measures in the climate action toolkit. Imposing a financial cost on carbon emissions by private entities can incentivize companies to adopt measures to reduce their environmental impact. COP29 revisits the discussions on carbon taxes as more countries consider implementing or strengthening their carbon pricing mechanisms.
Carbon Border Tax ( CBT ) was one of the key points of discussion which delayed the finalization of the Agenda of the Summit. CBT is a duty levied on the import of goods, directly proportional to the amount of carbon emissions resulting from the production of the imported goods.
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Another facet was regarding the Carbon Markets, which facilitate the trade of carbon credits wherein higher polluters in a regulated global market. Article 6 of the Paris Agreement signed in 2016 details on the creation of a regulated global carbon market. The global carbon trading mechanism would permit major polluters such as China, India or the United States of America to compensate for their excessive carbon emissions by implementing large–scale reforestation or renewable energy products in poorer countries.
The European Union’s Carbon Border Adjustment Mechanism ( EU CBAM ), poised to begin from 1st January, 2026 is another proposal that faced high contest from nations such as India and China. The EU CBAM seeks to impose higher carbon pricing on countries importing into the EU if they have less stringent climate policies as compared to the EU.
EU CBAM shall primarily target the import of carbon-intensive production such as the cement, iron, steel, aluminum, fertilizers, electricity and hydrogen industries. However, the CBAM was faced with much opposition from the BASIC (Brazil, South Africa, India, and China) Countries who rendered the same to discriminatory while asserting that “standards applicable to developed countries should not be imposed on developing nations”.
India’s Commerce and Industry Ministry has maintained that increased taxation on imports into the EU might prove a hindrance towards effective international trade. India has its own carbon trading mechanism by means of the Carbon Credit Trading System ( CCTS ) which amended the Energy Conservation Act in 2022.
Finance Minister Nirmala Sitharaman recently termed the CBAM as “unilateral and arbitrary”, warning that such measures could negatively impact Indian industries and disrupt the balance in international trade.
However, the sheer size and influence of the EU nations on the global scale would strong-arm nations such as India into formulating carbon taxation measures in line with the Paris Agreement Principles.
COP29 has set its sights on raising a monumental 1 Trillion USD for climate-related investments. This ambitious target is intended to finance various sustainable development goals, ranging from renewable energy projects to disaster resilience and carbon capture technologies. Achieving this goal requires a cohesion between public and private funding, with particular emphasis on leveraging investments from the private sector.
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This trillion-dollar investment goal is not merely a financial figure but a vision for a global economic transformation. COP29 aims to create frameworks that encourage institutional investors, corporations, and banks to view climate initiatives as viable investment opportunities rather than risks. Green bonds, sustainability-linked loans, and blended finance models are some of the innovative tools being discussed to unlock the influx of capital to fund the same.
COP29 is touted to set a decisive course for the formulation of future climate policy, emphasizing the need for concrete action beyond pompous rhetoric. Anticipated outcomes include reinforcement of financial commitments made by member nations, especially with regard to the $100 Billion pledged by wealthier countries towards developing nations for climate mitigation.
Moreover, COP29 is meant to be catalyst for devising a roadmap towards accruing $1 Trillion USD for climate initiatives while also providing a groundwork for statutory updates to effectuate fair and effective carbon-pricing, be it through taxes or trading schemes.
Adaptation and resilience initiatives are another priority, focusing on delivering targeted support to vulnerable regions facing immediate climate threats. All things combined, the measures taken during COP29 are aimed to create a comprehensive and actionable framework for global climate action, wherein Governments and Private Entities are to work hand-in-hand to ensure a brighter and greener future for all.
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