This year’s UN Climate Change Conference, the 29th Conference of the Parties (COP29), will be held from 11 November to 22 November 2024 in Baku, Azerbaijan. COP29 will be important to sustain the momentum from outcomes achieved by the Global Stocktake and COP28 in 2023. The COP29 Presidency has announced two major themes for the Conference: Enhancing Ambition (to keep 1.5°C within reach as per the Paris Agreement) and Enabling Action (ensuring there is financial support for the energy transition and developing countries’ needs). 

To achieve this, the COP29 Presidency has emphasised the need for all Parties to work together in solidarity for a green world. In the words of the President-Designate of COP29, Mukhtar Babayev:

“COP29 will be a defining test for both the Paris Agreement and for multilateralism,”…. “[w]e make progress when we come together, put differences aside, and engage in open and honest dialogue.”

There are several negotiation priorities and concrete outcomes needed at COP29. In this article, we explore these priorities and the key themes we expect to shape COP29, as well as Australia’s role at the conference and opportunities for businesses to engage. 

Key priorities and outcomes needed at COP29 

• Climate finance: a top negotiating priority for COP29 is agreeing on the New Collective Quantified Goal on Climate Finance (NCQG), in which developed countries must commit to mobilise more than USD100 billion per year for climate finance from 2025. Three central aspects of the NCQG remain to be agreed before 2025: How much? Who will pay? What and who for?
• Loss and damage: 2024 has seen notable progress with respect to the operationalisation of the Fund for responding to Loss and Damage, with final arrangements to be agreed at COP29, following the Board’s recent meeting in Baku, with a view to commence funding in 2025. At COP29, attention will also be on the 2024 review of the Warsaw International Mechanism, and the delivery of the first joint report of the Santiago Network for Loss and Damage and the Executive Committee of the Warsaw International Mechanism.
• Carbon market operationalisation: following limited progress at COP28, the COP29 Presidency has committed to prioritising Article 6 operationalisation, with a particular focus on resolving issues around authorisations, reporting rules, and registry functionality. Agreement and clarification on these aspects at COP29 will be critical to fully operationalising Article 6 of the Paris Agreement.
• Mitigation and enhanced ambition: Parties are seeking to make substantive progress on the Mitigation Work Programme, in order to implement the decisions of the first Global Stocktake as well as strengthen Nationally Determined Contributions (NDCs) guidance, particularly given updated NDCs are to be submitted by February 2025. Attention will also be on the first Biennial Transparency Reports due by 31 December of this year. These reports play a key role in assessing progress on implementing NDCs and achieving the Paris Agreement targets. Not least, the COP29 Presidency has published specific priority pledges and declarations, with a focus on emissions reduction and scaling green technology solutions.
• Accelerating the Just Transition: the Second Annual High-Level Ministerial Round Table on Just Transition will be held at COP 29, focusing on promoting the importance of equity and inclusivity in the energy transition. Discussions are expected to revolve around how Parties can advance their just transition pathways in the context of renewed NDCs and National Action Plans (NAPs) and the expectations of Parties with regards to the United Arab Emirates Just Transition Work Programme.
• Climate Change and Biodiversity: recognising the important nexus between climate change and biodiversity, negotiations on biodiversity will continue, following the recent COP16. Water is also expected to be a significant area for discussion after the COP29 Presidency published the COP29 Declaration on Water for Climate Action.

Key Agenda Items at COP29

The New Collective Quantified Goal on Climate Finance (NCQG)

The NCQG is meant to be adopted this year at COP29 in Azerbaijan, reflecting a target greater than the $100 billion annual target set at COP15 in 2009. In this respect, the COP29 Presidency has indicated that its "top negotiating priority for COP29 is agreeing on a fair and ambitious New Collective Quantified Goal on climate finance (NCQG)" that is adequate to the urgency and scale of climate change, taking into account the needs and priorities of developing country Parties.

Following SB60, which saw Parties defer most of the NCQG negotiations and deliberations to COP29, and little movement in the input paper by the end of the NCQG sessions, there has been notable progress in the lead up to COP29. Pre-COP29 Finance Negotiations were held from 9 to 12 September 2024, to discuss key divisions between developed and developing countries over how to finalise the NCQG and to refine the input paper for COP29. 

The COP29 Presidency also convened an informal Heads of Delegation meeting on 8 October in Baku, followed by an formal High-Level Ministerial Dialogue on the NCQG on 9 October, and a Pre-COP on 10 – 11 October, to further advance NCQG negotiations in the lead up to COP29. 

As a result of these deliberations, the Parties have reached alignment on some issues, however, others remain contentious. 

Key Issues and Anticipated Progress at COP29

On 15 October 2024, the ad hoc work programme on the NCQG released its report on the work conducted by the programme on the NCQG in 2024, including the technical expert dialogues and meetings under the ad hoc work programme. 

It is anticipated that negotiations will centre around who will provide the funding, who will receive the funding, and what the quantum of that funding will be, with a view to reaching a consensus by the end of COP29. Parties will need to agree on the following fundamental issues:

1    What will be the quantum of the new target?

• Quantum: Parties have discussed options for the quantum of the NCQG, proposing an annual goal of USD 1, USD 1.1, USD 1.3 or USD 2 trillion, or setting the goal from a floor of USD 100 billion per year. Some Parties are of the view that, since the quantum is dependent on the NCQG’s structure, time frame, sources of finance and contributors, further clarity on these aspects is needed first. Other Parties have called for a grant-equivalent quantitative target in order to respond to the need for more grant-based and highly concessional finance.  
• Time frame: Parties have deliberated the time frame of the NCQG, including whether it should be an annual goal to be achieved during the year, an annual goal to be achieved over a 5, 10 or 25 year period, or a cumulative goal rather than an annual goal. 

2    Who will be the contributors?

• Contributors: The Parties are yet to reach agreement on who will be contributing to the new target, including whether or not the NCQG should define the contributors to the goal as developed country parties or other parties providing financial support on a national income per capita or historical emissions basis.
• Structure and sources of finance: There are also ongoing deliberations over the structure of the NCQG. Including whether it should be framed as a single layered goal of finance flows provided and mobilised from developed to developing countries, or as a multilayered goal in the form of a global investment goal, with sub-goals for the provision and mobilisation of financial support for developing country parties, composed of different sources and providers of climate finance, thematic targets and policy guidance.

3    Who and what will the finance be for?

• Type of finance: Parties will also need to continue discussions around the nature and scope of the NCQG, including whether funding should be focused on mitigation, adaptation or loss and damage, or whether there should be sub-goals for each.
• Qualitative elements: Parties are still deliberating whether and how to take into consideration the specific needs and circumstances of different geographical regions in the NCQG. This also includes, whether and how to include policy layers, calls for action and enabling factors within the NCQG.

The Private Sector

As far as the private sector goes, there is broad agreement that public finance alone cannot fund public finance. However, there remains disagreement on how the role of non-public actors should be referenced or incorporated into the NCQD. 

Operationalising the Loss and Damage Fund for 2025 

A major outcome of the COP28 in Dubai was the agreement to operationalise the Fund for responding to Loss and Damage, which will provide financial and capability support to developing countries globally to address and respond to the irreversible impacts of climate crisis. With decisions 1/CP.28 and 5/CMA.5, Parties adopted the governing instrument and decided to operationalise the fund as a financial intermediary fund hosted by the World Bank, which will be serviced by a new dedicated and independent secretariat. 

The Loss and Damage Fund quickly secured significant funding: by the end of the COP28, pledges to the fund exceeded US $700 million, including €100 million pledges by France and Italy, USD $100 million pledges by UAE and Germany, and GBP£40 million pledged by the UK. 

Since COP28, further steps have been taken to operationalise the Loss and Damage fund, with a view to commencing funding in 2025. 

Steps towards operationalising the Loss and Damage Fund

Since COP28, the independent Board of the Loss and Damage Fund, comprising 26 members from Parties to the Convention and Paris Agreement, with 12 members from developed country Parties and 14 members from developing country Parties, has held three meetings. These meetings have seen the Board select Richard Sherman of South Africa and Jean-Christophe Donnellier of France as Co-Chairs for a term of one year, the Philippines endorsed as the host country of the Fund, and the announcement of Ibrahima Cheikh Diong as the Executive Director for a four-year term commencing 1 November 2024. These are all significant decisions towards the Fund’s full operationalisation at COP29.

What is expected for COP29?

The third meeting of the Board of the Loss and Damage Fund in September produced a draft report to be considered by COP29. Final arrangements with respect to the Loss and Damage Fund are anticipated to be finalised at COP29, with the governance arrangements between the Loss and Damage Fund, COP and CMA, based on the recommendations of the Standing Committee on Finance, being a priority.

The first annual High-Level Dialogue on complementarity and coherence co-convened by the Loss and Damage Fund and the UN Secretary-General will be held in April 2025. A high-level launch event for the dialogue will be held in Baku during COP29. The objectives of this public-facing event are to provide an update on the latest progress made relating to the Fund, to continue the momentum on loss and damage from recent COPs, to highlight the commitment from and calls for countries and various funding arrangement entities to provide support for responding to loss and damage, and to set the stage for the high-level dialogue to take place in 2025.

The COP29 Presidency will use the Baku COP29 summit to work with the countries who have already pledged to the fund, to convert those pledges into tangible funding ready for disbursement to the communities who particularly need it. The Presidency will also be calling for further contributions.

Review of the Warsaw International Mechanism and Annual Santiago Report

Separately, the 2024 review of the Warsaw International Mechanism for Loss and Damage (WIM) will take place at COP29/CMA 6 based upon the terms of reference agreed in June 2024 at the 60th Meeting of the Subsidiary Bodies (SB 60) of the UNFCCC. This review will, amongst other things, assess how the landscape for addressing loss and damage has evolved since the last review in 2019, including the role of the Loss and Damage Fund.

The terms of reference for the 2024 review of the WIM indicate that Parties will assess the progress in implementing the WIM’s functions, evaluate its performance and achievements, and consider the long-term vision of the mechanism. They will scrutinise the activities conducted by the WIM through its Executive Committee and the Santiago Network. The review will also examine coordination, complementarity and synergies between the rapidly evolving architecture of Loss and Damage institutions under the Convention and its Paris Agreement. This includes collaboration between the Fund for Responding to Loss and Damage and new Funding Arrangements, the Santiago Network, and the WIM Executive Committee.

Under the same agenda item, the Santiago network for Loss and Damage and the Executive Committee of the WIM will deliver their first joint report to the COP and CMA. The report contains information on organisational and procedural matters, including on meetings and events, and annexes the plan of action of the expert group of the Executive Committee on slow onset events endorsed during the reporting period.

The Path Forward for Article 6 at COP29

Article 6 of the Paris Agreement enables Parties to voluntarily cooperate to implement their NDCs and pursue higher ambition. Divided into three main approaches — Articles 6.2, 6.4 and 6.8 — Article 6 aims to promote environmental integrity while advancing sustainable development. However, challenges in finalising the operational frameworks, especially for Articles 6.2 and 6.4, left COP28 stakeholders with unresolved questions and a lack of clarity. This uncertainty has amplified expectations for COP29, especially since President-Designate, H.E. Mukhtar Babayev, has committed to prioritising Article 6 operationalisation, with a particular focus on resolving issues around authorisations, reporting rules and registry functionality.

Article 6.2

Article 6.2, which enables cooperative approaches between country Parties that involve the creation, transfer and use of internationally transferred mitigation outcomes (ITMOs), saw limited progress at COP28. Nonetheless, countries have continued to engage in Article 6.2 cooperative approaches, with Switzerland and Thailand becoming the first countries to complete a transfer of carbon credits under Article 6.2 earlier this year.

In Baku, negotiations will likely focus on finalising the rules for authorisations and in particular, whether authorisations can be amended or revoked at any point during the transaction. This issue is likely to be contentious, as the ability to modify or withdraw authorisations would have significant implications for both purchasing and host countries. For purchasing countries, such changes could undermine the stability of their Article 6 strategies, while host countries may push for greater flexibility to manage the risk of overselling. 

The framework for reporting under Article 6.2 will also be central at COP29. This is likely to include negotiations on clarifying the agreed electronic format for informing the UNFCCC of Article 6.2 transaction, as well as methods for improving reporting requirements, verification processes and public access to information. 

COP29 will also likely see negotiations on the Article 6.2 international registry. At SBSTA 60, two positions arose regarding the framework and functionality of the international registry. Some countries advocating for a centralised approach where it would service all potential registry functions, such as issuing carbon credits. Others supported a more decentralised approach, with the international registry to serve a tracking and recording function, with credits being issued elsewhere.

Article 6.4 

The failure to reach consensus on Article 6.4 methodologies at COP28 has stalled the operationalisation of the recently named ‘Paris Agreement Crediting Mechanism’ (PACM). Which is intended to allow for the creation, transfer and use of unitised mitigation outcomes (A6.4ERs). 

Since COP28, some progress has, however, been made on Article 6.4. Most notably, the Article 6.4 Supervisory Body adopted two standards at its most recent meeting in October: methodology requirements and activities involving removals. Interestingly, the Supervisory Body has recommended that the CMA ‘take note’ of the adoption of these two standards and ‘endorse’ the approach of the Supervisory Body, reflecting a strategic attempt to expedite the operationalisation of Article 6.4 and to ensure the mechanism can remain flexible as the Supervisory Body can review and improve the standards as necessary. 

The release and adoption of the two standards means they are immediately applicable without CMA adoption. Further, methodologies can now be submitted to the Methodology Expert Panel. A critical focus at COP29 will be how the CMA responds to these standards and whether it will endorse the approach taken by the Supervisory Body. 
The Supervisory Body also adopted a sustainable development tool which is designed to ensure that activities under Article 6.4 support the sustainable development objectives of host countries. The tool mandates that activity participants identify, evaluate, avoid, minimise, and mitigate potential environmental and social risks associated with their projects.

Article 6.8

A mandated in-session workshop on Article 6.8 will be held in Baku, in conjunction with the 6th meeting of the Glasgow Committee on Non-Market Approaches (NMAs). This workshop will bring together Parties and non-Party stakeholders to exchange information on NMAs, including best practices and lessons learned from identifying, developing and implementing NMAs and to reflect on support available and supported needed for strengthening NMAs. 

Mitigation

Advancing the Mitigation Work Programme (MWP)

After Parties failed to reach an agreement on the MWP at the last round of negotiations in June 2024, there is a strong emphasis on making substantive progress at COP29. Parties underscored that without advancement on mitigation, there will be no satisfactory outcome to the UN Climate Change Conference. The focus is on carrying forward the decisions from the first GST, especially regarding transitioning away from fossil fuels. Progress could be achieved by providing further guidance on the features of NDCs.

Updated NDCs

A key focus of the annual COP negotiations is updating country pledges in relation to NDCs. On 28 October 2024, the UN Climate Change released the 2024 Nationally Determined Contributions Synthesis Report, which assesses the NDCs provided to date in terms of their expected contributions to reducing global emissions in 2030, among other things. 

Following the release and noting that current NDCs fall well short of the required impact, UN Climate Change Executive Secretary Simon Stiell has called for new NDCs to be ambitious, sector- and gas-specific, as well as credible (that is, based by substantive legislation and regulation). 

The Executive Secretary has noted that NDCs should also detail countries’ priorities and investments into adaptation in order to protect human life and infrastructure, and align with National Adaptation Plans. Given the critical importance of these updated NDCs, the Secretariat will be engaging with parties into 2025 in order to support delivery of their NDCs as well as engage the broader public on the issue: further details are expected to be released at COP29.

Updated NDCs should also take into consideration the outcomes of the first Global Stocktake (GST) at COP28, given the GST’s crucial role in assessing collective progress towards achieving the Paris Agreement's goals and noting gaps. Discussions on the MWP in June 2024 have highlighted the importance of increasing mitigation efforts and integrating GST outcomes into decision-making. 

The EU Council has emphasised the need to further develop and put into practice all aspects of the outcomes from the GST assessment at COP28 and has called for “further action from all countries”, in particular “major economies” to limit global warming, calling on countries to submit NDCs aligned with the “highest possible level of ambition” and including targets covering all types of greenhouse gas emissions.

While it is not expected many countries will bring forward their next NDCs at COP29, we expect Parties to reiterate the need to scale up ambition, drawing on the latest scientific data and UNEP Emissions Gap Report 2024.

Transparency and reporting

Parties are required to submit their first Biennial Transparency Reports (BTRs) by 31 December of this year. BTRs are required to be submitted every two years and form part of the Enhanced Transparency Framework (ETF). The reports are intended to provide information:

• national inventory reports
• progress towards NDCs
• policies and measures
• climate change impacts and adaptation
• levels of financial, technology development and transfer and capacity-building support
• capacity-building needs and areas of improvement.

Prior to COP29, in September 2024, the Global Transparency Dialogue convened during the 79th session of the United Nations General Assembly in New York, supported by the UNFCCC Secretariat and the COP29 Presidency. The dialogue was intended to raise awareness to aid submission of BTRs and served as the forum for announcing the COP29 Transparency Declaration. The BTRs were noted as being fundamental to fostering trust and decision-making based on data. However, it was also noted that countries faced limitations based on capacity, data management and difficulty understanding the reporting methodologies and tool.

In order to build trust amongst Parties, support developing countries in their preparation of their BTRs, as well as enhance universal participation in the ETF, the COP29 Presidency, in collaboration with the UNFCCC, launched the Baku Global Climate Transparency Platform (BTP), in order to continue the transparency agenda beyond COP29. 

The platform will facilitate the sharing of experiences, challenges and successes in preparing BTRs, enhancing collective efforts to track progress and identify areas needing more action and investment. It will operate in phases, with the first phase intended to assist with the finalisation of BTRs in 2024, while the second phase will focus on specific support for implementation and enhancing global participation in the ETF, in order to encourage progress beyond COP29.

In aid of this, the COP29 Presidency will run regional workshops in the next months on transparency across various regions, with a particular focus on developing countries. Additionally, in the lead up to, and during, COP29, the COP29 Presidency has appointed High-Level Co-Pairs for Transparency, tasked with increasing political awareness of the importance of transparency in order to further build political engagement on transparency.

Presidency emissions reduction pledges and declarations

As part of the Action Agenda at COP29, the COP29 Presidency has published several pledges and declarations committing to specific targets on key priorities. Numerous of these pledges and declarations consider how to increase emissions reduction through reducing greenhouse gases and scaling up green technology and solutions, including:

• Global Energy Storage and Grids Pledge is aimed at increasing energy storage capacity worldwide sixfold from 2022 levels, to reach 1,500 gigawatts by 2030. As part of this, endorsers will commit to improving grid capacity by adding or upgrading 25 million kilometres by 2030, given the need for 65 million kilometres of grid networks by 2040 for net-zero by 2050. Key commitments include establishing policies and regulatory frameworks to facilitate the adoption of energy storage, capacity building to develop various energy storage options, supporting the development and deployment of new technology including energy storage, modernising and expanding infrastructure, and promoting regional integration to enhance energy security.
• Green Energy Zones and Corridors Pledge, which commits endorsers to establishing green energy zones and corridors in order to encourage investment and strengthen economic growth, as well as develop and expand infrastructure, while also supporting regional cooperation. The initiative focuses on promoting efficient use of natural resources, advocating for policies that stimulate investment, achieving economic growth and creating jobs in a sustainable way, and enhancing the efficient use of energy.
• Hydrogen Declaration, which is intended to unlock international market potential for clean hydrogen (including its derivatives) by addressing barriers including “regulatory, technological, financing and standardisation”. The declaration notes the imperative to stimulate demand for hydrogen products with demand-side measures and initiatives between the public and private sectors, in order to scale up renewable and low-carbon hydrogen use cases. It also calls for enhancing the development of global standards on certification schemes for hydrogen, providing financial and technical assistance for rolling out hydrogen products, particularly in developing countries, and advancing research and development to support the development and innovation of hydrogen products across the value chain.
• Declaration on Reducing Methane from Organic Waste, which focuses on reducing methane emissions from the waste sector. This declaration commits to prioritising solutions that focus on “avoidance, diversion, valorisation and infrastructure”. It also emphasizes integrating into climate policies concepts around circular economy and waste reduction measures, as well as building Party capacity (particularly, again, in developing countries) and promoting public awareness campaigns.

The COP29 Presidency has also introduced several initiatives and pledges aimed at accelerating global mitigation efforts by enhancing climate finance and investment, including: 

• Climate Finance Action Fund: Contributions into this fund will be voluntary, from countries and private entities that produce fossil fuels, with the objective of increasing public and private sector participation in mitigation, adaptation, and research and development efforts. This initiative aims to mobilise financial resources to support developing countries in their climate actions.
• Baku Initiative for Climate Finance, Investment and Trade: This initiative is intended to promote investment into green diversification, support policy development, and share expertise through dialogue. The initiative seeks to enhance collaboration among nations to accelerate the transition to a low-carbon economy.

Outside of formal COP29 negotiations momentum is building around the need for broader financial reforms to achieve the required level and quality of finance to deliver on the Paris Agreement goal. This includes reforming international financial institutions such as development banks to channel more finance to developing countries' low-carbon and climate-resilient plans, as well as mobilising more private finance.

Redirecting what are described as counterproductive subsidies, such as those for fossil fuels, has been flagged as being critical, given subsidies reached record levels in 2022. Meanwhile, introducing new levies on high-emission activities could also increase available funds. We expect this work will also be raised again through the High-level dialogues on Finance.

Just transition

In the years following the Paris Agreement, we have seen increased focus on ensuring a ‘just transition’ – a term that encapsulates the concept of ensuring that the transition to net-zero emissions and climate resilience is orderly, inclusive and just, creates decent work opportunities and leaves no one behind. 

What this is intended to mean in practice is that the benefits and costs of the energy transition should be shared fairly across people and communities. Accordingly, key focuses of a just transition include encouraging new regional industry development, creating local jobs, reducing pollution, lowering costs, and benefit sharing Indigenous peoples and local communities. 

Just transition at the UNFCCC level has a short history but it is increasingly clear that it is an issue of importance for many stakeholders. At COP27 in Sharm el-Sheikh, Egypt in 2022 Parties agreed to establish a work programme on just transition to discuss pathways to achieve the goals of the Paris Agreement. At COP28 last year in Dubai, UAE work on the just transition programme continued as Parties defined and adopted the programme’s objectives.

In June this year, the first Dialogue under the United Arab Emirates Just Transition Work Programme took place in Bonn, Germany. Participants shared their views on optimising just transition pathways under countries’ national climate action plans, including NDCs, National Adaptation Plans (NAPs) and Long-term, low-emission development strategies (LT-LEDS). 

The primary takeaway from those discussions was the need to develop comprehensive policy frameworks that align the just transition with national priorities and the early engagement of stakeholders such as youth and marginalised groups. This is necessary to overcome traditional just transition barriers like access to adequate financing, capacity building and socioeconomic disadvantages.

COP29 will see the culmination of these preliminary activities undertaken by the UNFCCC just transition work program with the Second Annual High-Level Ministerial Round Table on Just Transition. The intent is that the roundtable will promote the importance of equity and inclusivity in the energy transition. The key points for discussion are:

• How can Parties advance their just transition pathways in the context of preparation and implementation of the next round of NDCs and NAPs? How can international cooperation and support on the full range of means of implementation assist Parties to advance their just transition pathways in the context of NDCs and NAPs?
• What are the expectations of Parties with regards to the United Arab Emirates Just Transition Work Programme, and how can it serve as an effective tool for assisting Parties in further defining and implementing their climate plans in the context of just transition pathways that promote sustainable development and poverty eradication?

These discussion points demonstrate the growing importance of the just transition during UNFCCC negotiations. This is crucial given that research from the International Labour Organisation (ILO) has found that:

• Heat stress alone could result in productivity losses equivalent to 80 million jobs. 
• Over 70 per cent of the global workforce – 2.4 billion people – are now at high risk of extreme heat.
• Those already facing socio-economic vulnerabilities encounter heightened threats from climate impacts, about 4.1 billion people, or 53 percent of the global population, lack social protection

In this light, the ILO has called for greater integration of the just transition under discussions of climate finance, Article 6, and loss and damage, as well as under NDCs and NAPs. The latest UN Development Programme analysis has revealed that that, as of 31 October 2022, ‘just transition principles are now reflected in 38% of NDCs, 56% of LT-LEDS, and a growing number of high-profile global initiatives’. We will be watching these negotiations closely through a just transition lens.

Climate change and biodiversity nexus

As intersections between climate change and the global biodiversity crisis continue to grow in prominence, it is increasingly clear that responsible and effective action on climate change must be complemented by robust biodiversity conservation and restoration. 

Significantly, the COP28 Presidency and the Presidency to 15th Conference of the Parties to the United Nations Convention on Biological Diversity (Biodiversity COP15) released a joint statement in 2023 stating:

“There is no path to fulfilling the Paris Agreement and keeping 1.5°C within reach without protecting and restoring nature, land, and the ocean.”

COP29 falls only weeks after the 16th Conference of the Parties to the United Nations Convention on Biological Diversity (Biodiversity COP16) (see our Knowledge Insight on Biodiversity COP16). Recognising the importance of promoting the climate change and biodiversity nexus, at Biodiversity COP16, countries agreed to:

• Prioritise the protection, restoration and management of ecosystems and species important for the full carbon cycle and contributing to climate change adaptation.
• Consider integrating nature-based solutions and/or ecosystem-based approaches to climate change adaptation, mitigation and disaster reduction in National Biodiversity Strategies and Action Plans (NBSAPs) (NBSAPs are which are the means through the means through which the CBD’s goals and targets are translated into action at the domestic level – serving a similar purpose to NDCs under the Paris Agreement).
• Align their climate change and biodiversity policies at the national level.
• Foster collaboration between the Convention on Biological Diversity and United Nations Framework Convention on Climate Change.
• Consider the existing and projected impacts of climate change and climate-related policies on biodiversity in the implementation of the Kunming-Montreal Global Biodiversity Framework. 

The importance of nature, and recognition that countries need to coordinate and simultaneously implement strategies that address both climate change and biodiversity loss will be a central theme at COP29. 

Our review of the work being done to revise and update NDCs demonstrates that countries are increasingly seeing nature-based solutions and/or ecosystem-based approaches as key solutions to climate change mitigation, adaptation and disaster reduction. We also expect that nature and biodiversity will be relevant to discussions on climate finance and Article 6 of the Paris Agreement.

Water is also expected to be a significant area for discussion after the COP29 Presidency published the COP29 Declaration on Water for Climate Action (Water Declaration). The Water Declaration recognises that:

“…water is at the heart of climate change, with the majority of climate impacts being experienced worldwide through floods, droughts, glacier mass loss, landslides, degraded water quality, water scarcity and changing water availability, as well as other substantial changes in the water cycle at global and regional scales.”

In light of this, the Water Declaration calls upon stakeholders to:

• Strengthen COP-to-COP synergies, continuity and coherence on water-related processes of the UN Framework Convention on Climate Change, the Convention on Biological Diversity and the UN Convention to Combat Desertification, as well as water-related processes in the UN Climate Change platform.
• Strengthen the generation of scientific evidence on the causes and impacts of climate change on water resources, water basins and water-related ecosystems by leveraging existing knowledge platforms, as well as considering the creation of new regional knowledge hubs.
• Enhance water-related climate policy actions, including by taking integrated approaches to combat the causes and impacts of climate change on water basins and water-related ecosystems, integrate water-related mitigation and adaptation measures in national climate policies, including NDCs, National Adaptation Plans and NBSAPs.

The Water Declaration signals the launch of the new Baku Dialogue on Water for Climate as a COP-to-COP collaboration platform for continuous and coherent water-related climate action.

Australia’s COP29 priorities and opportunities for business

The Australian Government has noted its priorities for COP29 will include advocating for outcomes which advance action and implementation (primarily, the development of ambitious post-2030 NDCs), implementation of the Enhanced Transparency Framework, and agreement to a New Collective Quantified Goal on climate finance.

Australia, along with the other Parties to the Paris Agreement, is due to submit an updated NDC in February 2025. The Australian Government has announced that Australia’s renewed NDC will be more ambitious than its last and will include a 2035 target. 

The Climate Change Authority is due to shortly provide its advice on the 2035 emissions reduction targets for Australia’s next NDC to the Minister for Climate Change and Energy. More ambitious federal emission reduction targets will likely be passed through to high-emitting industries and have flow on effects to various businesses. 

The NCQG will also be a priority focus for Australia at COP29, with Australia’s Minister for Climate Change and Energy, Chris Bowen, and Egyptian Minister Yasmine Fouad having been appointed the Ministerial Pair of the NCQG to lead the NCQG negotiations and facilitate a political agreement at COP29. Australia will be amongst the countries expected to significantly contribute to the NCQG. 

COP29 in many ways will be a finance COP and the opportunities for business are ample. The success of COP29's mitigation ambitions depends not only on the success of Parties’ negotiations, but also hinges significantly on private sector engagement. This has been emphasised by the World Economic Forum: 

“The private sector’s involvement needs to be ramped up; at the moment, many climate finance schemes have been devised by making assumptions about the behaviour of private capital, some of which have not held. The private sector is best placed to lay out the prerequisites for private finance to flow, so its input should be solicited quickly and systematically.”

Looking forward to 2026: Australia’s bid to host COP31

Looking beyond COP29, Australia has bid to host COP31 in 2026 in partnership with its Pacific neighbours. A decision on hosting is expected to be made in Baku. If successful, Australia will need to demonstrate its global leadership on greater decisive climate ambition, and work to convene all stakeholders in ways that are inclusive, open and informed by community voices. 

Australia and Pacific Island countries will also work together to highlight the urgency of the climate crisis throughout the region, sharing experiences driving inclusive climate action.

Stay informed and follow the latest updates on developments at COP29

We will be on site when COP29 commences in Baku, closely tracking the progress of the climate change negotiations and reporting on key takeaways and potential impacts for key stakeholders and businesses. Look out for our further articles and reach out if you have any questions.