COP29 in Baku has marked a historic step forward with the establishment of a global carbon market under Article 6.4 of the Paris Agreement.
This mechanism, championed as a "game-changing tool" for both emissions reduction and climate finance, enables countries to trade verified carbon credits, providing critical financial support for climate action in developing nations. COP29 President Mukhtar Babayev praised the achievement, emphasizing its potential to channel funding to those on the frontlines of climate impacts.
UN's Guterres Calls for Urgent Financial Commitments
UN Secretary-General António Guterres stressed the urgent need for increased financial commitments to support countries hardest hit by climate disruptions. He warned that the global adaptation finance gap could balloon to $359 billion per year by 2030, a catastrophic shortfall for vulnerable communities facing escalating climate challenges. Guterres called on wealthier nations to boost adaptation finance to $40 billion annually by 2025, underlining the importance of accessible, transparent funding that reaches those most in need.
"These missing dollars are not abstractions on a balance sheet," Guterres said. "They are lives taken, harvests lost, and development denied." He also encouraged contributions to the newly established Loss and Damage Fund, which provides critical support to communities already experiencing severe climate impacts.
Africa's Call for New Climate Financing Mechanism
Africa's demand for an expanded climate financing framework was spotlighted by Kenya's Environment Cabinet Secretary, Aden Duale.
He highlighted the continent's disproportionate vulnerability to climate impacts despite its minimal contribution to global emissions. Duale called for $1.3 trillion in climate financing, emphasizing the need for grants over loans to ensure that funds bolster resilience and sustainable development without increasing debt burdens for African nations.
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Carbon Market: A Key Tool for Climate Action
The breakthrough on carbon credits is expected to attract substantial private sector investment in climate-friendly projects, a crucial development as leaders strive to close the gap in climate financing. James Grabert, head of the UN Climate Change Mitigation Division, noted that this framework provides a "valuable tool" for nations to achieve climate targets and advance sustainable development. The market also holds potential for creating incentives for large emitters to invest in emissions-reduction projects, thus aligning financial gain with climate action.
Momentum for the G20 Summit
With COP29's progress on carbon credits, climate leaders are hopeful for further breakthroughs at the upcoming G20 Summit in Brazil. UN Climate Chief Simon Stiell urged G20 leaders to prioritize climate finance and push for more grant-based funding and multilateral development bank reforms. "In turbulent times and a fracturing world," Stiell said, "G20 leaders must signal loud and clear that international cooperation is still the best and only chance humanity has to survive global heating."
As COP29 heads into its final days, this progress on carbon credits and the push for increased financial commitments underscore the conference's dual focus: securing the resources and tools needed to meet climate targets and empowering vulnerable communities to weather the storms ahead.
