OPEC Fund Quarterly - 2024 Q3

SPECIAL FEATURE

each year to which China should also contribute, a demand Beijing still rejects. Despite the differences Minister Babayev said: “We have come a long way.” As a contribution Azerbaijan launched the Climate Finance Action Fund (CFAF). The facility will serve as a vehicle to channel investments to developing countries and will be capitalized with contributions from fossil fuel producing countries and companies. CFAF will become operational at the conclusion of an initial fundraising round, which seeks to raise US$1 billion, and once 10 countries have committed to becoming shareholders. Tied closely to the outcome of the climate finance negotiations is the debate on how to fill and formalize the setup of the Loss and Damage Fund agreed at COP28. It was established to provide crucial support to vulnerable nations facing climate-related challenges. The COP29 presidency seeks

Azerbaijan’s Minister of Ecology, Mukhtar Babayev, presents his country’s plans for COP29

progress: “Particularly in Small Island Developing States and Least Developed Countries mechanisms for financial support are essential, and we must act without delay,” Minister Babayev wrote. Another important topic at COP29 will be the finalization of efforts to make Article 6 of the Paris Agreement operational. Under this provision, countries are able to transfer carbon credits earned from the reduction of greenhouse gas emissions to help one or more countries meet their climate targets. However, no breakthrough has been reached yet to implement the mechanism. In his letter, Minister Babayev spoke of a “long overdue priority.” The conference in Baku is also expected to prepare the groundwork for the renewal of the National Determined Contributions (NDCs) , each country’s individual climate action goals, which are due on February 10, 2025. At COP28 last year almost 200 nations recognized the

outcome of the Global Stocktake which called for “deep, rapid and sustained reductions in greenhouse gas emissions” in line with the 1.5°C climate target. But action has yet to be taken. The Global Stocktake also showed that climate adaptation efforts are not on track. Countries are supposed to have National Adaptation Plans in place by 2025 and progress their implementation by 2030. The COP29 presidency has called on developed countries to “at least double adaptation finance by 2025” and underlined the “urgent need for continued and increased contributions to funds,” including the Green Climate Fund and the Adaptation Fund. Expectations for Baku are centred on one thing though: “It’s finance, finance, finance,” says Nigel Topping, who represented Great Britain at COP26 in Glasgow in 2021. “We’ve really focused on NDCs and they are nice, but you can’t invest in an NDC. Every COP from now on is a finance COP.”

“We’ve really focused on NDCs and they are nice, but you can’t invest in an NDC. Every COP from now on is a finance COP.” Nigel Topping, representive for Great Britain at COP26 in Glasgow in 2021

Nigel Topping, left; the Information Center for COP29, Baku, Azerbaijan

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Photo: GFANZ

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