Category: COP29

Blending Finance, Bridging Gaps: How COP29 is Redefining Climate Action

by Mahika Shergill ’26, Honors Economics & Environmental Studies

BAKU, Nov 15 – At the 29th United Nations Climate Change Conference (COP29), held in Baku, Azerbaijan, finance is taking center stage as global leaders, climate advocates, and representatives from the public and private sectors discuss ways to scale up financial commitments to combat climate change. Dubbed the “Finance COP,” COP29 has prioritized the mobilization of significant climate finance to meet the urgent needs of mitigation and adaptation. Central to these discussions is the establishment of the New Collective Quantified Goal (NCQG) on climate finance, intended to replace the previous $100 billion annual commitment made at COP15 in 2009.

The NCQG aims to recognize the enormous financial demands of effective climate action. Initial estimates suggest that climate action requires at least $1 trillion annually, with some projections reaching higher to meet ambitious climate goals. The NCQG not only sets a new target but also shifts the approach from a purely public-funded framework to one that encourages substantial private sector contributions — by the end of the two weeks, the COP Presidency and 198 parties attending hope to reach consensus on what this NCQG means for the climate and its people, and how much money will be committed to it. 

As a junior studying economics and environmental studies with a particular interest in climate policy and law, I tracked discussions around climate finance and carbon markets during week one of COP29. Over the 25+ events and negotiations I attended over the course of the week, a key idea that was repeatedly talked about was the collaborative potential between governments, Multilateral Development Banks (MDBs), and the private sector, all working to unlock the financial flows necessary for meaningful climate progress.

Cross-Sector Collaboration: Public-Private Partnerships as a Catalyst for Climate Finance

At COP29, the necessity of private finance for impactful climate action was a recurring theme. Public funds alone are insufficient to meet the vast investment requirements for a low-carbon transition; therefore, COP29 discussions frequently focused on how to engage private capital effectively. The NCQG itself aims to shift from a purely public-funded model to a framework that prioritizes robust public-private partnerships, emphasizing private sector participation as central to meeting climate targets.

A key insight from the panels came from discussions on the U.S. Inflation Reduction Act (IRA), which has catalyzed significant private investment in clean energy both domestically and internationally. Karen Fang, Managing Director and Global Head of Sustainable Finance at Bank of America, noted the IRA’s role in sparking what she called a “manufacturing renaissance” within the U.S., with renewables like solar energy storage becoming one of the most cost-effective energy sources. Both BP and ExxonMobil, traditionally seen as fossil fuel giants, have publicly recognized the economic opportunities in clean energy, suggesting that their investments are not only about compliance but are also driven by the profitability and long-term stability that renewable energy offers — this has meant that companies plan to maintain their climate investments regardless of potential shifts in U.S. or global politics. Ali Zaidi, White House National Climate Advisor, underscored this resilience, noting that the momentum from the IRA and other climate commitments is too entrenched to be reversed by changes in administration.

Governor of Washington State, Jay Inslee, and White House National Climate Advisor, Ali Zaidi, at a US Pavilion event on sub-national level climate action and the Inflation Reduction Act.

The collaboration between governments, MDBs, and private investors continues to be identified as crucial to mobilizing climate finance at scale. Ajay Banga, President of the World Bank,  elaborated on this approach, emphasizing that MDBs are positioned to act as “first risk-takers” in sustainable finance initiatives. Through platforms like the soon-to-be-launched Frontiers Opportunity Fund, the World Bank is setting up guarantee mechanisms to absorb early-stage investment risks, making projects in renewable energy and infrastructure more appealing to private capital. By leveraging public and philanthropic funds in this way, MDBs aim to de-risk high-impact projects in middle-income countries, offering private investors a clear pathway to sustainable returns.

‘Unlocking Financing for the Green Transition in Emerging and Developing Economies’ at the World Bank and IMF Pavilion with Mohamed Jameel Al Ramahi, CEO of Masdar, Nadia Calviño, President of the European Investment Bank, Ajay Banja, President of the World Bank, and Kristalina Georgieva, Managing Director of the International Monetary Fund (left to right).

This collaborative model resonates across private sector perspectives as well. Rich Lesser, Global CEO of the Boston Consulting Group, highlighted that consistency in public-private collaboration is key to scaling these efforts. He pointed out that a stable regulatory landscape and clear policy signals allow businesses to confidently commit to long-term, high-impact projects. Similarly, Andrew Forrest, Executive Chairman of Fortescue Metals Group, noted that Fortescue’s decarbonization strategy had proven financially viable without relying on offsets or carbon capture, underscoring how profitable low-carbon ventures can become within the right partnership frameworks.

High-level Panel facilitated by the World Economic Forum on the interplay between private and public finance.

By facilitating these collaborations, week one of COP29 has showcased how public-private partnerships serve as more than just financial support. They are a means to harness the expertise, resources, and influence of private entities, turning climate finance into a scalable, profitable venture that aligns with global climate goals.

Carbon Markets as a Pathway for Private Sector Involvement

Article 6 of the Paris Agreement which I track closely — carbon markets — emerged as a critical area for engaging private finance in climate solutions. The first day of the conference marked a breakthrough with the operationalization of Article 6.4 of the Paris Agreement, setting the stage for a globally regulated carbon market. This development has sparked significant interest among private sector participants, who view carbon markets as a key entry point for scaling their climate impact while accessing profitable opportunities in emissions reduction.

Carbon markets allow companies to invest in emissions reduction projects and trade carbon credits, creating a financial incentive for lowering greenhouse gas emissions. Simon Fellermeyer, Article 6 negotiator for Switzerland, emphasized during a panel that the successful implementation of Article 6.4 allows countries and companies to engage in international carbon markets with greater confidence. With established standards and removal guidance, this mechanism provides transparency and legitimacy to carbon credit transactions — factors that are crucial for private investors seeking stable returns.

For many companies, carbon markets represent an opportunity to align financial goals with sustainability commitments. Rachel Mountain, speaking at an event titled, Connecting the Dots between Policymakers in the Global South and the International Private Sector, noted that policy and regulatory clarity are essential for attracting large-scale private investment, as it enables companies to project long-term financial returns without fearing abrupt policy shifts. However, she also emphasized that fragmented regulations across regions could deter investors, stressing the need for a harmonized approach to carbon markets.

Beyond the corporate level, carbon markets offer developing countries a pathway to access private finance. Through revenue generated by carbon credits, countries can fund sustainable projects that might otherwise remain financially unviable. Tajiel Urioh from South Pole explained at the International Emissions Trading Association (IETA) Pavilion how carbon credits provide critical financial support for locally tailored projects in low- and middle-income countries. He highlighted the importance of setting up robust national registries to coordinate with international regimes, ensuring that carbon credit revenue flows effectively and sustainably to support these communities.

Despite the optimism, negotiations around the specifics of carbon market regulations are ongoing. Indigenous communities and climate justice advocates have expressed concerns about carbon markets, fearing they may lead to exploitation of land and resources without adequate protections for local populations. Many argue that, without strict safeguards, carbon markets could enable companies to offset emissions without making meaningful reductions, thus allowing “business-as-usual” emissions in wealthier countries. These voices are pushing for continued dialogue and accountability measures within carbon market frameworks to ensure they uphold equity and respect for Indigenous lands and livelihoods — it will be key to see how Article 6.2 and 6.4 negotiations end by week two. 

The Path Forward: Mobilizing Trillions for Effective Climate Action

COP29’s discussions have underscored the vast scale of resources required to meet the NCQG and address the global climate finance gap. With projected funding needs estimated in the trillions, this COP has seen strong calls for wealthier, developed nations to increase their financial commitments. Many countries from the Global South, backed by climate justice advocates and protest groups at COP29, have stressed that high-emitting nations — particularly G20 members — should contribute a larger share, given their historic and ongoing emissions. The principle of “common but differentiated responsibilities” remains central, asserting that while all nations have a role, those with greater resources and historical emissions bear a heightened obligation to lead in funding climate solutions.

To meet these ambitious goals, private sector investment is seen as critical. Nadia Calviño, President of the European Investment Bank, speaking on green bonds and debt-for-climate swaps, emphasized that innovative financing methods are vital to meaningfully involve private investors. Similarly, a high-level panel held by the World Economic Forum discussed the importance of streamlined permitting, consistent carbon pricing, and risk mitigation strategies to create an investment-friendly landscape, particularly in infrastructure and energy sectors.

As I look ahead to week two, I will be closely following the continued negotiations surrounding the NCQG, which will ultimately determine the scale and structure of global climate finance commitments. The outcome of COP29 will be crucial in shaping how effectively the world mobilizes to fund a sustainable future, with the balance of public and private finance likely to serve as a determining factor.

COP29: There is Yet Hope

By: Prof. James Padilioni, Jr.

“Africa is NOT the Global South! Africa is the center of the world!” So exclaimed an attendee at the Yasunize Movement demonstration I observed at COP29 in Baku, Azerbaijan. Yasuní is a national park located in the Ecuadorean Amazon which UNESCO has declared a world biosphere reserve in recognition that Yasuní features the highest biodiversity of any singular ecosystem on our planet. In August 2023, the Ecuadorian people voted to halt all future oil drilling within the borders of Yasuní National Park, representing a threshold moment for a true transition away from a fossil fuel economy that does not involve the abstract mathematical manipulation of instruments via a carbon market. As such, “to Yasunize” has emerged as a new rallying cry for an environmental geopolitics that questions economic growth and dependence on oil as the only markers of development. Thus, it was evocative for this demonstration at COP29 to signal not only a new paradigm for just transition, but to reorient our global compass and our directional imagination of civilization away from the North-South stratification that constantly places the Global South in a position of extraction and need relative the political economic imperialism of the Global North, specifically North Atlantic modernity in its Euro-American latitudinal influence. In this new cartography of climate action, neither Africa nor Ecuador are the “Global South” relative to an overdeveloped Global North; these locations, and the stalwart climate activists that call them home, are the center of the world, leading us into whatever semblance of a sustainable future we may yet bequeath posterity — if we are so lucky.

Yasunize the World Demonstration @ COP29



I open this year’s reflections on COP29 for the Swarthmore @ COP blog with this anecdote because it signals the indomitable energy of resolution that many negotiators and delegates from the so-called Global South have taken upon themselves, especially in light of the impending second administration of Donald Trump. Our week 1 delegation left Swarthmore just 4 days after Election Day, traveling to Baku, Azerbaijan in a swirl of affect that threatened to derail the intentions of COP29 before it even began. Here, it may be useful to refresh our memory of “the long national nightmare” that was Trump 1.0: less than 18 months after the historic adoption of the Paris Agreement of 2015, President Trump pulled the United States from complying with our Nationally Determined Contributions both in our attempts to scale-down our fossil fuel dependence as well as our pledges to provide financing and cash payments to those developing nations of the Global South who need variously to adapt, mitigate, and/or respond to the losses and damages of climate change and extreme weather events. During the first Trump administration, the common sense sentiment began to emerge that it was necessary for the US, as the world’s largest and most-developed economy, to “reclaim the global lead” on climate action, with the lack of such leadership representing a stumbling block to the climate governance regime enacted by the UNFCCC. (The folks who honestly spout such rhetoric are usually blind to the American exceptionalism of their argument, and the patronizing, Marshall Plan-style way it addresses the globe, but I digress). The United States remained out of compliance with the Paris Agreement until President Biden signed the Inflation Reduction Act, the largest investment in climate resiliency in US history. President Biden, thus, made a triumphal return to COP27 in Sharm El-Sheik, Egypt, where he gave a speech from the plenary hall to thunderous applause. Now, just 2 years later, and with only 12-15% of the IRA’s funding appropriations actually paid out, the United States is, once again, on the brink of puling out of the Paris Agreement, and perhaps from leaving the UNFCCC regime entirely.

(I am old enough to have been a perspicacious 7th grader who observed President Clinton sign the Kyoto Protocol in 1997, the first binding multinational agreement on climate emerging from the UNFCCC. I am also old enough to have been a 10th grader who remembers the newly-elected President George W. Bush refuse to cooperate with Kyoto, and I recall the 95-0 senate vote against its ratification. The UNFCCC has watched the United States, like a geopolitical pendulum, swing both ways many times before, flaunting the climactic reality and thumbing its nose at the world.)

Environmental and Energy Study Institute Press Conference Panel featuring American politicians/policy makers

Thus, one might speculate the mood at COP29 would be grim, pessimistic, forlorn even. But instead, the energy here is one of urgent confidence, as the rest of the 198 Parties to the Conference are resolved to fill the void left by the withdrawal of Trump’s America from the global world. Indeed, one might even detect a whiff of “good riddance” on the part of the Parties who remain, steadfast in their conviction that we are the last generation of humans who can effectively hold planetary warming to an average increase of 1.5 degrees celsius (perhaps 2.0 would be a more realistic, yet less ideal benchmark).

To this end, the delegates and observers — including Swarthmore’s week 1 students — have engaged the conference in eager pursuit of keeping the intended goals of COP29, namely, settling the business of the New Collective Quantified Goal on Climate Finance (NCQG), a plan first agreed upon in 2015 to set a new goal building upon the floor of $100 B USD. Beginning in 2021, an ad hoc work program was established to facilitate technical discussions around the NCQG and to take stock of progress made in 2022 and 2023. The plan for this year is to tabulate these needs and set the NCQG — with or without the United States, this work must continue.

But what, exactly, is to become of the United States? I observed a press conference panel hosted by the Environmental and Energy Study Institute featuring Serena McIlwain, the Secretary of Environment for the state of Maryland, Wade Crowfoot from the California Natural Resources Agency, and Melissa Logan, mayor of Blytheville, AR, located along the banks of the mighty Mississippi River. These three American politicians and policymakers — two Black women and one indigenous man — instigated renewed hope as they confidently and boldly projected a plan of action at the state and local municipal levels to mobilize “boots on the ground” in support of maintaining America’s NDCs, despite the Trump Administration’s impending dereliction of duty. In particular, Mayor Logan passionately promoted the Mississippi River Cities and Town Initiative which includes a bipartisan collaboration between over 150 mayors whose towns and cities line the Mississippi River, one of the world’s most critical lifelines, a waterway whose transited goods supply 1/12 of the globe’s population with their necessary provisions. The work of sustainability will continue because it must!

Across the next two weeks, two groups of Swarthmore students will observe the proceedings of COP29, networking with likeminded advocates and documenting the progress of the NCQG. This blog will feature several of their reflections and form a digital guide for the broader Swarthmore community to follow. Additionally, our students will takeover the Swarthmore Instagram page, and we are planning a spring 2025 on-campus panel to help contextualize the stakes of COP29 for our local campus and borough community. Be sure to follow along!