It’s 3 a.m. in Baku, and the fluorescent lights of the COP29 negotiations are casting long shadows. The deal is done—a $300 billion annual commitment from wealthy nations to help developing countries face the mounting challenges of climate change. For some, this is a landmark victory. For others, it’s a compromise so laden with concessions that it feels more like a defeat. The tension in the room reflects a global story: the complicated dance of hope and pragmatism that has come to define international climate cooperation.
Negotiators shuffle out of the cavernous meeting halls, their faces marked by exhaustion and a lingering sense of unease. They know this is not the triumph they had hoped for. But in the world of climate diplomacy, is it ever?
The Illusion of Progress
From the outside, a $300 billion pledge sounds transformative. The headlines trumpet it as a tripling of financial aid to developing nations—a bold step forward. Yet, the ink on the agreement barely dries before its limitations become glaringly obvious. Developing countries, particularly those on the frontlines of climate change, argue that this figure is a drop in the ocean. To truly “climate-proof” their economies and societies, they say trillions of dollars, not just billions, will be required.
They contend that the money promised at Baku doesn’t account for the cascading debts many of these nations already carry. No matter how favourable the terms, loans can plunge fragile economies deeper into financial despair. Grants and outright financial support, on the other hand, remain scarce, a stark reminder of the ever-present power imbalance between the Global North and South.
The cracks in the financial pledge reflect a larger issue: the inadequacy of the systems we’ve built to solve one of humanity’s most significant challenges. Like the markets for carbon credits, climate finance mechanisms are fraught with flaws. Baku was meant to address these shortcomings. Instead, it has exposed them.
Carbon Markets: The Great Promise and Peril
Running parallel to the financial negotiations was another battle that has been brewing for nearly a decade. COP29 also saw the finalisation of a new global carbon market system under the United Nations. On paper, it’s a triumph: a rules-based framework that allows nations and companies to trade carbon credits with safeguards to ensure accountability. It’s a significant evolution of Article 6 of the Paris Agreement, a long-awaited answer to how to prevent double-counting and ensure credits have real environmental value.
But as the details emerged, so too did the doubts. Critics were quick to highlight loopholes and weak safeguards. For example, Switzerland’s deal with Ghana to trade credits tied to clean cookstoves promised 3.2 million tons of emissions reductions. A closer look, however, suggested those figures were vastly inflated—by as much as 79%, according to Alliance Sud, a nonprofit watchdog.
It’s the kind of misstep that erodes trust in the entire system. An Lambrechts of Greenpeace summed it up succinctly: “Baku is infamously now an offsets COP, delivering carbon markets with loopholes and a lack of integrity.”
But is this truly a failure, or is it simply part of the messy, iterative process of building a better system? After all, markets—like ecosystems—are complex and prone to growing pains.
The Voluntary Market: Lessons in Fragility
The voluntary carbon market offers a cautionary tale as the new UN-backed system begins to take shape. Initially heralded as a way to channel private capital into climate solutions, it has instead become a hotbed of greenwashing allegations and shattered promises. Many voluntary credits fail to deliver the emissions reductions they claim, driving buyers—giant corporations—out of the market or into the arms of more expensive but higher-quality credits.
This exodus underscores a fundamental truth: integrity matters. A market without trust is destined to fail. In Baku, negotiators tried to incorporate safeguards into the core of the new system, but their efforts fell short of what many environmental advocates had hoped. It’s a bitter pill to swallow for those who understand that carbon markets could play a pivotal role in the global climate response—if only they worked as intended.
Climate Finance and Carbon Markets: Two Sides of the Same Coin
At first glance, the stories of the $300 billion climate finance deal and the new carbon market system seem distinct, connected only by their shared presence at COP29. But in reality, they are deeply intertwined. Both represent attempts to solve the same problem: how to mobilise resources on a scale commensurate with the challenge of climate change.
The climate finance pledge aims to unlock public and private funds to help developing nations adapt to rising seas, scorching heat, and other climate impacts. The carbon markets, meanwhile, offer a mechanism to direct capital toward emissions reductions in the most cost-effective ways. Together, they form a feedback loop. Robust and trustworthy carbon markets could attract private investors, increasing the pool of available climate finance. Conversely, adequate climate finance could help build the infrastructure and governance needed to ensure carbon markets operate with integrity.
Yet, in their current forms, both systems are plagued by shortcomings that threaten to undermine their effectiveness. For the climate finance pledge, it’s the gap between promises and needs. For the carbon markets, it’s the persistent question of quality and trust. If these issues remain unresolved, the potential synergy between the two systems will remain unrealised.
The Existential Question
As the COP29 negotiations drew to a close, a sobering reality began to set in. While significant, the promises made in Baku are unlikely to be enough to avert the worst impacts of climate change, which isn’t just a matter of money or market mechanics; it’s a question of global will.
The election of Donald Trump—and his subsequent threat to pull the United States out of the Paris Agreement—cast a long shadow over the talks. It served as a stark reminder that political winds can shift suddenly, derailing even the best-laid plans. Inflation, rising populism, and fiscal constraints in wealthy nations add further layers of complexity. These forces threaten to erode the fragile consensus that underpins global climate cooperation.
Against this backdrop, the compromises made in Baku can be seen in a different light. Perhaps they are not failures but rather reflections of the broader struggle to align national interests with global needs. They are the best we can hope for in a world where cooperation is both necessary and challenging.
Toward COP30: Connecting Climate and Biodiversity
As the world turns its attention to COP30 in Belém, Brazil, a new narrative is beginning to take shape—one that seeks to connect the fights against climate change and biodiversity loss. These issues are deeply entwined. Healthy ecosystems, from rainforests to coral reefs, are vital for carbon storage and climate resilience. Conversely, climate change is a significant driver of biodiversity loss.
The Amazon, often referred to as the “lungs of the Earth,” is an apt setting for this convergence. It embodies both the promise and peril of global environmental efforts. Protecting its vast ecosystems could provide a blueprint for tackling the twin crises of climate and biodiversity.
As Lambrechts of Greenpeace put it, “At COP30, it’s time to connect the climate and biodiversity fights.” This call to action resonates beyond the halls of negotiation. The story of Baku, with all its triumphs and tribulations, is ultimately a story of unfinished business. The $300 billion pledge and the new carbon markets are steps forward but not enough. The path ahead will require bold thinking, relentless effort, and a willingness to confront uncomfortable truths.
The Long Game
In the end, the legacy of COP29 will not be determined by the agreements reached in Baku but by what happens next. Will nations follow through on their commitments? Will carbon markets evolve into trustworthy tools for climate action? Will the global community finally muster the collective will to confront the full scale of the challenge?
These questions remain unanswered. But if there is one lesson to be drawn from Baku, it’s that progress, however imperfect, is still progress. And in the fight against climate change, we can’t afford to take progress for granted.