COP29, held in Baku during November, underscored both the remarkable progress and the persistent challenges in the global journey toward a net-zero future. The ETC attended the first week of the summit, participating in various events with partners such as DP World, Iberdrola, SSE, National Grid, and TERI, speaking across multiple topics, including NDCs and climate finance, power system decarbonisation, regional transitions, and industrial decarbonisation. We also reflected these topics in media engagements with the Financial Times, Economist, Guardian, CGTN, Reuters, ESG Investor, and Bloomberg, among others. To top it all off, we hosted an insightful, frank, cross-regional panel event on supply chains and trade, with a diverse set of expert perspectives from the RMI, ECF, Adani Green Energy, and Longi.
This year’s conference highlighted two contrasting narratives: the rapid technological advances driving the energy transition, against the slower inching forward of political negotiations. In this piece, we share some reflections on the outcomes of COP29 and our experience on the ground.
Energy transition momentum is building
The overwhelming sense from the ground at COP29 was of the energy transition beginning to move, with a focus on the practical actions and enablers of the transition. Key technologies such as solar photovoltaics (PV), batteries, and electric vehicles (EVs) continue to accelerate – with costs falling and the pace of deployment increasing. Solar installations are surging globally – and not just in the usual suspects – for example, Pakistan saw an unexpected boom in rooftop solar this year. BNEF estimates 600 gigawatts of solar PV were installed worldwide in 2024, up 33% from 2023, as module prices have fallen to record lows. Similarly, EVs are advancing faster than anticipated. In Southeast Asia, over 40% of two-wheelers and over 80% of the three-wheelers sold in 2023 were electric, making this vehicle segment on track to meet a net-zero emission fleet by 2050 without additional policy.
Discussions in Baku demonstrated increasing confidence in fossil-free power systems reaching net zero quicker than previously thought:
- Indonesia announced a plan to phase out coal power plants within 15 years, bringing forward the target date from 2056 to 2040.
- The grids and storage pledge signed by 58 countries so far, including US, UK, Germany, Brazil, UAE and Saudi Arabia, exemplified growing recognition of the need for robust grid infrastructure and energy storage to support renewable-dominated power systems.
- And the UK shared its world-leading 2030 power system decarbonisation target, which will only be realised with rapid acceleration away from fossil fuels and deep investment in its clean energy industry.
These commitments and analysis reflect a broader consensus that the “age of electricity” is upon us. The energy transition is underway and the core building blocks of net-zero energy systems are falling into place.
Other areas only inched forward
In comparison, progress on the negotiated outcomes – the core of every COP meeting – was more limited. Lengthy deliberations led to relatively modest results, raising concerns about stagnation and regression. The geopolitical context remained challenging: news of Trump’s re-election broke the week before and overshadowed discussions. Azerbaijan, having only 11 months to prepare and given its status as a fossil fuel producer, struggled to lead ambitious negotiations. Some countries were seen as obstructing progress, particularly regarding the phase-down of fossil fuels. During the first week, some leading climate policy experts explicitly stated that the COP process was “no longer fit for purpose”.
Despite this, there were some important steps forward taken and noteworthy agreements:
- Article 6: The finalisation of the rule book governing international carbon offset trading (Articles 6.2 and 6.4) was a significant development, as it had been outstanding since the Paris Agreement in 2015. Article 6.2 allows countries to trade emissions reductions and removals with each other, while Article 6.4 establishes a Supervisory Board led by the UN to oversee the global market for carbon trading projects. However, these outcomes do little to address the larger issue of who will buy these offsets and at what scale. The demand and supply for carbon removal credits still remain uncertain.
- Climate Finance: A major part of the COP29 negotiations focused on reaching a new climate finance agreement, for high-income countries to financially support lower-income countries to deliver on climate targets. The 2025 deadline for this new agreement was set in the Paris Agreement, which also specified a floor at $100 billion per year. The New Collective Quantified Goal (NCQG) was successfully agreed at COP29 and targets $300 billion per year by 2035 from developed countries and an overall climate finance envelope of $1.3 trillion per year by 2035 towards developing countries. However, the relative role of different types of finance within these targets —whether from private, public, or MDB sources— and where funds will be targeted remains unclear, indicating the further work needed to clarify precise commitments in future agreements. As we highlight in our NDCs, NCQG, and Financing the Transition briefing note, the sources of finance should be well-defined and there should be clarity on the spending for mitigation, adaptation and loss and damage purposes for greater transparency and effectiveness.
However, in other areas, progress failed to reach more optimistic expectations:
- UAE Consensus: COP28 committed to triple renewable energy capacity by 2030, double energy efficiency improvement and transition away from fossil fuels. Despite efforts, these ambitions were not restated in the COP29 cover text and remain to be picked up at COP30 and in the next round of Nationally Determined Contributions (NDCs).
- NDCs: Although the next round of NDCs is due in February 2025, there was hope that countries would come out with early and ambitious submissions to generate momentum ahead of the deadline. Instead of waves, there were droplets. The UK committed to an 81% reduction target below 1990 levels by 2035 but has yet to share the details underpinning this. Only two other countries, the UAE and Brazil, shared early NDCs. This puts more focus and pressure on the deadline in early 2025. ‘NDCs 3.0’ must provide greater ambition and granularity to accelerate progress and scale finance.
COP29 delivered some promising pledges on grids and storage, carbon offset trading, and climate finance. However, COP has never been, and likely never can be, a perfect solution. Within a tricky geopolitical context, the summit did not deliver the needed clarity and ambition to meet climate goals.
But COP29 did show that the ‘how’ of climate action is now firmly on the agenda and starting to fall into place. The energy transition is already a global story, with communities taking steps worldwide. Many real-life examples of positive progressive action were shared by COP participants, showing that the transition is already underway globally.
As we look forward to COP30, it is imperative to push for more ambitious commitments, increasing granularity on how commitments will be delivered and clearer frameworks to accelerate the global transition to a sustainable future. Several topics will remain in focus next year: developing ambitious and granular NDCs in early 2025, further clarity on the NCQG – especially in the sources and types of finance flows included and the Baku to Belem Pathway to $1.3 trillion, and recommitment to the UAE consensus to triple renewables capacity and phase down fossil fuels.