The annual UN climate conference will take place in Baku, Azerbaijan, from Nov 11 to Nov 22.

During COP29, negotiators from almost 200 countries will gather to discuss the nuts and bolts of how the Paris Agreement – the world’s climate pact – can be implemented to limit temperature rise, strengthen resilience against climate impacts and ensure support for developing countries.

In 2024, a key focus of the conference dubbed the “Finance COP”, will be money.

This is a reference to the key deliverable of the conference, which is to adopt a new climate finance goal to help vulnerable and developing countries combat climate change.

The Straits Times highlights a few key areas of negotiations expected at the conference and why they matter to Southeast Asia.

1. International climate finance

What it is:

The New Collective Quantified Goal (NCQG) on climate finance will replace the previous goal, agreed upon in 2009, where developed nations committed to channelling US$100 billion (S$132 billion) per year by 2020 to meet the needs and priorities of developing countries.

The Organisation for Economic Co-operation and Development (OECD) assessed that the US$100 billion goal was fulfilled only in 2022, two years after the deadline.

The UN evaluated that currently developing countries need around US$500 billion of climate finance annually. Estimates from other groups such as the World Resources Institute and African environment ministers go up to more than US$1 trillion a year.

With such a coffer on the table, the amount or quantum of the NCQG will be the key political question. Who the donor countries are and the ratio of public funding versus other sources of finance like investments, loans and private finance will also be on the negotiating table.

Another consideration is whether the NCQG will also include a sub-category for loss and damage. This refers to funds given to help compensate countries suffering from the impacts of climate change.

Discussions on loss and damage often take place under a separate negotiating track, and a major breakthrough at COP28 was the establishment of the loss and damage fund, which is currently at about US$790 million.

But at COP29, it is likely that discussions on loss and damage will spill into the NCQG track.

Why it matters:

Developing and least developed countries, including Small Island Developing States, disproportionately face the brunt of climate change impacts, especially with rising seas, storms and drought.

These Global South countries also have limited financial resources to switch from fossil fuels to renewables to decarbonise.

The bulk of global greenhouse gas emissions had come from developed countries that industrialised earlier. Therefore, the basis of the Paris Agreement related to the NCQG states that developed countries shall provide financial resources to assist developing countries with mitigation and adaptation.

Non-profits and advocates have said climate finance must not exacerbate developing countries’ existing debt burden.

According to non-governmental organisation Christian Aid, a major lesson from the previous US$100 billion goal is that climate finance had deepened levels of indebtedness in developing countries. In Latin America and the Caribbean, for example, 81 per cent of public climate finance for the region was in the form of loans.

Singapore has estimated that an annual funding gap of at least US$300 billion is needed for climate finance in Asia.

Classified as a developing country despite its high gross domestic product per capita, Singapore’s position on the NCQG is to contribute voluntarily while helping to unlock finance through innovative ways.

2. Carbon markets

What it is:

Carbon markets are governed under Article 6 of the Paris Agreement, which has been deeply contentious at COPs.

At COP28 in Dubai, Article 6 negotiations fell through due to deep divisions on several topics, which are expected to be hammered out at the upcoming summit.

Article 6.2 issues guidelines on the bilateral trade of carbon credits between countries. Article 6.4 creates a global carbon market overseen by a UN entity.

Under Article 6.2, some countries have argued for the right to revoke carbon credits once they have been issued, especially if carbon projects violate indigenous people’s land rights. Others are concerned this would lead to the double counting of carbon offsets – if carbon project-hosting countries were to revoke the carbon credits they sold and count them towards their own carbon reduction goals. Leeway to revoke credits can also affect investors’ confidence in a project.

Another issue to be tackled under 6.2 is the nature of international and national registries to document and track carbon trading between countries.

Some countries like the US and Singapore, which have a thriving private sector of registry service providers, want to limit the international and national registries to pure accounting functions.

Most countries do not like to depend on private entities and thus want the international and national registries to undertake credit transactions.

As for Article 6.4, various countries had concerns about the wording of the draft text related to the global carbon market. One issue was with the definition of carbon dioxide removals.

But some progress has been made. In early October, the 6.4 oversight body finalised key standards related to project methodologies and greenhouse gas removals.

COP29 needs to endorse those standards; only then can the global carbon market mechanism kick in in 2025.

Why it matters:

Countries with limited natural resources to decarbonise, like Singapore, need to tap carbon credits to meet their national climate targets. Singapore is collaborating with more than 20 countries on carbon credits, including South-east Asian nations such as Laos, the Philippines and Vietnam.

Carbon markets help to channel funds to nature-based and underfunded forest conservation projects that would not otherwise have been implemented due to factors such as insufficient policy and economic incentives.

Carbon projects can further the sustainable development of host countries, benefit local communities in terms of job creation and access to clean resources, and improve their energy security. This allows capital to flow to developing and least developed countries.

Having a global carbon market and harmonised standards to refer to could make it easier to shape carbon trading pacts. This would reduce confusion and uncertainties with existing carbon market regulations.

3. Mitigation

What it is:

Mitigation refers to one of two key prongs of climate action, such as bringing down the amount of planet-warming emissions. The other is adaptation.

Mitigation efforts include closing down coal plants, increasing renewable energy deployment or using carbon capture technologies.

At COP28 in 2023, countries agreed on a few global mitigation goals, including to triple renewable energy capacity and to double energy-efficiency improvements by 2030.

The UN has also urged countries to submit new, more ambitious, climate targets by early 2025.

As US-based think-tank World Resources Institute noted: “The UN summit in Baku is the last major opportunity to set clear expectations for what this next generation of (national climate targets) should aspire to.”

On Oct 24, the UN’s latest emissions gap report noted that if countries do not increase the ambition of their upcoming climate targets and start delivering on them immediately, the world is on course for a temperature increase of 2.6 deg C to 3.1 deg C above pre-industrial levels over the course of this century.

Climate scientists have said that warming must be limited to 1.5 deg C to avoid catastrophic climate change, which is already ravaging the planet.

At COP29, certain groups of countries, especially those vulnerable to the impacts of climate change, will likely urge nations, especially developed ones, to set more ambitious climate change targets.

Developed countries, on the other hand, are expected to argue that all nations, and not just them, should make more ambitious climate pledges.

As a result, it is likely this negotiation track would be closely interwoven with discussions on climate finance, since many developing countries have climate targets that are conditional on them receiving support to achieve them.

Why it matters:

No country is exempt from the impacts of climate change, and regions such as South-east Asia, where there are millions living in off-grid and coastal areas, could suffer disproportionately from the impacts of typhoons, coastal flooding and other climate issues.

If countries set more ambitious climate targets and deliver on them, it could help protect many communities from harsher climate impacts.

South-east Asia could also reap other benefits by ramping up renewable energy deployment, with the Asean power grid having the potential to enable sharing of renewable energy. Asean has a plan to increase renewable energy’s share in the region’s total primary energy supply to 23 per cent by 2025, up from the 15.6 per cent in 2022.

A US-Singapore feasibility study on energy connectivity in South-east Asia had assessed that building the Asean power grid will not only provide more green electricity, but also create new jobs, reduce air pollution from coal-fired power plants, and pump in significant investments for the energy sector.

These would include investments of US$2 billion annually for research and development, and US$1.4 trillion cumulatively to build electricity generation capacity.

The region’s manufacturing sector would also receive a boost, with greater demand for solar panels, batteries and cables.

4. Adaptation

What it is:

Adaptation, the other key prong of climate action, refers to actions that reduce the impact of climate change on communities.

These include early warning systems, which enable people to better prepare for and respond to extreme weather events, or building sea walls to keep out sea-level rise.

While the Paris Agreement is most known for its temperature target – which is to limit global temperature increase to preferably 1.5 deg C above pre-industrial levels – the agreement also has another target: establish a “global goal on adaptation”.

This goal aims to strengthen resilience to climate change and, at COP28, a set of adaptation targets was agreed upon for countries to achieve by 2030.

It includes strengthening resilience to water-related climate hazards, achieving climate-resilient food production, reducing climate impacts on ecosystems and biodiversity, and accelerating the use of ecosystem-based adaptation and nature-based solutions.

At COP28, countries were also urged to have their adaptation plans in place by 2030. “Experts say these ambitious targets will help direct support and finance to where it is most needed, accelerating action,” said the UN Environment Programme on its website.

But outstanding issues on adaptation currently centre on tracking progress – in terms of achieving targets and how they are funded.

What counts as adaptation finance is also not clearly defined, and estimates can differ based on organisations. Under the bucket of climate finance, most funds have flown to mitigation.

Estimates by the OECD show that 60 per cent of the climate finance from developed countries in 2022 went to mitigation. The UN’s Intergovernmental Panel on Climate Change (IPCC), however, estimated that only 7 per cent of total climate finance over the years has gone to adaptation.

At COP29, discussions on the global goal on adaptation are likely to be closely intertwined with discussions on the new climate finance target. The indicators of the global goal will be discussed at COP29 and will be adopted at COP30.

Why it matters:

South-east Asia is one of the most vulnerable regions to climate change impacts, with an estimated 77 per cent of the region’s total population of 2.62 billion living in coastal areas.

This makes them susceptible to climate change impacts such as coastal flooding from rising sea levels and typhoons that are expected to strengthen as the world warms.

The IPCC has warned that heatwaves are expected to become more frequent, intense and longer-lasting as global temperatures rise. Tropical regions, in particular, are expected to see heatwaves becoming more frequent as baseline temperatures are already high.

In April, the Thai authorities said at least 30 people died from heatstroke in the first few months of 2024.

But taking steps to soften the impact of these events can be costly. Singapore, for example, has estimated the cost of protecting its coastlines from sea-level rise to be more than $100 billion over 100 years.

In 2023, the UN estimated the costs of adaptation in developing countries to be in the range of US$215 billion per year this decade.

“As a result of the growing adaptation finance needs and faltering flows, the current adaptation finance gap is now estimated at US$194 billion to US$366 billion per year,” noted the UN in its 2023 Adaptation Gap report.

“At the same time, adaptation planning and implementation appear to be plateauing. This failure to adapt has massive implications for loss and damage, particularly for the most vulnerable.”

5. Nature and climate

What it is:

COP29 is bookended by two other UN conferences with major themes on nature. It is likely the role of nature in tackling climate change will be pronounced and interwoven with other issues such as mitigation and adaptation.

The UN’s biodiversity conference, COP16, concluded in Cali, Colombia, on Nov 1, while the global body’s ocean conference will take place in Nice, France, in June 2025.

The back-to-back events will underscore how the twin planetary crises – of nature loss and climate change – are intertwined.

For example, natural habitats such as forests and seagrasses can, through photosynthesis, take in and lock away planet-warming carbon dioxide from the atmosphere. Protecting these key sinks will be important in the climate battle.

Nature can also play a role in protecting communities from the harshest impacts of climate change. Mangroves, for one, are a nature-based solution to rising sea levels since these ecosystems can keep pace with sea-level rise.

Global environmental organisation The Nature Conservancy said it expects nature to take centre-stage at the conference, with more discussions on how nature can help vulnerable communities adapt to climate change impacts.

Why it matters:

South-east Asia is a hot spot for biodiversity on land and in the oceans.

Past studies have shown how the region is home to nearly 15 per cent of the world’s tropical forests by area, and has high levels of species endemism, referring to species found only in the region and nowhere else.

Take, for example, the orang utan, which is found only on the islands of Borneo and Sumatra. Various plant species are also unique to this region, such as the orchid Nervilia singaporensis – found only in Singapore.

But this tapestry of life is increasingly under threat from deforestation and other developments.

The discussions at COP29, such as those on international finance flows and carbon markets, could provide governments in the region with the resources needed to keep these habitats standing.

-In Association with ANN