Carbon credits and wrangling over agenda: Tough talks ahead at Cop29

Battle lines being drawn in early days of crunch talks

Cop29 runs until November 22 in Baku, Azerbaijan. AFP

Countries on the first day of Cop29 climate summit provisionally agreed on carbon-credit quality standards that could pave the way for a UN-supported carbon market.

This could, in theory, fund initiatives aimed at cutting warming emissions, but more talks on the issue are expected and a final deal is far from done, experts believe.

Cop29's first day saw prolonged wrangling over the conference agenda that forced the plenary session to be delayed repeatedly. Early negotiating positions began to be established that could determine how the climate summit in Azerbaijan unfolds.

The gavel was finally brought down on the agenda late on Monday, with the carbon markets move one of the main outcomes. But what does it mean and do the agenda delays tell us anything about the path ahead?

What does the carbon credits decision mean?

Article 6 of the 2015 Paris Agreement outlines how states can pursue voluntary co-operation to reach climate goals. It means countries could transfer carbon credits earned from cutting emissions to help meet their climate targets, the UN's Framework Convention on Climate Change (UNFCCC) says.

Talks, often tortuous, have continued about how this system might work since. In theory, it could allow countries or companies to fund projects in other nations that cut emissions.

They could then use credits from these projects to offset their own. Projects such as preserving mangroves or other carbon sinks could be funded, for example. The system also offers less developed countries vital funds to transition from unsustainable energy systems. But the idea has been seen as controversial and criticised by some as “greenwashing”.

What would the deal mean?

The tentative decision at Cop29 could lay the groundwork for a UN-supported international carbon trading market.

“This is not some bit of arcane UN bureaucracy,” said Simon Stiell, UN climate change chief, on Tuesday. “When operational, these carbon markets will help countries implement their climate plans faster and cheaper, driving down emissions,” he said, stating it was a “good start” to the talks. “There's more work to do on Article 6 and the process allows for all perspectives to continue.”

Bob Ward, policy director at the Grantham Institute for Climate Change at the London School of Economics, told The National the move signified progress after “many years of stalemate, and may be a sign that the rest of Cop29 will result in significant advances on key issues”.

Rob Moore, associate director of the E3G think tank in the UK, said more work was needed but the move was important to “build trust and avoid greenwashing”. He added: “This represents solid progress which has eluded Cop presidencies.”

However, Dr Simon Evans, deputy editor of UK-based Carbon Brief, warned that any agreement was not set in stone. “I'd caution against any implication that Article 6 is now finalised,” said Dr Evans. “The talks at Cop29 are far from over and could easily fail to reach agreement, as they did last year.

“The Cop29 presidency was hoping to choreograph an 'early win' like last year's deal on loss and damage. Instead, they got a messy agenda fight.”

Cop29 summit begins in Azerbaijan – in pictures

Why did agenda agreement take so long?

Climate talks are notorious for lengthy delays and the summit often extends past the formal end day. The agenda at a previous UN climate gathering in Bonn, Germany, was only agreed days into the meeting.

Dr Evans said the agenda fight was really a “proxy battle” over two key issues at the summit – finance and ambition. The UAE dialogue that aims to track progress from last’s year’s summit was part of the agenda wrangling.

“The likes of the EU and the Alliance of Small Island States (Aosis) see the UAE dialogue as a way to carry forward last year's stocktake outcome, including 'transitioning away from fossil fuels', whereas the African Group and Like-Minded Developing Countries such as China only want it to discuss finance,” said Dr Evans.

“The deal last night was to leave the UAE dialogue where it was on the agenda, under finance, but to add a footnote saying this placement didn't prejudge the scope of the discussions. While the presidency found a way to get the agenda agreed, that fight over finance v ambition is set to continue throughout the summit.”

Moustafa Bayoumi, climate change research fellow at the Anwar Gargash Diplomatic Academy in Abu Dhabi, said these delays will become more frequent. “The delay in the agenda adoption happens quite often in climate negotiations,” he said. “This is especially the case now as we are moving more towards implementation rather than setting targets.”

Hard work only just beginning

Cop29 President Mukhtar Babayev welcomed the decision on carbon credits but acknowledged there is “much more to deliver”.

The “much more” will refer to the huge finance goal that needs to be set. Trillions are thought to be needed to address climate change and fund a more sustainable future.

Many groups on the front lines of the situation have highlighted their plight. Aosis, for example, said neglecting the special circumstances of small-island, developing states in the debate jeopardises the survival of the world’s most vulnerable populations. “The stakes here at Cop29 are incredibly high,” said Aosis chairman Fatumanava Dr Pa'olelei Luteru.

“Cop29 must reinforce last year’s momentous agreement to transition away from fossil fuel and continue the momentum with a bold new climate finance deal that benefits us all.”