The recently concluded COP29 in Baku marked another critical milestone in global climate action with mixed outcomes. Developed nations committed to channeling at least $300 billion annually into developing countries by 2035 for climate action. However, this fell short of the $1.3 trillion annual target demanded by developing nations.
The climate summit also finalized Article 6 on carbon markets, operationalizing the Paris Agreement nearly a decade after its inception. Meanwhile, key decisions on the global stocktake and fossil fuel transition were postponed to COP30 in Brazil. The negotiations occurred amidst political tensions, including Donald Trump’s re-election and potential U.S. withdrawal from the Paris Agreement.
Below we share our six key takeaways from this year’s climate talks.
Article 6: Carbon Markets Take Center Stage
Article 6 of the Paris Agreement, which deals with carbon market mechanisms, took center stage at COP29. After years of negotiation, the summit finalized mechanisms for global carbon trading.
Article 6.2 governs direct country-to-country carbon credit trading, while Article 6.4 establishes the Paris Agreement Crediting Mechanism (PACM), a centralized carbon market under UN supervision. It allows countries, corporations, and individuals to trade emission reduction units, referred to as A6.4ERs (Article 6.4 Emission Reductions Units).
The PACM introduces enhanced safeguards, including sustainable development tools and stricter methodologies to prevent “locking-in” high emissions. For example, it enforces baseline adjustments and “additionality” checks, ensuring projects generate genuine emission reductions.
These features aim to avoid pitfalls of past carbon market mechanisms, like the Clean Development Mechanism (CDM). Some projects under the CDM, such as afforestation, may transition into the PACM if they meet updated removal standards.
To prevent double-counting of credits, stringent rules for “corresponding adjustments” were introduced. For example, when a country sells emission credits, it must deduct the equivalent reductions from its own accounting, ensuring transparency and integrity.
Despite progress, experts remain cautious. While negotiators hailed the deal as a milestone, critics argue it oversells the mechanism’s potential to deliver large-scale mitigation. Concerns persist over transparency, particularly under Article 6.2, where “cooperative approaches” could lack stringent oversight.
To address these concerns, COP29 decisions require enhanced reporting and transparency in Article 6.2 activities and encourage swift finalization of PACM methodologies by 2025. These measures are pivotal for building trust and ensuring that carbon markets contribute meaningfully to global climate goals.
- Additionally, a “Share of Proceeds” mechanism was adopted, channeling 5% of transaction volumes and 3% of issuance fees into the Adaptation Fund. This provides critical resources for climate resilience in vulnerable regions while fostering global emissions reductions.
A New Era for Climate Finance
One of the most anticipated outcomes of COP29 was the agreement on a new collective quantified goal (NCQG) for climate finance. This goal seeks to replace the $100 billion annual target set at COP15, which had been criticized for being insufficient and inadequately mobilized. The NCQG represents a more dynamic, needs-based approach to climate financing.
At COP29, a new global climate finance target was introduced, aiming to raise $300 billion annually for developing countries by 2035. The goal includes public funds, development bank loans, and private investments mobilized by governments.
The NCQG has been a point of contention in climate talks. Developed countries are expected to provide significant funding, but developing nations argue that trillions of dollars are needed for their transition to cleaner economies.
The agreement also allows for “voluntary” contributions from nations like China, which have not traditionally provided climate finance.
Disagreements over the size and scope of the target caused delays and frustrations, with several drafts and revisions circulating before reaching a final agreement. Developed countries argue that global efforts must include a diverse range of contributors. As Jacob Levine, a senior director for climate and energy at the White House, stated:
“When you consider the magnitude…we need people to contribute, to do their fair share and to recognize the opportunity to work together.”
In contrast, developing nations, led by groups like the G77 and China, have insisted that developed countries bear the primary responsibility. Ali Mohamed, African Group Chair, remarked:
“We need equitable access for all developing countries. Cherry-picking certain groups won’t solve the global climate crisis.”
- The final agreement urges contributions from all sources, public and private, to meet a broader target of $1.3 trillion annually by 2035.
Mitigation Work Programme: Accelerating Action
The Mitigation Work Programme (MWP), established at COP26, received renewed attention at COP29. Delegates agreed to expand efforts to enhance renewable energy deployment and phase down unabated fossil fuel use.
However, progress has been limited to workshops and discussions. At COP28 in Dubai, negotiations faltered over whether the MWP should convey high-level political messages or remain strictly procedural. This stalemate carried into the Bonn negotiations in June 2024, with disagreements centering on linking the MWP to the global stocktake and its outcomes.
At COP29, these disputes persisted, particularly over including references to transitioning away from fossil fuels. Developing nations, represented by groups like the LMDCs and Arab states, opposed such language, citing concerns over top-down mandates.
Meanwhile, developed nations sought to integrate global stocktake results and emphasize stronger NDC updates. Paragraph 32 of an informal note, which mentioned the fossil fuel phaseout, proved particularly divisive, stalling discussions.
Despite efforts to revive negotiations in the summit’s second week, the final text (shown below) offered minimal progress. High-level political messaging was softened, with no explicit mention of the stocktake or fossil fuels.
While the dialogues under the MWP, focused on urban systems, were deemed productive, the adopted text primarily reaffirmed procedural elements, leaving substantial mitigation ambitions largely unresolved.
Adaptation: Scaling Resilience
Adaptation is one of the significant COP29 outcomes. Discussions focused on the Global Goal on Adaptation (GGA) and National Adaptation Plans (NAPs), yet progress was hindered by disagreements. The UAE-Belém work program, introduced at COP28, aims to establish indicators for adaptation targets, including resilience in water, ecosystems, and cultural heritage.
Midway through this two-year initiative, countries clashed over including “means of implementation” (MOI)—primarily financial support—and the concept of “transformational adaptation,” which developing nations feared might create obstacles to funding access.
The outcome included the “Baku Adaptation Roadmap,” softening MOI language to “enablers of implementation” to balance developed countries’ demands for governance and transparency with developing nations’ calls for financial support. While this compromise acknowledged both sides, it left many countries dissatisfied, particularly those advocating for robust financial commitments.
NAP discussions, initially slated to conclude in week one, also experienced delays due to extensive disagreements. By week two, facilitators proposed procedural conclusions, deferring substantive decisions to Bonn in June 2025. Other adaptation-related matters, such as the adaptation fund and performance reviews, were similarly postponed.
The roadmap’s adoption and continued GGA discussions underscore adaptation’s complexity and urgency as climate impacts intensify. COP30 is expected to revisit unresolved issues, including financial commitments and equitable adaptation frameworks.
Loss and Damage Fund: A Historic Step
COP29 marked a turning point with the operationalization of the Loss and Damage Fund, initially agreed upon at COP27. This fund aims to provide financial support to nations suffering from climate-induced disasters such as hurricanes, floods, and sea-level rise.
The fund’s governance structure ensures equitable distribution of resources, prioritizing least-developed countries and small island developing states (SIDS). Discussions also explored innovative funding sources, including levies on fossil fuel exports and international shipping, to sustain the fund over the long term.
The operationalization of this fund underscores the principle of climate justice, acknowledging the disproportionate impact of climate change on vulnerable populations.
Still, loss and damage funding remained contentious at COP29. While the fund advanced with pledges rising to $759 million, developing nations criticized the insufficient funding.
UN chief António Guterres highlighted the lack of justice for vulnerable nations. He stated that the fund’s capitalization falls far short of addressing the need.
- According to a study, climate change damage costs the world between $1.7 trillion and $3.1 trillion each year by 2050.
Negotiators failed to include loss and damage in the new climate-finance goal (NCQG), as developed countries resisted expanding finance obligations. Discussions on the Warsaw International Mechanism (WIM) and Santiago Network stalled due to disagreements, with progress deferred to mid-2025.
The UAE’s Global Stocktake
The UAE-hosted conference underscored its role as a key stakeholder in global climate action through the first-ever global stocktake (GST). This assessment measured the world’s progress toward the Paris Agreement goals, providing a clear picture of where nations stand on mitigation, adaptation, and finance.
At COP29, climate talks became contentious as nations grappled with commitments from COP28’s GST. The UAE’s approach to discussions about fossil fuel transitions sparked debate.
Developed nations and vulnerable countries demanded stronger commitments for transitioning away from fossil fuels, while Saudi Arabia opposed the inclusion of specific fossil fuel language, emphasizing the need for finance-focused discussions. This clash led to diluted draft texts and an impasse on key issues.
In the end, the UAE dialogue was postponed until the 2025 talks, leaving many disappointed. However, COP30 in Brazil holds the potential for renewed momentum, especially in terms of accountability and climate action.
Conclusion
The COP29 outcomes in Baku delivered a mix of progress and challenges, with significant advancements in climate finance, carbon markets, and adaptation efforts. The outcomes reflect a growing recognition of the need for collective action to address the climate crisis.
- READ MORE: Article 6.2 at COP29: Singapore Partners with Gold Standard and Verra to Advance Climate Action
The focus now shifts to implementing these agreements and bridging gaps in ambition, funding, and delivery. As the world gears up for COP30, the lessons from Baku will serve as a critical foundation for driving forward the Paris Agreement goals.
The post COP29 Key Outcomes: Milestones, Setbacks, and What Comes Next for Global Climate Action appeared first on Carbon Credits.
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.
EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.
