At COP29 in Baku, the Azerbaijani Presidency introduced the Baku Finance Goal (BFG). The goal aims to direct $1.3 trillion in climate finance to developing countries every year by 2035.
This new target significantly increases the previous goal of $100 billion. It marks a major step forward in the fight against climate change.
Also read: Fresh Proposals on Climate Finance Targets Released at COP29
Key Features of the Baku Finance Goal
The Baku Finance Goal includes a central target for developed countries to contribute at least $300 billion per year to developing nations by 2035. This is a $50 billion increase over the previous draft. The goal specifically focuses on supporting the least developed countries (LDCs) and small island developing states (SIDS). It emphasizes accessibility, transparency, and fairness in the distribution of climate finance.
This landmark agreement comes after 48 hours of intensive diplomacy by the COP29 Presidency, led by Azerbaijan. It forms the core of a broader package of climate agreements, aiming to enhance global cooperation on climate action and pave the way for achieving the 1.5°C climate goal.
Also read: Urgent Agreement Needed on Climate Finance, Warns COP29 Negotiator
COP29 President’s Statement
COP29 President Mukhtar Babayev expressed pride in the successful outcomes, saying, “When the world came to Baku, people doubted that Azerbaijan could deliver. They doubted that everyone could agree. They were wrong on both counts. With this breakthrough, the Baku Finance Goal will turn billions into trillions over the next decade. We have secured a trebling of the core climate finance target for developing countries each year.”
He continued, “The Baku Finance Goal represents the best possible deal we could reach, and we have pushed the donor countries as far as possible. We have forever changed the global financial architecture and taken a significant step towards delivering the means to deliver a pathway to 1.5C. The years ahead will not be easy. The science shows that the challenges will only grow. Our ability to work together will be tested. The Baku Breakthrough will help us weather the coming storms.”
Impact of the Baku Finance Goal on Global Investment
The Baku Finance Goal is designed to unlock a new wave of global investment, particularly in climate solutions for developing countries. This funding will help nations mitigate and adapt to climate change impacts, accelerate clean energy transitions, and improve climate resilience. The agreement is expected to mobilize billions of dollars in climate finance, directly contributing to meeting global climate targets.
One of the key outcomes of COP29 was finalizing the Article 6 negotiations on carbon markets under the UN. If fully implemented, these markets could mobilize $1 trillion annually by 2050. They could also reduce the cost of national climate plans by $250 billion annually.
Another major achievement was establishing the Fund for Loss and Damage. This fund will start distributing money by 2025. It is a top priority for developing nations, especially small island states, LDCs, and African countries. The fund will provide crucial support for countries facing climate-related disasters.
Looking Ahead
The Baku Finance Goal is a critical milestone in global climate negotiations, setting the stage for increased climate finance in the coming decades. By increasing the flow of capital to developing nations, it is hoped that these countries will be better equipped to address the growing challenges of climate change.
As the global community moves forward, the real test will be in implementing these ambitious financial commitments and ensuring that funds are used effectively to achieve climate resilience and sustainable development.
