As Conference of Parties (COP29) approaches, the world’s attention is once again focused on the challenges of addressing climate change and fostering sustainable economic growth.
Set to be held in Baku, Azerbaijan, COP29 will build on the momentum of previous summits, but with a focus on harnessing the economic benefits of the energy transition.
This year's conference will centre around scaling up climate finance, mobilising investments in renewable energy, and ensuring that countries worldwide have the resources needed to transition away from fossil fuels while supporting local, state, and national economies.
Climate finance remains a cornerstone issue at COP29, with developing nations urgently calling for increased support to meet their climate adaptation and mitigation needs.
The outdated US$100 billion annual climate finance target set in 2009 has long fallen short of the actual needs. According to recent reports from the UN Environment Programme (UNEP) and International Energy Agency (IEA), developing nations require between US$500 billion to US$1 trillion per year by 2030 to effectively tackle climate change and invest in renewable infrastructure.
COP29 will therefore be crucial in setting a new, more ambitious climate finance goal, known as the New Collective Quantified Goal (NCQG), expected to be unveiled by 2025. (UNEP, IEA, Climate Finance Delivery Plan, 2023)
The transition to renewable energy is more than an environmental imperative; it represents a significant economic opportunity.According to the International Renewable Energy Agency (IRENA), investments in renewables are projected to reach US$1.7 trillion in 2024 alone, surpassing the US$1 trillion expected to be invested in fossil fuels for the same period.
This shift toward clean energy is creating a new era of economic growth, particularly for countries rich in renewable resources.
In countries like Australia, for instance, renewable energy investments have already become a driver of economic development. Australian Bureau of Statistics shows that renewable energy projects generated over 30,000 new jobs in 2023, with the number expected to grow as the country continues its push toward a low-carbon economy (IRENA, Australian Bureau of Statistics, 2023). COP29 is expected to amplify this trend globally, with world leaders encouraged to set clear targets for renewable energy expansion that could unlock millions of new jobs worldwide.
Carbon markets represent another significant opportunity to fund the energy transition while providing economic incentives for emissions reductions.
COP29 will prioritise the operationalisation of Article 6 of the Paris Agreement, which outlines the framework for international carbon markets. The World Bank estimates that a well-functioning global carbon market could mobilise an additional US$250 billion annually by 2030, offering both public and private sectors a way to invest in emissions reductions (World Bank, 2023).
Successful implementation of these carbon markets would enable countries and companies to trade carbon credits, incentivising investment in green projects. This system could be especially beneficial for developing countries, which would gain access to new revenue streams by selling carbon credits to more industrialised nations needing to offset their emissions.
As countries transition to renewable energy, the demand for clean energy technologies such as solar panels, wind turbines, and batteries issurging. In 2024, the global market for renewable energy technology is projected to exceed US$600 billion, driven by expanding clean energy infrastructure across both developed and emerging economies. The solar sector alone is expected to generate 450,000 new jobs globally by 2025 (IEA, 2024).
This transition offers economic opportunities for countries that are strategically positioned in the clean energy supply chain.
With climate finance, carbon markets, and renewable energy expansion at the forefront, COP29 is set to shape not only the future of global climate action but also the trajectory of economic development worldwide.
If successful, the outcomes of COP29 could stimulate trillions of dollars in sustainable investments, create millions of new jobs,and pave the way for a more resilient global economy.
éthica capital, Green Bond Corporation SARL (GBC) and Carbon Capital Corporation (CCC)
éthica capital, Green Bond Corporation SARL (GBC) and Carbon Capital Corporation (CCC) form part of The Green Bond Corporation Group (GBC Group). Combining deep expertise and global thought leadership in sustainable finance, infrastructure development and carbon-based financing that aligns with your environmental and humanitarian goals, empowering your business to achieve greater success and create a meaningful positive impact.
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