This article discusses the scientific mechanisms driving climate change, its environmental and socio-economic impacts, and strategies to mitigate its effects. It also highlights the role of climate finance in transitioning to a low-carbon, climate-resilient economy. The article discusses international climate policies, technological innovations, and financing mechanisms for mitigation and adaptation efforts, particularly in developing countries.
The 29th Conference of the Parties (COP29) in Baku, Azerbaijan, in 2024 is a pivotal moment in the global effort to combat climate change. The summit, organized under the UN Framework Convention on Climate Change, is expected to host over 25,000 delegates from nearly 200 countries, working towards limiting global warming and addressing climate change impacts.
1. Introduction
Climate change refers to long-term shifts in global or regional climate patterns, particularly those seen from the mid to late 20th century onwards, largely due to increased levels of atmospheric carbon dioxide (CO₂) produced by the use of fossil fuels. The phenomenon is now widely recognized as a consequence of human activities that disrupt the Earth’s natural systems. This paper reviews key scientific concepts underpinning climate change, evaluates its impacts across various sectors, explores mitigation and adaptation strategies, and highlights the critical importance of climate financing in addressing these challenges. The upcoming COP29 in Baku, Azerbaijan, presents an opportunity for renewed global commitments.
2. Scientific Basis of Climate Change
The science of climate change is rooted in the greenhouse effect, where greenhouse gases (GHGs) such as carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O) trap heat in the Earth’s atmosphere, leading to global warming. Since the Industrial Revolution, CO₂ concentrations have risen from pre-industrial levels of approximately 280 ppm to over 420 ppm in 2024, resulting in a significant increase in global temperatures.
Recent reports by the Intergovernmental Panel on Climate Change (IPCC) highlight that the Earth’s temperature has increased by about 1.2°C since the late 19th century, with profound consequences for ecosystems and human societies. Feedback loops, such as ice-albedo feedback and the release of methane from thawing permafrost, further accelerate warming.
The backdrop for COP29 is a world in crisis, with rising temperatures, extreme weather events, and widespread environmental degradation becoming the new norm. Under the 2015 Paris Agreement, countries committed to keeping global temperature rise to well below 2°C and ideally to 1.5°C above pre-industrial levels. However, recent reports from the Intergovernmental Panel on Climate Change (IPCC) warn that the world has already warmed by 1.1°C, and without stronger actions, we are on track for a 2.4°C increase by the end of the century.
For Azerbaijan, the host nation, COP29 is both a challenge and an opportunity. As a country historically reliant on fossil fuel exports—particularly oil and gas, which account for 90% of its export revenues—Azerbaijan faces the dual challenge of reducing emissions while maintaining economic stability. The country has set ambitious goals to derive 30% of its electricity from renewable sources by 2030, including significant investments in solar and wind power.
3. Impacts of Climate Change
The impacts of climate change are multifaceted and global in scope. Some of the major areas affected include ecosystems and biodiversity, sea-level rise, agriculture, food security, and human health. The long-term economic consequences are equally severe, especially in vulnerable regions, where climate-related disasters, such as floods and droughts, undermine development gains and exacerbate poverty.
Strengthening Nationally Determined Contributions (NDCs): At COP29, countries are expected to update their Nationally Determined Contributions (NDCs), which outline their targets for reducing greenhouse gas emissions. Current pledges would still result in a dangerous temperature rise of 2.4°C by 2100, far exceeding the Paris Agreement goals. Major emitters such as China, the United States, the European Union, and India, which together account for more than 55% of global emissions, will be under pressure to increase their commitments. Azerbaijan, as the host, will have the opportunity to showcase its efforts to cut emissions by 35% by 2030, compared to 1990 levels.
4. Climate Change Financing
Financing plays a crucial role in enabling both mitigation (reducing GHG emissions) and adaptation (adjusting to the impacts of climate change) efforts. The costs of addressing climate change are substantial, requiring trillions of dollars in investment by mid-century. According to the International Energy Agency (IEA), an estimated $4 trillion in annual investment in clean energy and low-carbon technologies is needed by 2030 to meet global climate goals.
4.1. Sources of Climate Finance
Climate finance refers to local, national, or transnational financing drawn from public, private, and alternative sources to support climate action. The two main types of financing are:
Public Finance: Governments and multilateral development banks (MDBs) provide financial support for climate projects, particularly in low- and middle-income countries. The Green Climate Fund (GCF), established by the United Nations Framework Convention on Climate Change (UNFCCC), aims to channel $100 billion annually by 2020 from developed to developing countries, though this target has not yet been fully met.
Private Finance: The private sector, including institutional investors, banks, and businesses, plays an increasingly important role in financing clean energy, green infrastructure, and sustainable practices. The expansion of green bonds, sustainability-linked loans, and impact investing has helped mobilize private capital for climate-related projects.
4.2. Investment Gaps and Needs
Despite the increase in climate finance flows, there remains a significant financing gap, particularly for adaptation projects in developing countries. According to the United Nations Environment Programme (UNEP), adaptation finance needs are expected to reach $140-300 billion per year by 2030. However, current adaptation financing lags far behind these requirements, with only about $30 billion available annually.
Investment gaps are most pronounced in sectors such as agriculture, water management, and disaster risk reduction, where long-term, concessional financing is essential. Many developing countries face constraints in accessing affordable finance for these projects, limiting their ability to build climate resilience.
4.3. Innovative Financing Mechanisms
Innovative financing mechanisms have been developed to bridge the gap between climate financing needs and available resources. Some of these mechanisms include:
Green Bonds: Green bonds are debt instruments issued to finance projects with environmental benefits, such as renewable energy, energy efficiency, and clean transportation. The global green bond market has grown rapidly, reaching over $1 trillion in cumulative issuances by 2020. These bonds attract institutional investors looking for sustainable investment opportunities.
Blended Finance: Blended finance combines public and private sector funding to de-risk investment in climate projects. By leveraging concessional financing from development banks, blended finance structures reduce the perceived risk for private investors, thereby mobilizing additional capital for climate solutions in high-risk regions.
Carbon Pricing: Carbon pricing mechanisms, such as carbon taxes or emissions trading systems (ETS), incentivize businesses and industries to reduce their carbon emissions. Revenues generated from carbon pricing can be reinvested in climate mitigation and adaptation projects.
Climate Risk Insurance: Insurance schemes aimed at protecting vulnerable countries and communities from climate risks, such as crop failure or extreme weather events, provide a safety net that can help manage climate-induced economic shocks. The African Risk Capacity (ARC) and other regional insurance pools are examples of this approach.
The issue of climate finance remains a sticking point, particularly for developing nations. Developed countries had promised to provide $100 billion per year by 2020 to help poorer nations adapt to climate change and transition to cleaner energy. However, as of 2023, the full amount has not been delivered, with a gap of approximately $17 billion still unfilled. Climate finance will be a major theme at COP29, with a focus on how to scale up funding to help vulnerable nations, especially those in Central Asia and Africa, deal with the consequences of climate-related disasters.
Loss and Damage: One of the most significant outcomes of COP27 was the creation of a “Loss and Damage Fund,” designed to compensate countries disproportionately affected by climate change. According to the World Bank, climate-related disasters have caused damages of over $2.56 trillion between 2000 and 2019. As host of COP29, Azerbaijan will play a key role in ensuring this fund is adequately financed and operationalized, providing much-needed support to nations hit hardest by climate catastrophes.
Just Transition: The concept of a “just transition” focuses on ensuring that the shift to renewable energy is fair for all, particularly workers in fossil fuel industries. Globally, the fossil fuel sector employs 30 million people, and the transition to greener energy is expected to create 24 million jobs by 2030, according to the International Labor Organization (ILO). Azerbaijan’s economy, deeply tied to oil and gas, will be in the spotlight as it works to retrain its workforce and create new opportunities in the renewable energy sector.
5. Global Climate Policy and Governance
International cooperation is crucial to addressing climate change, given its transboundary nature. The 2015 Paris Agreement, adopted under the United Nations Framework Convention on Climate Change (UNFCCC), represents a landmark in global climate policy, with the goal of limiting global temperature rise to well below 2°C above pre-industrial levels, and ideally 1.5°C. Achieving these targets requires sustained financial support from developed countries to ensure that developing nations can meet their climate goals.
6. Mitigation and Adaptation Strategies
In addition to the role of financing, several strategies are being implemented to mitigate climate change, such as transitioning to renewable energy, enhancing carbon sequestration, and improving energy efficiency. Adaptation efforts focus on building resilience in the face of climate-related risks. Financing mechanisms, both public and private, are critical to the success of these initiatives.
As global temperatures rise, the need for adaptation measures has never been greater. The UN Environment Programme (UNEP) estimates that adaptation costs in developing countries could reach $140-300 billion annually by 2030. Azerbaijan, facing rising sea levels in the Caspian Sea and increased desertification, will use COP29 as a platform to demonstrate its efforts to enhance climate resilience through improved water management and infrastructure.
Azerbaijan is working to develop 1.5 gigawatts of wind and solar capacity by 2030, balancing its reliance on oil and gas with its commitment to renewable energy. The city’s location on the Caspian Sea also highlights climate challenges faced by coastal nations, such as rising sea levels and water scarcity. COP29 also underscores the need for stronger regional cooperation in addressing common environmental and economic challenges. Youth and grassroots movements, such as Fridays for Future, will play a central role in the event, with 64% of young people viewing climate change as a “global emergency.”
7. Conclusion
Addressing climate change requires not only urgent and coordinated global efforts to mitigate emissions and adapt to its impacts but also substantial financial resources to support these actions. While technological innovations and policy frameworks provide pathways for reducing greenhouse gases, the scale of the challenge demands transformative financing solutions. Mobilizing climate finance, particularly for developing countries, is critical to ensuring a sustainable and climate-resilient future.
COP29 in Baku, Azerbaijan, represents a critical juncture in the global fight against climate change. With the Paris Agreement targets hanging in the balance and the impacts of climate change worsening, the decisions made at this summit will have long-lasting implications for the future of the planet. The conference will focus on strengthening NDCs, scaling up climate finance, ensuring a just transition for workers, and operationalizing the Loss and Damage Fund to support vulnerable nations.
As the host, Azerbaijan has a unique opportunity to showcase its climate ambitions and demonstrate how fossil fuel-dependent economies can transition toward sustainability. The world will be watching Baku closely, hoping that COP29 marks the moment when global leaders rise to the occasion and take the bold actions necessary to secure a safer, more resilient future for all.
