The Baku climate talks came to a close with a sense of disappointment, yet within the shifting dynamics, China emerged as a potential leader in green finance. Simultaneously, the UN released a global transition plan guide for insurers, and various other significant developments took place. This special Cop29 roundup brings you all the details.

Uncovering the Hidden Stories of Baku's Climate Talks

Global South's Response to Disappointing Climate Finance Talks

The Cop29 summit in Baku ended on a sour note as a contentious $300bn annual climate finance deal was passed despite objections from global south representatives. This figure, to be provided by 2035, falls short of the $1.3tn experts deem necessary for effective climate action in developing economies. Adjusted for a 5% inflation rate, by 2035 the new collective quantified goal (NCQG) would amount to $175bn in today's terms, according to Fadhel Kaboub, senior adviser at Power Shift Africa. This barely exceeds the $163bn debt service costs African nations collectively face this year alone. The final agreement relies primarily on expanding loans and private capital, without a guaranteed grant-based component. This is despite calls from global south negotiators for substantial grant financing to avoid burdening the region with more debt and stalling global progress towards Paris Agreement targets. Wide-spread misrepresentation of grant financing as “charity” presents a significant obstacle. However, new research by academics at Cornell University and Imperial College London suggests that grant-based climate finance should be viewed as “an act of economic self-interest” as money invested to reduce emissions “anywhere in the world will reap long-term benefits”. Kaboub states: “If the historic polluters of the global minority do not get serious about its responsibilities, then [global south countries] may have to start restricting access to our strategic minerals and our markets, and start leveraging our collective economic weight to save the planet for all of humanity.”

China's Emergence as Potential Green Finance Leader Amid Global Shifts

China is poised to fill a leadership vacuum in global green finance as traditional powers falter. This shift comes amid US leadership changes, disillusionment with the EU's international climate efforts and increased scrutiny of China's own contributions and transparency. “We will need China's continued leadership,” said UN climate chief Simon Stiell in Baku and urged the Chinese government to lead by example and strengthen its 2035 emissions reduction commitments. However, China's potential leadership also faced challenges, including debates about its developing nation status and calls for reassessment of its contributions under the NCQG. China's delegation argued that the country is not bound by the same “duty” as historic polluters, highlighting its already substantial voluntary south-south contributions. Vice-Premier Ding Xuexiang said that since 2016 China has mobilised approximately $24.5bn “of project funds in support of other developing countries’ climate response”, putting China's contributions on par with historic polluters such as the UK. Recent analysis from Carbon Brief shows China's cumulative per capita emissions are one-third of those in the EU and 14.5% in the US, with a significant remaining carbon budget. Yet as the world's second largest economy, China faces mounting pressure to increase the scale and transparency of its climate finance. Critics highlight two key areas for improvement: the absence of robust tracking systems and ongoing fossil fuel funding. However, as US leadership backtracks on climate, Beijing is already pivoting, with leadership indicating Chinese overseas investments will lean increasingly towards renewable energy and green technology transfers.

UN Working Group Releases Global Transition Plan Guide for Insurers

A guide for transition plans for insurance companies was launched at Cop29 by the UN Forum for Insurance Transition to Net Zero (Fit). The inaugural report highlights insurers’ roles in the transition to a green economy as risk managers, risk carriers and investors. It assesses the key features that insurance companies should consider when developing transition plans. Insurers can influence emissions reduction through their underwriting and the products they offer. Some actions insurers can take include embedding net-zero risk criteria into risk management frameworks, setting underwriting criteria and guidelines for the most emission-intensive activities such as fossil fuels, as well as engaging with clients on their decarbonisation strategies and plans. The report also highlights disclosing scope 1, 2 and 3 emissions, as well as developing insurance products and solutions for low-emission and zero-emission technologies. The Fit plans to develop a second guide for insurers’ underwriting portfolios, and a third and final report on transition plan guidance that will link the underwriting and investment portfolios of insurance companies.

Legal Experts Raise Concerns over Long-awaited Carbon Market Rules

Cop29 marked a significant milestone in global carbon markets, with delegates finalising rules for bilateral trading and a UN-backed crediting mechanism under article 6 of the Paris Agreement. Yalchin Rafiyev, the Cop29 presidency’s lead negotiator, hailed the agreement as unlocking “one of the most complex and technical challenges in climate diplomacy. Its impacts will be clear … it means coal plants decommissioned, wind farms built and forests planted. It means a new wave of investment in the developing world.” However, the swift approval of rules on the conference’s first day raised concerns, with the Center for International Environmental Law (CIEL) describing it as “bulldozing the final obstacles to a UNFCCC-sanctioned carbon market”. CIEL condemned the outcome, stating the rules “lacked any checks on carbon offsets that don’t deliver emissions impacts or violate rights”.

Conflict Affected Countries Set up Climate Finance Coalition

In a significant development, a group of conflict-affected nations, including Somalia, Yemen, Iraq, Chad and Burundi, launched the Network of Climate-vulnerable Countries Affected by Conflict or High Levels of Humanitarian Needs. This initiative addresses the critical gap in climate finance for “fragile” states, which have historically received substantially less international adaptation funding compared to other low-income countries. The Green Climate Fund’s recent $100mn approval for Somalia’s farmers has been hailed by some as a breakthrough, yet climate finance analysts say it is insufficient. The 24 most affected countries require an estimated $35bn annually for climate adaptation, Climate Home News has said. An expert panel in Baku stressed the need for integrated approaches addressing poverty, conflict, and climate simultaneously. The deputy prime minister of Somalia, Salah Jama, called for a shift from reactive humanitarian response to proactive resilience programming.