COP 29 Must Deliver on Last Year’s Historic Energy Transition Pact. Here’s how

Countries agreed last year at COP 28 in Dubai to triple renewable energy capacity and double the rate of energy efficiency improvements by 2030 and transition away from fossil fuels in energy systems.

All parts of this equation are necessary to keep global temperature rise below 1.5°C. As fossil fuel burning causes 86% of global carbon dioxide emissions, phasing out both the supply of and demand for those fuels is necessary to solve the climate crisis.

At COP 29 in Baku, countries must build on what was achieved at COP 28 and clarify what tripling renewables and transitioning away from fossil fuels means in practice. This can be done through a “cover decision,” which, like the Glasgow Climate Pact, gives a broad overview of key issues for countries to prioritize.

Countries should also deliver on COP 28 decisions through their next round (“third generation”) of national climate plans. These nationally determined contributions (NDCs) to the Paris Agreement are due for submission by February 10, 2025, with targets out to 2035. While the cover decision will guide the next round of NDCs, it shouldn’t serve to limit the ambition or scope of these commitments.

Finally, countries need to agree on an ambitious new climate finance package, known as the new collective quantified goal (NCQG). A step-change in finance flows is needed to unlock more ambitious NDCs and the broader energy transition.

How to Triple Renewables

To operationalize the tripling of renewables, an ambitious cover decision text should include commitments for countries to increase financial and other public policy support to accelerate renewable energy adoption.

While the cost of many clean energy technologies is falling dramatically, there are still considerable barriers in a world dominated by fossil fuels.

Public funds are especially needed to boost the deployment of renewables in the countries that need it most. Developing countries are facing high and growing external debt costs, with 54 governments spending more than 10% of revenues on interest payments. High borrowing costs are holding back the renewables rollout in low-income countries, with Africa attracting just 2% of global clean energy finance. Debt relief and grant-based or highly concessional finance are needed to extend the benefits of clean energy to all.

Advanced economies and international finance institutions should increase concessional lending, grants, and risk-mitigation instruments to compensate for high upfront investment needs and cost of capital in developing countries. Further funding is required to upgrade grids and increase energy storage to facilitate the integration of variable renewables. These are the types of needs that must inform the NCQG.

Countries can also operationalize the tripling pledge through their third-generation NDCs. On renewables, only 14 of the 194 NDCs previously submitted include explicit targets for renewable power capacity for 2030. Now, they should ensure national targets are aligned with the overall global goal of tripling renewables capacity by 2030.

How to Transition Away From Fossil Fuels

One important step in the transition away from fossil fuels may sound somewhat obvious: stop expanding fossil fuel production. The science tells us that, in a world where we meet the Paris Agreement’s 1.5°C goal, there is no room for new coal mines or oil and gas fields.

Yet many countries and companies are expanding their fossil fuel production, leading to a “production gap”: more than twice as much fossil fuel production is expected in 2030 as is consistent with 1.5°C. This is terrible news for the climate.

They are also sending money in the wrong direction. The G20 spent three times as much on fossil fuel subsidies (around USD 535 billion) as support to renewable power (USD 168 billion) in 2023—and this does not include the annual average of around USD 300 billion invested each year by G20 state-owned enterprises in fossil fuels production.

What’s the solution? To start, the problem of expansion is something that can be addressed at COP 29, particularly in a cover decision—here, countries should agree to stop issuing new exploration licences and negotiate an equitable and orderly phase-out.

They should also reaffirm the decision to phase out fossil fuel subsidies and remove the loophole language “inefficient,” instead assigning each country the task of creating a national roadmap for phasing out fossil fuel subsidies, requiring them to justify any remaining subsidies and identify alternative policy levers to achieve the same objectives.

NDCs, similarly, should contain commitments to stop issuing new fossil fuel exploration licences—or, if a country does not currently explore for fossil fuels, a commitment to not issue any such licences in future. On fossil fuel subsidies, NDCs should contain commitments to put in place timebound national roadmaps like those mentioned above on fossil fuel subsidy reform.

Governments took an essential step at COP 28 to translate climate goals into implications for energy systems, but they are still sending conflicting signals. At COP 29, governments have the chance to find alignment and put their weight all in behind the energy transition.