From Promises to Action: Fast-Tracking Climate Finance for Global Impact
At COP29, tensions started high and only increased as the high-stakes discussions about climate finance pledges dragged out well past the conference’s expected conclusion. In the end, disappointment reigned: Although wealthy nations pledged support that will ramp up to $300 billion per year by 2035, many lower-income nations were outraged at the inadequate funding for the energy transition and climate adaptation in their countries, estimated to require $1.3 trillion per year.
The $300 billion pledged, though less than desired, nevertheless represents a significant increase over the $100 billion pledged in the original 2009 agreement. Climate advocates hope that next year’s COP30, which will be hosted by Brazil, will generate stronger support for more ambitious commitments. The key takeaways of COP29 show that progress is happening, albeit slowly:
Approval of Article 6.4 of the Paris Agreement provides structure for carbon markets.
At the beginning of the conference, we saw a win: nearly 200 countries agreed on a new framework that will create a UN-led global carbon market. The new system aims to improve transparency, project integrity, and the efficiency of carbon credit trading — the highest-priority items for developers of high-quality nature-based carbon projects. Yet to implement this system, significant work remains.
Recognition is growing of biodiversity’s importance.
For proponents of forest restoration, Terraformation’s representatives at COP29 observed both progress and obstacles. On the positive side, we applaud a growing recognition in the carbon markets of the importance of biodiversity. Biodiverse forests can sequester more carbon than monocultures, and we rely on our planet’s biodiversity for food security, ecosystem stability, the development of new medicines, and much more.
Carbon finance options are expanding.
We also see a notable increase in interest in carbon projects from new, significant stakeholders. Major conservation organizations are increasingly comfortable with financing mechanisms for carbon initiatives — a promising signal for the many forestry teams whose projects are held back by inadequate funding. This shift suggests a positive trend toward large-scale projects and the funding models that support them, opening doors for broader collaboration and impact.
Partnerships with governments can create significant impact.
Publicly owned land can provide opportunities for ecosystem restoration with far-reaching social co-benefits. For projects on private land, governments play a vital role in registering the projects and enabling them to move forward.
Educating all market players is crucial.
Though governments are eager to learn about carbon markets, they are often still unfamiliar with how they operate. This makes it difficult to secure deals and establish projects at the speed the climate crisis demands.
In this “all hands on deck” moment, we can’t allow restoration opportunities to be lost due to a lack of knowledge about carbon finance options. Market participants of all kinds should seek out opportunities to inform stakeholders about how carbon markets operate, clear up misunderstandings — and, importantly, educate about what a high-quality project looks like. When a demand for quality enables more well-designed projects to enter the market, everybody wins.
Crisp, clear guidelines for carbon projects will promote trust.
As concerns persist around compliance and accountability, it is essential that the Supervisory Body of the new Article 6.4 mechanism clarify rules and promote greater integrity in the carbon markets. Clear guidelines build confidence in the markets and support the development of projects that can be reliably vetted.
In the meantime, groups that perform large-scale ecosystem restoration must continue to set the standard by providing nature-positive companies with high-integrity carbon credits. Likewise, those companies should continue to seek out projects that show thorough due diligence and strong co-benefits, including certified social and biodiversity benefits.
By moving forward with integrity, we can co-create the future of the carbon markets.
At Terraformation, we seek out committed corporate partners who can help bridge the funding gap that can prevent even the most promising forest restoration projects from advancing. Our Seed to Carbon Forest Accelerator program is designed to provide high-quality, biodiversity-focused projects with wraparound support to rapidly enter the carbon markets. We seek out projects with strong community benefits to ensure that local communities have an incentive to help the restored forests thrive.
Carbon credits have immense potential to spur measurable climate progress and promote a just transition. We must move quickly to establish clear guidelines for carbon projects and educate stakeholders about the markets that fund those efforts. These steps will also encourage the private finance needed to meet the $1.3 trillion ultimately needed.
To put the pledged $300 billion to work, we need to make the most of the opportunity the carbon markets provide — and ensure no country is left behind as we work toward a healthy climate future.
