By Valerie Volcovici

(Reuters) – This month's U.N. climate summit – COP29 in Baku, Azerbaijan – has been dubbed the "climate finance COP" for its central goal: to agree on how much money should go each year to helping developing countries cope with climate-related costs.

That discussion could be tough following Tuesday's re-election of former U.S. President Donald Trump, a climate denier whose campaign vowed to remove the top historic greenhouse gas emitter and leading oil and gas producer from the landmark 2015 Paris Agreement to fight climate change for a second time.

COP29 delegates will also be looking to advance other deals made at previous summits.

Agenda Items for COP29 (Nov. 11-22)

Climate Finance

The acronym dominating this year's summit is NCQG – which stands for the New Collective Quantified Goal. This refers to the new annual climate financing target, meant to replace the current $100 billion pledge that expires at the end of this year.

Wealthy nations have occasionally met that annual goal since 2020, leading to growing mistrust among climate-vulnerable nations. As COP29 aims to set a higher target, wealthy nations argue that the funding cannot come solely from their budgets. Instead, they're discussing complex reforms to global multilateral lending that would encourage private capital while managing climate-linked financial risks.

However, it remains unclear how much of the total annual target will be contributed by rich nations and whether rapidly developing nations like China and the Gulf states should also participate, a stance backed by the U.S. and EU. Officials in Azerbaijan estimate that a consensus may yield a funding figure in the "hundreds of billions" rather than the trillions needed.

Fossil Fuel Transition

Last year's COP28 in Dubai marked the first agreement among countries to transition away from fossil fuels. However, since then, global fossil fuel use and exports have increased, and new areas for oil and gas production have been approved in countries like Azerbaijan, the U.S., Namibia, and Guyana. Negotiators at COP29 indicate there may be no strong commitments or timelines regarding fossil fuel reductions, although some countries may push for a halt on new coal plant projects. Progress on tripling renewable energy and doubling energy efficiency will also be on the agenda.

Rules for Carbon Market

Governments aim to establish rules for trading carbon credits linked to the preservation of forests and natural carbon sinks. Business leaders expect transparency and environmental integrity measures regarding the Paris Agreement Crediting Mechanism (PACM). Key issues under debate include supervisory standards, credit evaluation before trading, and possible revocation of credits.

Boosting Transparency

Azerbaijan hopes countries will produce their first Biennial Transparency Reports (BTRs) during the summit, outlining progress on climate goals and financial needs for transitioning away from fossil fuels. The U.N. has indicated current national pledges are insufficient.

Adaptation in Focus

Countries last year began developing guidelines for adaptation plans to combat climate disruptions like rising sea levels and extreme temperatures. However, these guidelines still lack quantifiable targets and strategies for linking projects with climate finance. More specific adaptation goals are expected to be set during COP29.

Money for Loss and Damage

Since COP27, the Fund For Responding To Loss and Damage, aimed at assisting vulnerable countries with climate disaster costs, has mobilized approximately $660 million. Climate-vulnerable countries are urging wealthier nations to contribute more to this fund.