Introduction
I arrived in Baku on a cold Monday evening. The iconic Three Flames Towers loomed majestically against the shimmering waters of the Caspian Sea. The city of Baku was bubbling with anticipation, ready to host one of the most significant and the largest global event on climate change – COP29.
From November 11 to 22, my fellow global leaders, activists, and thinkers gathered in Baku Olympic Stadium, Azerbaijan with one shared purpose – to discuss, and find practical solutions to the global climate crisis. Being my first COP, I had a mix feeling of excitement and trepidation. I flickered between eagerness to dive into the brilliant discussions at the pavilions and a lingering fear of disappointing my employer. It was a whirlwind of emotions, but above all, it was an incredible opportunity.
As the discussions unfolded and the announcements began making headlines, one question that lived rent free in my head was what would the outcome of COP mean for businesses, both in Baku and around the world?
What was the focus of COP29?
COP 29 centered on financing global climate action, with a particular focus on supporting the Global South in achieving their climate goals. At its core, the conference highlighted the need for increased financial commitments from developed countries i.e the Global North to help underdeveloped and developing nations implement sustainable practices and combat the harsh effects of climate change.
Climate finance builds on an existing pledge made during COP 15 in Paris, where developed countries, through the Paris Agreement committed to mobilizing USD100 billion annually for climate action in developing countries. However, this amount has long been criticized as insufficient which has made the Global South call for a more ambitious target of USD1.3 trillion per year through 2060 to address the growing challenges of climate change. COP 29 sought to bridge this financial gap, fostering global cooperation to ensure that no country is left behind in the fight against climate change.
What was the outcome of COP29?
There were many positive outcomes of COP29, the first big breakthrough commitment by developed nations to triple their climate finance support for developing countries to $300 billion annually by 2035. This was no small feat, but the target to mobilize $1.3 trillion a year being clamoured for by the Global South hinted at a larger vision that efforts would be made by the public and private sector to step in to bridge the gap.
Building on the financial commitments of the Global North, negotiators also introduced bold initiatives to accelerate the shift toward renewable energy. A collective pledge by member countries was made to scale up renewable energy capacity by an additional 1 terawatt annually through 2035 by harnessing the power of solar, wind, and hydropower technologies. This ambitious target aligns with the global drive to achieve net-zero emissions, and for countries like Nigeria, it presents an immense opportunity. With abundant sunlight, vast land resources, and untapped hydro potential, Nigeria stands to benefit greatly in this initiative, unlocking economic growth and energy access for its population.
COP29 also operationalized a dedicated fund to address the irreversible impacts of climate change on vulnerable nations. With an initial allocation of USD50 billion, this fund emphasizes equitable compensation and long-term recovery efforts for communities most affected by climate-related disasters. This initiative aims to ensure that the countries bearing the effects of climate change receive the support needed to rebuild and thrive.
Parties also made commitment to protecting biodiversity and enhancing natural carbon sinks by pledge of an increased funding for reforestation, sustainable agricultural initiatives, and innovative land restoration projects.
How COP29 impacts businesses?
The outcomes of COP29 present transformative opportunities for businesses in Nigeria and globally. Some of which are explained below:
Investment in renewable energy projects: The global pledge to scale up renewable energy capacity by 1 terawatt annually through 2035 presents Nigerian businesses with unparalleled opportunities in solar, wind, and hydropower technologies. Companies and businesses involved in renewable energy industry, infrastructure development, and distribution can tap into international funding and partnerships to expand their operations. African countries, including Nigeria may receive funding from the African Development Bank (AfDB), Afremixbank, Green Climate Fund for projects of these nature.
Climate adaptation funds: The establishment of a $50 billion fund in COP29 to address irreversible climate impacts also offers Nigerian businesses a chance to secure funding for building resilience. Agricultural businesses and construction companies can develop projects that align with these funds’ goals, such as climate-resilient infrastructure or insurance solutions for farmers which would create opportunities to innovate while helping communities adapt to climate challenges.
Biodiversity and land restoration projects: The commitment to reforestation and sustainable agriculture opens doors for agribusinesses and land management companies in Nigeria. Businesses can benefit from increased funding to adopt or scale up practices like agroforestry, sustainable land restoration, and carbon credit generation. These efforts would not only protect biodiversity but also create revenue streams and strengthen food security.
Implementation of Article 6 – Carbon trading: The operationalization of carbon markets under Article 6 of the Paris Agreement offers Nigerian businesses a chance to participate in global emissions trading systems. Projects like reforestation, renewable energy installations, and methane capture can generate carbon credits, which can then be sold to buyers both locally and globally. This incentivizes businesses to adopt greener practices while gaining access to global markets.
Technology and Innovation in Clean Energy: The expansion of funding for clean energy technology transfers presents a golden opportunity for Nigerian tech innovators and manufacturers. By adopting advanced technologies like smart agriculture technologies, local businesses and farmers can adopt cost-effective solar panels, or energy storage systems to reduce food waste, contributing to energy access and industrial growth.
Scaling up Agricultural Initiatives: Nigerian agribusinesses stand to benefit from increased funding for sustainable agricultural initiatives. This includes adopting climate-smart farming practices, using drought-resistant crops, and developing innovative land restoration techniques. These measures not only reduce emissions but also ensure long-term productivity and profitability.
Challenges
While there are massive benefits for businesses, and with particular reference to Nigeria from the just concluded COP29, the implementation of these opportunities presents some challenges. These challenges are multi-dimensional, impacting various sectors and posing significant barriers to achieving the climate-related goals outlined during COP29.
One of the major challenges is the lack of a standardized policy framework for climate action which discourages businesses and investors from making long-term investments in the clean energy market, as the regulatory landscape remains uncertain. Companies often face delays and incur additional costs navigating complex bureaucratic processes, further deterring investment.
Limited access to financing also poses a major obstacle. While international bodies such as the African Development Bank (AfDB), Afreximbank, and the Green Climate Fund provide financial support for climate initiatives, small and medium-sized enterprises (SMEs) often lack the networks or resources to access these funds. These financial bottleneck prevents many businesses from scaling their operations and contributing meaningfully to the renewable energy sector.
Another significant challenge is the shortage of technical expertise and skilled labour within Nigeria’s renewable energy market. These skills gap not only delays project implementation but also increases costs, as reliance on foreign expertise becomes necessary.
Economic instability as a result of the exchange rate and inflation create financial uncertainty, particularly for businesses reliant on foreign investments and partnerships. This unpredictability discourages long-term planning and increases operational costs. Additionally, and most significantly, Nigeria’s heavy reliance on fossil fuel presents a structural and huge barrier to transitioning towards cleaner energy sources. This dependence on fossil fuel fosters resistance within the business environment and policy circles, leaving companies tied to fossil fuel value chains vulnerable as global demand shifts toward low-carbon alternatives.
Conclusion
In conclusion, COP29 was a very rich and interesting experience for me, filled with opportunities to innovate, collaborate, and lead in shaping a sustainable future, both for the private sector, public sector and the government. I also realised that each business, each individual, and each community have a role to play in ensuring we attain the journey to a sustainable Nigeria. In solidarity for a Green World.
