Luxembourg Announces €320m International Climate Finance Budget at COP29

The 29th United Nations Climate Change Conference (COP29) took place in Azerbaijan in Baku, from 11 to 24 November 2024; a Luxembourg delegation was among those present.

As reported by Luxembourg's Ministry of the Environment, Climate and Biodiversity, after difficult and laborious negotiations, the 195 Parties to the Paris Climate Agreement, including the Luxembourg delegation led by Environment Minister Serge Wilmes, succeeded in adopting an agreement on the new collective quantified goal on climate finance (NCQG). This provides for the provision of €300 billion per year by 2035 to support developing countries in their efforts in terms of mitigation, adaptation and loss and damage. This new target represents a substantial increase compared to the $115.9 billion that developed countries have provided and mobilised in 2022, according to figures compiled by the OECD.

Minister Wilmes stressed that "the agreement on the NCQG at COP29 in Baku marked the beginning of a new era for international climate finance. Developed countries have not only tripled their commitments by 2035, they have also succeeded in inviting other countries such as China and the Gulf Arab States to contribute to these same efforts".

He added: "In Baku, the unified European Union took its leadership role by bringing together many developing countries around a common project to make this agreement possible."

However, COP29 did not manage to conclude on the issue of follow-up to decisions on global emissions reduction and the phase-out of fossil fuels. Without a decision on these points, discussions on efforts to limit global warming to 1.5 degrees will continue next year.

That being said, the ministry argued that the UAE Consensus (COP28) and the Baku NCQG provide a solid basis for the signatory countries of the Paris Agreement to submit new and sufficiently ambitious "national contributions" before COP30, which will be held next year in Brazil.

COP29 also adopted a series of decisions on Article 6 of the Paris Agreement on carbon markets. This authorises, standardises and makes transparent global trading of carbon credits, thus finalising a central aspect of the implementation of the Paris Agreement.

During the national address, Minister Wilmes announced Luxembourg’s new envelope for international climate finance of €320 million for the period 2026-2030, adopted by the Government Council (Cabinet) on 15 November 2024. The ministry said this increase "confirms Luxembourg's international commitment to combating climate change and asserts its leadership at the crucial moment of negotiations on the new quantified collective objective".

In parallel with the negotiation process of the United Nations Framework Convention on Climate Change (UNFCCC), the Luxembourg delegation also met several international partners in the context of bilateral exchanges, provided support to young Luxembourg participants and followed a conference programme at the representative pavilion shared between the Benelux countries and the European Investment Bank (EIB).

For the first time this year, two young Luxembourg climate delegates, Natasha Lepage and Frida Thorsteinsdottir, were part of the Luxembourg delegation. They participated in a specific programme dedicated to young negotiators, advised the members of the delegation on the climate priorities of young people and actively participated in the negotiations.

Luxembourg also took part in two side events in the framework of the "Global Shield", an initiative that aims to strengthen the position of developing countries vulnerable to climate change and improve their financial protection to prevent, minimise and address losses and damages caused by the adverse effects of climate change. Luxembourg has so far contributed €5.5 million to the Global Shield, including €2.5 million within the Global Shield Financing Facility (GSFF).

In addition, the first four projects from the Resilient Landscapes Luxembourg incubator, launched in collaboration with CIFOR-ICRAF, were presented. The incubator aims to mobilise high-impact private capital in nature-based solutions.