COP29: India’s leadership, carbon market challenges, and global stances

The 29th Conference of the Parties (COP29) in Baku, Azerbaijan, underscored both the promise and the perils of international climate diplomacy. Held at a time when the effects of the climate crisis are becoming increasingly severe, COP29 sought to advance the goals of the Paris Agreement, focusing on mechanisms such as carbon trading and scaling up financial support for developing nations. India played a pivotal role in advocating for equitable climate solutions, demonstrating leadership through its domestic policies and international stance. However, the conference was also marked by contentious debates over carbon trading, exposing critical flaws in the system, and by stark divisions among participating countries regarding their commitments and priorities.
India’s presence at COP29 was characterised by assertive leadership and a call for justice in climate action. As a major developing country grappling with the dual challenges of economic growth and environmental sustainability, India’s interventions highlighted the need for equitable climate finance and the fulfilment of long-standing commitments by developed nations. India reiterated its position that public climate finance from developed countries should cover the costs imposed on developing nations by deviations from the least-cost development pathways. This approach recognises the historical responsibilities of industrialised nations, which have contributed disproportionately to global emissions, and calls for an equitable redistribution of resources to support vulnerable economies. India’s efforts are also aligned with its updated Nationally Determined Contributions (NDCs), which emphasise renewable energy expansion, large-scale afforestation, and a gradual shift away from fossil fuels.
On the global stage, India has emerged as a champion of South-South cooperation in climate action. Initiatives such as the International Solar Alliance (ISA) and the Coalition for Disaster Resilient Infrastructure (CDRI) illustrate India’s commitment to fostering partnerships among developing countries to tackle climate challenges collectively. At COP29, India advocated for stronger international collaboration while criticising unilateral measures such as carbon border adjustment mechanisms, which risk transferring financial burdens onto developing economies. By framing climate action as a shared responsibility rooted in mutual trust and equity, India positioned itself as a leading voice for the Global South.
However, the progress made at COP29 in operationalising carbon markets under Article 6 of the Paris Agreement exposed significant flaws in the system. The adoption of rules governing carbon trading was hailed as a milestone, but concerns about the potential misuse of these mechanisms were widespread. Carbon trading, in principle, allows countries to achieve their emissions reduction targets more cost-effectively by buying credits from nations or projects that exceed their own targets. While this system promises to channel investment into developing countries and foster global cooperation, its implementation has been fraught with challenges.
One of the most significant criticisms of carbon trading is the risk of greenwashing. Wealthier nations could exploit these mechanisms to offset their emissions without making substantial reductions domestically, undermining the overall goal of the Paris Agreement. For instance, projects generating carbon credits may exaggerate their environmental benefits or fail to deliver meaningful emissions reductions. The decentralised nature of Article 6.2, which allows countries to set their own standards for bilateral trading, further exacerbates these risks.
The centralised mechanism under Article 6.4, designed to ensure greater oversight and uniform standards, has also faced criticism. The decision by the Supervisory Body to bypass traditional approval processes and adopt standards unilaterally sparked controversy at COP29. While this move aimed to expedite the implementation of carbon markets, it was seen by many as undermining the principle of consensus that underpins international climate negotiations. Developing countries, in particular, expressed concerns about being sidelined in decision-making processes, highlighting the need for more inclusive governance structures.
The stances of participating countries at COP29 revealed deep divides in their approaches to climate action. Developed nations, led by the European Union and the United States, pushed for the rapid adoption of carbon trading rules, viewing these mechanisms as essential to meeting their ambitious emissions reduction targets. However, their financial commitments to supporting developing countries fell short of expectations, drawing criticism from nations in the Global South. The $300 billion annual climate finance goal, while significant, was deemed insufficient by countries like India and Nigeria, which argued that the actual needs of developing nations exceed $1.3 trillion annually.
Developing countries, on the other hand, sought to leverage the carbon market framework to attract investment and drive sustainable development. Nations in Asia and Africa supported the operationalisation of Article 6, hoping to benefit from capacity-building initiatives and new financial flows. Yet, their participation was tempered by concerns about the integrity and equity of the system. The disparities between buyer and seller countries in the carbon market were particularly pronounced, with wealthier nations like Switzerland and Singapore dominating transactions while developing countries struggled to secure a fair share of benefits.
Host nation Azerbaijan faced scrutiny for its reliance on fossil fuels, which underscored the persistent influence of the oil and gas industry on global climate policies. Meanwhile, the absence of major delegations, such as Argentina’s withdrawal, reflected the broader geopolitical challenges that continue to shape international climate negotiations. France’s internal political tensions also disrupted its delegation’s participation, further highlighting the fragile state of global unity on climate issues.
Despite these challenges, COP29 achieved some notable milestones. The finalisation of the Article 6 rulebook marked a step forward in operationalising carbon markets, with safeguards for environmental and human rights included in the centralised mechanism. Transparency in climate reporting also saw improvements, with several countries submitting their first Biennial Transparency Reports under the Enhanced Transparency Framework. These developments provide a foundation for more accountable and effective climate action, though their success will depend on robust implementation and continued international cooperation.
The outcomes of COP29 underscore the urgent need for a more equitable and inclusive approach to global climate governance. India’s leadership highlighted the importance of addressing historical inequities and fostering mutual trust, while the debates over carbon trading revealed the complexities of balancing economic development with environmental sustainability. As the world prepares for COP30, the international community must build on the progress made in Baku while addressing the systemic flaws that threaten to undermine collective climate ambitions. Only through genuine collaboration and a commitment to justice can we hope to meet the challenges of the climate crisis and secure a sustainable future for all.
This article is authored by Aparajitha Nair.