The upcoming 31st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP31) represents a watershed moment in international climate policy, in which the global community moves from the phase of from formulating political declarations to the inexorable reality of implementing the Paris Agreement. The accelerating impacts of the climate crisis and the transformation of the global economy challenge negotiators to translate agreed ambitions into real, measurable and financeable action at national levels. With the time frame to avert the worst-case warming scenarios shrinking, the success of the international architecture will be measured by its ability to translate multilateral commitments into workable domestic policies and investment flows.

The COP31 conference will take place in Antalya, Turkey, from 9 to 20 November 2026, based on a special partnership model: Turkey acts as the host country organizing the summit, while Australia takes on the role of the country presiding over the negotiations themselves (President of Negotiations). The central tension of the summit is the widening gap between politically agreed targets – notably keeping global temperature increase below 1.5°C – and the real implementation of these commitments through Nationally Determined Contributions (NDCs) and investment strategic frameworks. The aim of this analysis is to assess the key negotiating agendas, unresolved disputes and strategic cross-sections of the conference, based on a specialist study prepared for the European Parliament’s Committee on the Environment, Climate Change and Food Safety (ENVI).

These negotiating agendas and political tensions are fully reflected in the most pressing issue of the entire process – climate finance.

Climate Finance: Controversies over NCQG and the Baku-to-Belém Roadmap

Climate finance is a fundamental building block and an undeniable prerequisite for achieving any global mitigation and adaptation goals. Persistent disagreements over the volume, structure and availability of financial resources directly threaten the trust between developed and developing countries, without which any broader agreement within the mechanisms of the United Nations Framework Convention on Climate Change (UNFCCC) is paralyzed.

The New Collective Quantified Target (NCQG), adopted at COP29 in Baku, sets a baseline commitment to provide developing countries with at least USD 300 billion per year in climate action support by 2035. This target is designed around mobilizing resources from a „broad spectrum of sources“ and calls on all actors to scale up total financing to at least USD 1.3 trillion per year. However, this agreed framework falls significantly short of actual quantified needs. The Standing Committee on Finance (SCF) of the UNFCCC, in its Second Needs Assessment Report (2025), reports that the national needs quantified by 98 developing countries in their NDCs are cumulatively between USD 5.0 and 6.9 trillion by 2030 (representing approximately USD 455 and 584 billion per year for the reporting group of countries). The Independent High-Level Expert Group on Climate Finance (IHLEG) estimates total investment needs for climate and development in emerging and developing economies (excluding China) at up to USD 3.2 trillion per year by 2035, of which USD 1.3 trillion should come from external public and private sources.

In terms of the quality of finance delivered, the latest data from the Organisation for Economic Co-operation and Development (OECD) for 2024 show that the amount provided and mobilized reached USD 136.7 billion, exceeding the original target of USD 100 billion per year for the third consecutive year. However, a more detailed structural analysis reveals deep qualitative shortcomings: the structure of public finances remains dominated by loans (67 % in 2024; 73 % in 2023), which increases the debt burden of recipient countries. At the same time, the share of finance allocated to adaptation has declined from a peak of USD 34 % in 2020 to around USD 25 % in 2023 and 2024 (USD 34.7 billion in 2024), although it has increased slightly in absolute terms.

At the heart of the ongoing political conflict is the structural dispute between Article 9.1 of the Paris Agreement, which sets out a legal obligation for developed countries to provide public financial resources, and Article 9.3, which talks about mobilization private capital flows from a wide range of sources and actors. This contradiction was also fully reflected in the two-year Climate Finance Work Programme (CFWP). Negotiations at the SB64 intersession in Bonn ended without agreement on the scope of this programme (whether to deal exclusively with Article 9.1 or Article 9 as a whole), although the programme received a confirmed item on the agenda of the upcoming CMA8 meeting.

A roadmap was presented to bridge these gaps Baku-to-Belém Roadmap („5 Rs“), which aims to consolidate existing financial mechanisms and support the mobilization target of USD 1.3 trillion. However, critics from developing countries point out that this framework does not create any new legal obligations or enforceable responsibilities for developed countries. In parallel, the transformation of the Adaptation Fund (AF) to serve exclusively the Paris Agreement remains unresolved, as negotiations at SB64 have stalled on issues of governance and linkage to revenue sharing (share of proceeds) market mechanism pursuant to Article 6.4.

Resolving financial mechanisms and guarantees is an indispensable prerequisite for a parallel shift in the transformation of the energy sector and the shift away from fossil fuels.

Transitioning from Fossil Fuels: From UAE Consensus to New Initiatives

Decarbonizing the energy sector is at the very core of global efforts to avert the worst impacts of the climate crisis. However, in practice, there remains a deep disconnect between international declarations adopted at COP summits and the actual expansion of fossil fuel production and extraction at national levels.

Historical consensus from the United Arab Emirates (UAE Consensus from COP28) was the first official COP decision to directly name the need to transition away from fossil fuels (transitioning away from fossil fuels) in energy systems. However, reports from research institutions show that the output gap (production gap) – the difference between planned fossil fuel extraction and the level compatible with the 1.5°C limit – has risen to 120 %. A coalition of more than 80 countries, including the European Union, pushed for the inclusion of a binding roadmap for the transition away from fossil fuels directly in the text of the decision at COP30, but this failed to materialize.

The Santa Marta/TAFF process was created in response to this failure (Transitioning Away from Fossil Fuels), initiated by the Brazilian Presidency outside the formal negotiating text of the UNFCCC. The substantive output of this process, Santa Marta Vision, however, is explicitly non-binding and does not include any common deadline for the end of fossil fuel production or consumption. It is noteworthy that approximately 80 % sectors and actors involved in the Santa Marta process have called for the creation of a dedicated international mechanism in their contributions.

In the area of just transition, the Just Transition Mechanism (JTM) at COP30 only moved to the „development“ phase (develop), thus postponing its real operationalization to COP31. Instead of binding production restrictions, the COP31 presidency is shifting the focus of the energy agenda towards a voluntary initiative „"35-by-35 Global Electrification Pledge"“. From a geopolitical and strategic perspective, this initiative is often used by fossil fuel producing countries as a supply-side distraction – by shifting the emphasis to electrification, they avoid adopting binding production caps and extraction restrictions.

The ability or inability to implement a rapid and controlled shift away from fossil energy sources directly determines the extent of irreparable damage that the world's most vulnerable regions face.

Loss and Damage: Demand vs. Resource Availability

The full operationalization of the Loss and Damage Response Fund (LDRF) is a litmus test of fairness in international climate policy. For the most vulnerable developing countries, the LDRF represents a key tool to address the inevitable impacts of climate change that exceed the adaptive capacities of societies.

The first round of the FRLD call for proposals revealed a massive quantitative mismatch between demand and the resources actually available. The Fund received 176 eligible applications for funding totaling $2.8 billion, more than 11 times the initial allocation of $250 million. The situation is made worse by the fact that, out of the total $826.41 million pledged, only approximately $55.3 billion ($455.96 million) had actually been committed as of May 31, 2026. This liquidity shortfall forced the Fund Board to postpone the approval of the first project applications.

The operationalization of the FRLD is accompanied by fundamental institutional and procedural barriers:

• Predominance of intermediary entities: Although direct access for national governments has been formally launched, up to 72% of funding applications still flow through internationally accredited entities (such as UN agencies or development banks), which lengthens approval processes and increases the administrative burden.
• Strict allocation rules: The rule is to allocate at least 50 % of available resources to Small Island Developing States (SIDS) and Least Developed Countries (LDCs), which limits the amount of resources for other vulnerable developing economies affected by extreme events.
• Technical assistance capacity limits: Santiago Network (Santiago Network), designed to provide technical assistance, has grown its base to 427 members and is managing 17 requests for technical assistance in the implementation phase, but its advisory body reports serious capacity constraints and slow resource mobilization.
• Insufficient institutional coordination: Some progress has been made in linking the Warsaw International Mechanism (WIM) and the Santiago Network; the WIM Executive Committee approved voluntary guidelines for loss and damage data in September 2026, and an agreement was reached on a single regular report on loss and damage.

Sustainable financing of the response to climate damage is closely related to the search for innovative market mechanisms regulated by Article 6 of the Paris Agreement.

Carbon markets under Article 6: Operationalisation and integrity

International carbon markets based on Article 6 of the Paris Agreement are an important tool for cost-effectively reducing emissions and mobilizing private capital. However, their success depends on strict environmental integrity, clarity of rules and avoidance of double counting of emission reductions.

Article 6.2, which regulates bilateral and multilateral cooperative approaches, has seen practical implementation. The first formal transfers of internationally transferable emission reductions (ITMOs) have been made, with Palau and Mongolia among the pioneers. However, a permanent mechanism to finance the common technical infrastructure of this article is still lacking, with a decision on its establishment postponed to CMA8.

In the case of Article 6.4, known as the Paris Agreement Crediting Mechanism (PACM), the first ever carbon credits generated based on conservative baselines were issued in February 2026. However, the transition of projects from the old Clean Development Mechanism (CDM) to the new architecture has been slow: while 418 CDM activities had been approved for transition by September 2026, the PACM Supervisory Board has so far approved only three new methodologies.

The integrity of the entire system remains subject to expert criticism. Independent assessments by non-governmental organizations (e.g. Carbon Market Watch) describe the current set of rules for Article 6.2 as insufficient in terms of integrity and warn of the risk of promoting poor quality credits.

This development is creating deep political and legislative tensions within the European Union. The EU’s proposed 2040 climate target allows for up to 5 % of the total effort to be covered through international Article 6 credits. The introduction of these credits runs into a fundamental contradiction: the EU Emissions Trading System (EU ETS) currently strictly prohibits the use of international offset credits in order to maintain price signals supporting domestic investment in decarbonisation. Accepting credits under Article 6.4 would create an internal regulatory conflict between the EU ETS rules, the equivalence of carbon prices under the Carbon Border Adjustment Mechanism (CBAM) and the flexibility of international markets under the UNFCCC, which carries the risk of „outsourcing“ domestic emission reductions.

The functioning of market mechanisms forms only part of a broader climate governance architecture that requires overall alignment of national goals with the global trajectory.

Climate Governance and Strategic Challenges for the EU

Effective global climate governance (Governance) is based on a cyclical assessment of the implementation of national commitments and their continuous increase in order to close the gap between declared promises and scientific recommendations.

Findings from the UN NDC Synthesis Report 2025 and UNEP reports reveal an alarming ambition gap (Ambition Gap). The projected reduction in global emissions based on submitted national plans amounts to only about 12 % by 2035 compared to 2019 levels. However, to keep warming below 1.5°C, an emission reduction of 55 % is needed. Current NDC commitments are thus leading the world towards dangerous warming in the range of 2.3°C to 2.5°C.

The climate governance architecture also faces serious procedural blockages. At SB64 in Bonn, negotiations on both the Global Adaptation Goal (GGA) and the Mitigation Work Programme (MWP) collapsed procedurally. Due to the inability to reach consensus, procedural rule 16 of the rules of procedure (Rule 16).

Consequence of the procedural blockade on SB64 in Bonn:

• Rule 16 application: Abortion of negotiations without approval of conclusions for GGA and MWP.
• Absence of a negotiating text: The agenda arrives at COP31 in Antalya without an official consensus proposal.
• Tactical impact on the EU: The EU negotiating team is forced to draft texts directly during plenary sessions, dramatically increasing the risk of adopting weakened compromise formulations.

This situation poses a complex strategic challenge for the European Union. The EU is pursuing an ambitious target of a net emission reduction of 90 % by 2040 (of which at least 85 % must be achieved through domestic reductions and a maximum of 5 % through international credits). However, maintaining the EU's credibility as a global leader in promoting the 1.5°C objective vis-à-vis its partners is complicated by political risks and domestic pressures linked to the review clause (review clause), which leaves long-term ambitions politically conditioned.

In addition to the formal negotiations, attention will also be focused on the COP31 Presidency's accompanying initiatives, including the voluntary initiative „"Antalya Pledge on AI"“, responding to the rapidly increasing energy and water consumption in artificial intelligence data centers.

Ultimately, the success of COP31 in Antalya will not be measured by the number of newly adopted declarations, but by the real ability of the contracting parties to narrow the gap between the agreed goals and their actual financing and implementation on the ground. JRi&CO2AI