Last month, I joined the throng of climate foot soldiers at COP29 in Baku, Azerbaijan. This was my fourth time at COP and while it can be easy to become discouraged – the needs are so diverse, the demands so vast, and the challenges so complex – as I reflect on this year’s conference, there is some cause for optimism.

COP29 is the second step in the “troika” that began last year in Dubai, with the landmark agreement by 133 nations to triple renewable capacity and double energy efficiency by 2030.

While it was a milestone in global efforts to address climate change, that agreement was missing a key part of the picture – how to pay for those reductions.

This year’s COP - dubbed by many the “finance” COP - began to address those questions.

The key outcome of this year’s conference was an agreement by developed countries to increase the Climate Finance fund to $300 billion annually by 2035 and the establishment of a global carbon market for international transfer of mitigation outcomes.

Importantly, the agreement also encourages other nations to make voluntary contributions because the list of developed nations, established in 1992, didn’t include nations like China, Saudi Arabia or UAE, which have today become economic powerhouses.

Although an improvement over the initial $100 billion committed at COP15, developing countries targeted at least $1.3 trillion in annual climate finance. The Energy Transitions Commission estimates than “an average of $3.5 trillion capital investment per year will be required between now and 2050 in low-carbon energy, building, transport and industry technologies.”

As reported by the Energy Transitions Commission

That agreement is particularly significant as the world looks ahead to third part of the COP troika – COP30 in Belem, Brazil.

In advance of COP30, each country will focus on updating its Nationally Determined Contributions (NDC)– essentially each country’s plan to reduce greenhouse gas emissions across its economic sectors – and on enabling large-scale clean energy projects. These financial commitments will be critical to ensuring those projects become reality.

In addition to new financial agreements, nations also adopted the Global Energy Storage and Grids Pledge, an agreement to deploy a target of 1,500 GW of energy storage, double grid investment, and to develop 25 million kilometers of grid infrastructure by 2030.

This year’s agreements also served as a powerful reminder of the role digitalization and technology have – and will continue – to play in remaking economic and energy systems for the future.

Liquidity and Sustainability Facility founder and chair Vera Songwe captured the depth and complexity of this transition. “We must fund brown, blue and green projects . . . because it is a transition, we must move from brown to blue to green,” she said, speaking at Bloomberg Green. “And we need to make all as efficient as possible.” Songwe was co-author of the Third Report of the Independent High-Level Expert Group on Climate Finance that called for an overall increase in climate investment to $6.5 trillion per year by 2030.

It is undeniable today that digitalization will play a critical role in enabling the efficiency gains that will be needed to meet decarbonization goals. From advanced modeling and simulation of current and future technologies to advanced control of manufacturing processes AspenTech solutions are already being applied to sustainability projects ranging from energy efficiency and emissions management to renewable energy and carbon capture.

As expected, AI was another leading topic of discussion at COP, with many sessions devoted to how this capability is crucial to help manage the complexity of the energy transition. I led panel “Accelerate Sustainability Progress with AI” at the America-Is-All-In Action Center with sustainability leaders from Emerson, Google and Microsoft.

With growing investments to combat climate change, Emerson CSO Mike Train said it’s clear “automation (will have) a first-row seat” when it comes to key technologies like energy storage, digital grid management, and hydrogen. Google and Microsoft leaders offered several successful AI implementations of emissions reduction as well as climate adaptation and resilience.

Going forward, the expectation is that funding can be used to scale both existing and new solutions, like carbon capture, green hydrogen production, and biofuels.

While AspenTech for years has included Industrial AI capabilities in our products, the technology in recent years has become popular as a key tool, helping companies analyze emissions to identify areas for improvement, integrate renewable resources into the grid and automate workflows to increase efficiency and deliver more consistent results.

If you work in climate, “you spend your life switching between optimism and pessimism,” Adair Turner, Chairman of the Energy Transitions Commission (ETC) said recently.

As true as the statement may be, I believe there are many reasons to look back on COP29 with hope.

The reality is that while forging international agreements is a complicated process, it is happening. The global community of developed nations committed itself to spending billions on combatting climate change, and other nations are likely to join in the effort as well.

Significant challenges still lie ahead, and there may yet be more moments when we feel pessimistic, but world is moving not simply to recognize the challenge before us, is taking critically important steps to solve it and AspenTech will be a key part of the picture as we do.