COP29: No progress on financing to address climate change as Baku summit enters second week

Developing nations need at least $1 trillion annually by the end of the decade to cope with the climate emergency, a panel of economists have said

Negotiators of nearly 200 countries gathered in Azerbaijan’s Baku struggled to advance a deal to make funds available to mitigate the impact of the climate crisis as the UN summit entered its second and final week, although a separate G20 nations’ summit in Rio di Janeiro reached a fragile consensus on climate finance.

“Failure is not an option,” United Nations Secretary Antonio Guterres told G20 leaders. “We must also fight the coordinated disinformation campaigns impeding global progress on climate change, ranging from outright denial to greenwashing to harassment of climate scientists.”

Although not much progress was made on the issue of how much money wealthy nations should pay to emerging economies to move away from fossil fuels, cope with rising temperatures and pay for damage already caused by extreme weather events, more is expected when ministers from several countries fly in for week two to tackle dealmaking at the 29th Conference of Parties (COP29) being held in Baku under the aegis of the UN Framework Convention on Climate Change (UNFCCC).

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“Next week’s (G20) summit must send crystal clear global signals,” Simon Stiell, executive secretary of the UNFCCC, said in a letter to G20 leaders meeting in Rio on Monday and Tuesday, even as diplomates in Baku struggled for a deal intended to scale up funding to address the worsening impacts of climate change.

New finance target

The success of the Baku summit hinges on whether countries can agree on a new finance target for richer countries, development lenders and the private sector to deliver each year. Developing nations need at least $1 trillion annually by the end of the decade to cope with the climate emergency, a panel of economists have said.

Delays in achieving the climate finance goals will exacerbate the situation, leading to costs spiking much more in the future, according to the report by the Independent High-Level Expert Group on Climate Finance backed by the UNFCCC. The figure for climate finance put forth by G77, which includes several developing countries, including India, has called for a $1.3 trillion climate finance target.

“As we reach the midpoint of COP29, it is deeply disturbing to witness climate finance negotiations come to a standstill,” said Harjeet Singh, global engagement director for the Fossil Fuel Non-Proliferation Treaty Initiative. “It’s time for developed countries to step up, fulfil their obligations and make a genuine commitment to meeting the climate action needs of developing countries.”

The lack of progress in Baku has turned world attention to the G20 Rio meeting, as these nations account for 85 per cent of the world’s economy and 80 per cent of heat-trapping emissions. Rich European countries have been saying that an ambitious goal can only be agreed upon if they expand the base of contributors to include some of the richer developing nations, such as China and Middle Eastern oil producers.

Fragile consensus in Rio

On Saturday, talks of a G20 joint statement in Rio snagged on the same issue, Reuters reported, with European nations pushing for more nations to contribute and developing countries such as Brazil pushing back. But early Sunday morning, negotiators agreed to a text mentioning developing nations’ voluntary contributions to climate finance, stopping short of calling them obligations.

“The G20 summit is at a critical point,” Singh said. “They have a chance to unlock the gridlock impeding COP29 and set a bold and ambitious climate finance target that delivers real climate justice.”

Although expectations are currently low in Baku, at stake are a new climate finance deal for developing countries, a new wave of 2035 climate targets ahead of a February 2025 deadline, and a signal that tackling climate change is still possible despite the return of Donald Trump, a climate sceptic, to the White House. The success of not only COP29 but also the next UN climate summit to be hosted in Brazil next year depends on an ambitious deal on climate finance.

“We call on governments, led by the G20, to meet the moment and deliver the policies for an accelerated shift from fossil fuels to a clean energy future, to unlock the essential private sector investment needed,” a coalition of business groups said in a letter. The groups included the We Mean Business Coalition and the United Nations Global Compact.

Some experts at COP29 have declined to give up hope. “As we move into the final week of negotiations, we’ll need strong political will to build trust, bridge divisions between parties, and take us to the finish line,” said Ani Dasgupta, president and CEO of World Resources Institute, a US-based think tank. “I’m optimistic that countries will coalesce around an ambitious overarching finance package here in Baku.”