What was expected to be a UN climate summit centred on finance turned out to be controversial and weak, with promises by wealthy nations of just $300 billion in climate funding to be reached by 2035. Although there was a fractious agreement, India raised its voice for the Global South by calling it an “optical illusion.”
“We are disappointed in the outcome, which clearly brings out the unwillingness of the developed country parties to fulfil their responsibilities,” India’s representative Chandni Raina said at the closing plenary. “I regret to say that this document is nothing more than an optical illusion. This, in our opinion, will not address the enormity of the challenge we all face.”
After two weeks of intense negotiations that ran into overtime, it was decided at the 29th Conference of Parties (COP29) held in Azerbaijan’s Baku that rich countries will provide funding of $300 billion to be reached in 10 years in grants and concessional loans. A broader goal of $1.3 trillion annually in climate finance flows, including private investment, innovative financing and market-rate loans was also mentioned in the final document.
The commitment by the developed world for poorer nations to address the climate crisis was criticised by many countries and activists. There was high drama over deciding on the final text on the New Collective Quantified Goal (NCQG) when the alliance of small island states and least developed countries walked out but later rejoined the talks.
“It has been a difficult journey, but we’ve delivered a deal,” said Simon Stiell, executive secretary of the UN Framework Convention on Climate Change. This agreement provides a base on which to build, UN secretary Antonio Guterres said. “Commitments must quickly become cash,” Guterres said.
Although the commitment was a tripling of the current $100 billion, it fell far short of the demand by the G-77 nations of $1.3 trillion ion annual funding for developing economies cope with the climate emergency. Impoverished and developing nations protested but agreed to the agreement to avoid a breakdown in global negotiations.
Climate experts and activists were scathing of the outcome. “The climate summit in Baku was not a success, but at best the avoidance of a diplomatic disaster,” said Ottmar Edenhofer, climate economist and co-director of the Potsdam Institute for Climate Impact Research, a German think tank.
“The deal fails to provide the critical support required for developing countries to transition swiftly from fossil fuels to clean, renewable energy systems, or to prepare for the devastating impacts of the climate crisis,” said Harjeet Singh, global engagement director for the Fossil Fuel Non-Proliferation Treaty Initiative. “We must persist in our fight, demanding a significant increase in financing and holding developed countries to account for delivering real, impactful actions.”
The finance deal acknowledges the need for $ 1.3 trillion and then talks of reaching $300 billion by 2035 from $100 billion earlier commitment, kicking the can down the road, according to Dhruba Purkayastha, director at the Council on Energy, Environment and Water, a New Delhi-based think tank.
“The outcome has good intentions and affirmative verbs which are noncommittal,” Purkayastha said. “There is also no description of what constitutes NCQG, nor is there any mention of how and from where the finance will come.”
Deal on global carbon trading market
To be sure, the Baku meeting in an early development about two weeks ago agreed on a key set of rules for credits and offsets that is expected to lead to a UN-backed carbon marketplace and direct nation-to-nation carbon trading under Article 6 of the 2015 Paris climate agreement.
In principle, this could funnel vital investment into developing nations, where carbon credits can be generated through work like reforestation, carbon sinks and clean energy transition. To be sure, there are concerns these systems could be abused for greenwashing and allow top producers delay their timelines for reducing emissions.
An earlier initiative called the Clean Development Mechanism under the Kyoto Protocol was less than a success, with the bottom falling out of the market due to doubts on effectiveness and integrity of the credits that led to scandals and accusations.
What has been in recent years seen as stumbling process to halt the rise in global temperatures also led to calls for reforms in the UNFCC by former UN brass. The current structure of the annual UN climate summits “simply cannot deliver” the change at “exponential speed and scale, which is essential to ensure a safe climate landing for humanity,” Ban Ki-moon, former secretary general of the UN, Christiana Figueres, former UNFCCC executive secretary and several others said in an open letter during the Balk talks.
“This is what compels our call for a fundamental overhaul of the COP,” the open letter released on November 15 said. “We need a shift from negotiation to implementation, enabling the COP to deliver on agreed commitments and ensure the urgent energy transition and phase-out of fossil energy.”
There is little doubt that the years of wrangling over money has weakened the collective effort of containing climate change and its increasingly seen impacts that has begun to extract a heavy cost worldwide. Whether the UN process is enough to propel climate action and thus able to retain its credibility remains uncertain and contentious.
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