New climate finance goal agreed at US $1.35 tn amid bitter recriminations from developing countries as COP29 ends

The overtime UN’s 29th climate talks ended on Sunday morning with agreements on key issues including the new climate finance target, now set at US $ 1.35 trillion a year by 2035. Developing countries, however, were dissatisfied, calling the agreement negatively, from insulting to betrayal

After two weeks straight and more than 30 hours of overtime, COP29 or the 29th Conference of Parties to the UN Framework Convention on Climate Change (UNFCCC COP29) was wrapped up on Sunday morning with mix gestures of delegates and negotiators from developed and developing countries as well as CSO observers.

Dubbed as “Climate Finance COP”, which placed the new climate finance target high on the agenda since Day 1, COP29, held in Baku of Azerbaijan, saw developed countries pledge to triple the current climate funding, US $100 billion a year to US $300 billion a year until 2035. More critically, a new agreement on the new goal, which will replace the previous goal of US $100 billion set in COP15 since 2009, is set for 2035 onwards at US $1.35 trillion, but a large sum of it would be secured by private sector as well.

The new climate finance target, known formally as the New Collective Quantified on Climate Finance (NCQG), was agreed in a process that requires all nations to unanimously agree on every word of the agreement, according to the UNFCCC.

Executive Secretary of UN Climate Change Simon Stiell viewed that the new finance goal is “an insurance policy” for humanity, amid worsening climate impacts hitting every country. But like any insurance policy,  it only works if premiums are paid in full and on time, he added.

“Promises must be kept, to protect billions of lives,” said Mr. Stiell. “It will keep the clean energy boom growing, helping all countries to share in its huge benefits: more jobs, stronger growth, cheaper and cleaner energy for all.”

According to the International Energy Agency (IEA), global clean energy investment is expected to exceed US $2 trillion for the first time in 2024.

Mixed gestures

While some delegations applauded the deal, others, especially from the developing countries, expressed their deep disappointment at what they argued was an “insulting” financing target and the fact that the agreed text failed to build on an agreement passed last year calling for nations to “transition away from fossil fuels”. Many developing countries, including India and other countries from South America and Africa like Bolivia, Cuba and Nigeria, however, reacted furiously to the agreement.

A representative from the delegation of the European Union (EU) was reported as saying by UN News that the new climate finance goal would simply bring “much, much more private money on the table, and that is what we need. And with these funds, we are confident we will reach the 1.3 trillion objective.”

Representatives from India, however, strongly denounced the new goal, calling it a “paltry sum”, while emphasising: “We seek a much higher ambition from the developed countries [and the amount agreed] does not inspire trust that we will come out of this grave problem of climate change,” according to the same news portal.

Another representative from a group of small island nations was also quoted as saying by UN News that the conference outcome highlighted “what a very different boat our vulnerable countries are in, compared to the developed countries”. “After this COP29 ends, we cannot just sail off into the sunset. We are literally sinking,” the representative said.

The Guardian, which sent a team of journalists to report live from the event, reported that India also raised last-minute objections but failed to prevent the agreement from being gavelled through by the Cop president, Azerbaijan’s environment minister Mukhtar Babayev. The country said it “could not accept” the settlement, the newspaper reported.

The Power Shift Africa thinktank’s director, Mohamed Adow, told the newspaper: “This [summit] has been a disaster for the developing world. It’s a betrayal of both people and planet, by wealthy countries who claim to take climate change seriously. Rich countries have promised to ‘mobilise’ some funds in the future, rather than provide them now. The cheque is in the mail. But lives and livelihoods in vulnerable countries are being lost now.”

l Credit: COP29 Azerbaijan

Since Day 1, the newspaper noted that the world’s poorest and most vulnerable countries fought hard for what it noted as “a bigger slice of the money to come directly from developed countries”. They also wanted more of the available finance to go to the countries most in need, instead of being shared with bigger emerging economies such as India, it further noted.

The host country was strongly criticised since the first day for its running of the COP as it’s among the world’s top oil and gas producing countries with oil and gas making up 90% of its exports and fossil fuel interests were highly visible at the talks.

The Guardian also observed and reported that two groups of particularly vulnerable nations, the Alliance of Small Island States and the Least Developed Countries, walked out of one meeting in protest late on Saturday afternoon before returning later. Huddles among negotiators were also seen taking place at the Closing Plenary session on Saturday evening onwards.

The newspaper also exclusively reported that Saudi Arabia played a highly obstructive role, according to its insider sources. As reported by the Guardian, a Saudi official extraordinarily attempted to alter one key text without full consultation. It also tried repeatedly to remove references to the “transition away from fossil fuels” which was agreed at last year’s Cop28 summit.

“It was clear from day one that Saudi Arabia and other fossil fuel-producing countries were going to do everything in their power to weaken the landmark Cop28 agreement on fossil fuels. At Cop29, they have deployed obstructionist tactics to dilute action on the energy transition,” the pressure group Oil Change International’s representative, Romain Ioualalen, was quoted as saying.

The newspaper reported that the talks were high-stakes from the start as they opened just days after Donald Trump won re-election as US president. Trump has made his intention clear in public that he intends to withdraw the US from the Paris Agreement when taking office in January.

He is likely to be hostile to providing any climate finance to the developing world, the news paper noted. Faced with the prospect of reconvening next year with a Trump White House in place, many countries decided that failure to agree on a new financial settlement in Baku was too much of a risk, it further noted.

The US along with China, the world’s two biggest economies and biggest emitters of greenhouse gases, which are normally key nations at the COPs, turned a low key, allowing other countries to drive the talks, according to the newspaper. It noted that the looming presidency of Donald Trump cast a pall over the US delegation’s participation although it’s still made up of officials from Joe Biden’s administration. On the other hand, the deal will mean China will contribute to climate finance for the poor world voluntarily, unlike rich countries which are obliged to provide cash, the newspaper noted.

The Guardian also reported that developed countries insisted they could not offer any more, owing to their own budgetary constraints.

Carbon markets

COP29 also reached agreement on carbon markets, which several previous COPs had not been able to achieve. The UNFCCC noted that the deal will help countries deliver their climate plans more quickly and cheaply, and make faster progress in halving global emissions this decade as required by science.

The final building blocks under Article 6 of the Paris Agreement will set out how carbon markets will operate, making country-to-country trading and a carbon crediting mechanism fully operational (Article 6.2). Standards for a centralized carbon market under the Article 6.4 was also agreed, according to the organisation.

The mechanism, known as the Paris Agreement Crediting Mechanism, is underpinned by mandatory checks for projects against strong environmental and human rights protections, including safeguards that ensure a project can’t go ahead without explicit, informed agreement from Indigenous Peoples. It also allows anyone affected by a project to appeal a decision or file a complaint.

The stronger national climate plans (Nationally Determined Contributions, or NDCs 3.0) become due from all countries next year. These new climate plans must cover all greenhouse gases and all sectors, to keep the 1.5°C warming limit within reach.

Adaptation

COP29 also decided on some matters related to the adaptation front. The decision contains a provision for the establishment of a support programme for the implementation of National Adaptation Plans (NAPs) for the LDCs, the UNFCCC noted.

The Baku Adaptation Road Map and Baku high-level dialogue on adaptation to enhance the implementation of the UAE Framework were launched at the event. The High-Level Dialogue on National Adaptation Plans convened to address the growing urgency of climate adaptation. 

The discussions of ministers to donors focused on innovative financing, technical support, and accelerated action to meet the 2025 submission deadline for NAPs. The event concluded with a strong call to action to expedite NAPs and translate plans into tangible outcomes, said the UNFCCC.

The indicators of the work programme to help determine the adaptation goal, however, will be further worked out towards COP30 in Brazil.