Summary:
- New Climate Financing Goals for 2035
- Tripling of Funds for Vulnerable Nations
- Deferred Discussions on Mitigation
In the early hours of Sunday 24th November 2024, in Baku, Azerbaijan, the Presidency released draft decision texts at the 29th Conference of Parties (COP29) to the UN Framework Convention on Climate Change (UNFCCC), addressing key negotiating issues.
The final plenary of the COP29 then reconvened, during which the climate finance text was adopted. This decision drew sharp criticism from developing countries such as India and Nigeria, who denounced the outcome as a “joke.”
Richer countries, whose manufacturing industries and fast-paced commercialisation have largely led to the rapid depletion of the ozone layer, agreed to provide $300bn annually, with an overall climate financing target to reach “at least USD$1.3 trillion by 2035”. This new collective quantified goal (NCQG), will replace the existing $100bn goal that is due to expire in 2025 and is a mixture of grant, loan and development bank funding.
The announcement left many feeling underwhelmed. UN Secretary-General António Guterres expressed disappointment, saying, “I had hoped for a more ambitious outcome – on both finance and mitigation – to meet the great challenge we face.”
With global warming already peaking past 1.5 degrees Celsius, Small Island Developing States (SIDS) and Least Developed Countries (LDCs) had also hoped for a better outcome. With the consideration of rising inflation, Ambassador to Climate for Antigua & Barbuda, Ruleta Camacho-Thomas described it as “a limited increase”.
“We’re not happy,” she admitted. “At one point, we walked out of the negotiation room because we weren’t being listened to. There was a moment when consultations happened with every group except us, and they tried to present a text based on those discussions. We said no—you didn’t include us, so we’re not accepting it.”
The pressure ultimately led to some concessions.
What’s in the deal?
Ambassador Camacho-Thomas explained that while the $300 billion figure is below expectations, it’s not set in stone.
“In the final hours, we negotiated a process to explore increasing that amount to better align with the goal of limiting global temperature rise to 1.5 degrees Celsius,” she said.
The package includes:
- A tripling of funds to existing climate change financing mechanisms accessible to SIDS and LDCs.
- A call for traditional lenders to provide more concessional and grant funding for vulnerable nations.
Still, accessing these funds will require significant effort. “This isn’t free money,” the ambassador noted. “We’ll have to ensure we meet the requirements for funding and create projects that align with these mechanisms.”
COP29 also deferred, to next year, discussions on the mitigation package, which was deemed too weak. “We decided it was better to take what we have now and push for stronger commitments next year,” Camacho-Thomas explained. The next COP, in Brazil in 2025, is expected to issue a report on how to boost climate finance for poorer countries.
What developing countries asked for
Developing countries went into COP29 with a clear list of demands:
- Fairness in contributions: They opposed expanding the pool of donor countries without clear guidelines to ensure equity.
- Transparent funding: Stop counting non-climate-specific funding like Official Development Assistance (ODA) as climate finance.
- Accountability: Strengthen mechanisms to track progress and adjust funding where needed.
- Specific funding targets: The Least Developed Countries (LDCs) called for $220 billion annually, while the Alliance of Small Island States (AOSIS) asked for $39 billion.
But these demands, along with a push to “transition away” from fossil fuels—hailed as a major win at COP28 in Dubai—did not make it into the final deal.
The deal they had to settle for
In the end, developed nations committed to providing $300 billion annually as part of a new climate financing goal to reach at least $1.3 trillion by 2035. This package includes:
- Tripling funds for Small Island Developing States (SIDS) and LDCs.
- Encouraging concessional loans and grants from traditional lenders by 2030.
- Continued support for climate adaptation projects.
While these commitments mark progress, they fall far short of the funding needed to limit global warming to 1.5°C and address the immediate vulnerabilities of SIDS and LDCs. The 2021 Needs Determination Report by the UNFCCC’s Standing Committee on Finance estimates that developing countries will require $5.8–5.9 trillion to implement actions outlined in their climate plans (NDCs) by 2030.
Among the 153 Parties analyzed, 4,274 needs were identified, with 1,782 having associated costs. Of the total financial need, $502 billion must come from international sources, while $112 billion is expected from domestic funding. In the Latin America and Caribbean region, 771 needs were identified in NDCs, with 166 including cost needs totaling $168.2–168.3 billion. Nearly 60% of this amount was attributed to a single NDC.
Additionally, the call to fill the finance gap was loud at COP29, with civil society organisations never failing to demand the $5 trillion.
According to Climate Action Network’s Executive Director, Tasneem Essop, “The Global North must start repaying this overdue climate debt, beginning with a COP29 agreement that prioritises direct grants over loans, with at least US$1 trillion annually in public finance as part of the overall US$5 trillion per year commitment. This repayment is essential to cover the escalating costs of climate impacts, loss and damage, adaptation, and a just transition.”
Key outcomes
- Commitments were made to operationalize the Loss and Damage Fund, though actual contributions remain insufficient.
- Adoption of Article 6, governing carbon markets, marked a regulatory win.
- Other critical decisions addressing holistic climate change issues were also adopted.
- Strengthened climate reporting with 13 countries submitting Biennial Transparency Reports (BTRs) and enhanced tools to support developing nations.
- Programs for National Adaptation Plans (NAPs) and a roadmap for ambitious adaptation targets leading to COP30.
- Adoption of the Baku Workplan to amplify Indigenous and local community voices in climate action.
- Extended the Lima Work Programme on Gender for 10 years and initiated a new gender action plan for COP30.
- Agreement on a COP29 declaration on “Green Digital Action” which is a step towards greater integration of digital technologies into global efforts to combat climate change.
Reactions from key stakeholders
Alliance of Small Island States (AOSIS): Described the agreement as a “placebo” rather than a real solution. “Our vulnerabilities weren’t adequately addressed,” they said, explaining that the text ignores minimum allocation floors for SIDS and LDCs, of which we requested at least $39 billion for SIDS and at least $220 billion for LDCs.
LDCs: “The text is weak on many issues”. It includes inadequate funding, no guarantees of minimum allocations for these groups, and the absence of support for Loss and Damage in the new goal.
Climate Action Network (CAN): Civil society groups called the outcome “a very bad deal” and criticized developed nations for their intransigence. As negotiations continued into the night, 335 civil society organisations issued letters to Developed Countries and the G77+China to state how “no deal in Baku is better than a bad deal£.
CAN Africa: Developed countries should have put a Climate Finance quantum on the negotiating table by now.The math is simple. $1.3tn/yr. Expert analysis by ODI Global says it should be no less than USD$900bn in grants and grants-equivalent.
Before the new deal, under the Paris Agreement, wealthy countries had pledged to contribute $100 billion annually to help reduce greenhouse gas emissions and make systems more resilient to climate change.
However, just 2.5% of that finance reached SIDS. According to UN Trade and Development (UNCTAD), SIDS only had access to $1.5 billion out of $100 billion in climate finance pledged to developing countries in 2019. To put that into perspective, that amounts to about $26.3 million for each of the 57 countries. For comparison, Hurricane Irma, a Category 5 storm, caused $150 million in damage to Barbuda alone in 2017, and more than $10 billion in losses across the Caribbean. Irma also affected the U.S., forcing 6 million Floridians to evacuate and resulting in 129 deaths.
Camacho-Thomas insists that developing countries are not asking for handouts. “This is not free money,” she said. “We have to do a lot of work in order to get this.”
“There’s science that has irrevocably linked GHG emissions to climate change. So this is payment to address damages that countries have done. We always stand on science, and this is the polluter pays principle.”
According to the Rio Convention on Environmental Protection, there’s a principle called the ‘Polluter Pays Principle.’ This means that the countries responsible for greenhouse gas emissions must pay for the damage they’ve caused. “The financing that we are asking for, and this is not random, we’re not picking numbers out of a hat. Research has been done, and the financing that we are demanding for adaptation and mitigation will only take us to 1.8. So can you imagine almost a doubling of the impacts that we are seeing now, and what that will mean for us? This is not about begging, this is about survival for us. Right, this is about our survival.”
Simon Stiell, Executive Secretary of UN Climate Change, summed it up: “No country got everything they wanted, and we leave Baku with a mountain of work to do.”
See you in Belem, Brazil for COP30!
—
This story was originally published by Island Press Box, with the support of Climate Tracker’s COP29 Caribbean Climate Justice Journalism Fellowship.
