COP29: Climate Finance is still a Dream of Future
Dr. Zheer Ahmed
The Conference of Parties (COP) 29th annual United Nations Climate Change Conference was held in Azerbaijan’s capital Baku on November 11, 2024. Approximately 80,000 participants from nearly 200 countries, including governmental officials, academics, and activists, assembled in Baku over two weeks to address climate financing and other challenges related to global warming. The conference primarily aim was to obtain US $100 billion each year to tackle climate-related issues mostly in developing countries.
During the opening remarks, COP29 President and Azerbaijan’s ecology minister, Mukhtar Babayev, stated that the results of COP29 will depend on actions rather than rhetoric. Moreover, he stated, ‘the newly defined efforts must result in more effective outcomes’. He also urged global leaders to collaborate for tackling climate change issues, in which one of the most pressing issue is climate financing.
Azerbaijan, a significant fossil fuel producer and a contentious selection as the host of the climate conference, COP29, presents both an opportunity and a potential concern. The Azerbaijani President Ilham Aliyev aimed to host the conference to enhance his country’s standing worldwide. In this regard, COP29 garnered significant publicity for Azerbaijan, albeit of a negative nature.
Aliyev’s administration faced criticism for implementing a comprehensive crackdown aimed at suppressing all forms of internal dissent prior to the conference. Prominent Western media, criticized Azerbaijan’s climate action record, leading Aliyev to denounce a ‘smear’ campaign against Baku. However, he compromised his own climate statements in September by pledging to increase oil and gas output.
The likelihood that COP29 provides the anticipated outcomes and financial commitments was uncertain as many prominent world leader stayed away from the summit. Chinese leader Xi Jinping was one of them. Notable attendees in the summit include UN Secretary-General Antonio Guterres, President of the European Council Charles Michel, Belarusian leader Alexander Lukashenko, and renowned Indian spiritual guru Sadhguru. The United States sent a group headed by White House senior adviser John Podesta. Donald Trump’s electoral victory raises issues about whether the United States would make any contribution toward the COP29 financial objective as Trump has already threatened to withdraw the United States from the Paris Climate Agreement.
COP29 represents an essential turning point in the international climate discourse as it was focused on climate financing, which is a crucial enabler for realizing the objectives of the Paris Climate Agreement. Despite advancements in reduction and adaptation techniques, equitable climate finance commitments continue to pose an important challenge, especially for developing nations disproportionately affected by climate impacts.
Developed countries have a responsibility to increase financial and technological resources to assist developing countries in combating climate change. In 2009, developed countries proposed to generate US $100 billion annually starting in 2020, a goal they assert was met in 2022. Developing nations challenged this assertion. The 2015 Paris Agreement stipulated the necessity of establishing a new financial objective, referred to as the ‘New Cumulative Quantitative Goal’ (NCQG), prior to the year 2025. The NCQG lacks clarity regarding the specific year from which the new amount is to be mobilized. After conducting several evaluations of their needs, the developing countries have requested that the NCQG be set at 1.3 trillion dollars annually. The primary focus of COP29 was to finalize the NCQG.
However, COP29 failed to address the demands of developing countries for the mobilization of US $1.3 trillion annually in climate finance. However, the developed nations successfully negotiated an agreement, committing to allocate $300 billion annually, starting in 2035. India categorically dismissed the proposal, describing the amount as ‘abysmally poor’ and ‘paltry’. New Delhi expressed concerns regarding the process of adopting the agreement, characterizing it as ‘stage-managed’. In conjunction with India, a number of developing, least developed countries, and island states expressed their disapproval of the proposal. Curiously, China, the largest and most powerful developing country, remained silent all through, giving its tacit approval to the US $300 billion figure.
The developed countries also dismissed the additional requests from the developing countries for the funding to be primarily sourced from public funds and allocated predominantly as grants or concessional loans. The concluding agreement stated that the $300 billion would be generated from a range of sources, both public and private, as well as bilateral and multilateral, incorporating alternative sources as well. The certainty regarding the disbursement of funds as grants or concessionary loans is lacking. However, developed countries looked at COP29 as a success. European Union climate commissioner Wopke Hoekstra supported the idea of US $300 billion for climate financing and called that the deal in itself is truly an exceptional development to address the effect of climate change as COP29 initiated a beginning of new era for climate finance. Nevertheless, the $300 billion does not address the problem of climate financing for developing countries and thus, though COP29 has reached an agreement, yet it has failed to satisfy any of the country demanding for a fair deal of climate finance.
Dr. Zheer Ahmed is Assistant Professor at the Center of Excellence for Geopolitics and International Studies, REVA University, Bengaluru.
