Can COP29 fulfil climate finance promises?

Stakeholders will be in Baku, Azerbaijan, next month for COP29. It’s up to the developed countries to find an intervention to an escalating emergency: more precisely, for money being moved from rich to poor to combat climate change. Initially, they promised $100 billion per year by 2020; that didn’t happen; by 2022, the developed countries said it did.

The demand is now much greater: $1 trillion a year, a sign of not just the increasing crisis but also the mismatch between promise and demand.

This year’s COP is set to be defined by its focus on the monetary commitments required to address the escalating impacts of climate change, especially for the developing countries that bear the brunt of climate-related disasters.

It all boils down to the negotiators grappling with one of the biggest challenges in addressing climate change: raising and investing the necessary funds to achieve the world’s climate ambitions.

Climate finance has been at the heart of such negotiations for decades — a promise-filled, but strained exchange of promises, numbers and responsibilities. Its jargon is academic: mitigation, adaptation, loss and damage.

However, it’s more nuanced than that. It is about how to funnel cash from one side of the planet, which contributed in significant part to global warming, into another, where those who did not set the problem up are on the losses.

According to the Intergovernmental Panel on Climate Change (IPCC), people in the developing world are 15 times more victims of natural catastrophes than people in the developed world.

In a world facing huge financial challenges to overcome post-disaster rehabilitation, many developing countries need greater assistance in confronting the effects of climate change.

It’s customary to talk about climate finance under three broad categories, each more fraught than the other. First: the projects we can see, such as investments in wind farms or solar panels — projects that pay off in dollars but also produce obvious emissions cuts. They are simple, straightforward and more attractive to the investors. These programmes — often described in optimistic terms at meetings like COP — form a part of the worldwide transition to renewable energy.

But the other buckets — the undetected costs — are harder to fill.

The second bucket, adaptation, is about resiliency: making readiness for what’s already ahead. Walls and drought-tolerant crops, transforming lives to meet a distant future. These aren’t investments. They are, essentially, bets — a bet that the storms just around the corner will not wipe out whole communities. And it is in the bucket of adaptation that the biggest funding holes are. It will all be quietly and anxiously discussed at COP29: how much money and where it will come from.

The third bucket, however, is the most controversial of them all: loss and damage. This is not mitigation, or adaptation; this is compensation. And compensating those nations that, without their own choice, lose it all to climate change. They have ruined the ground, desecrated the ecosystems, drowned the families. How do you measure such loss?

The Loss and Damage Fund will be the subject of another COP29 scuffle, but the numbers are unassailable. The wealthy countries are yet to do the same. After the fund was launched, a number of developed nations pledged over $420 million in voluntary donations at the conference. To date, commitments have already risen to $661 million.

But at the heart of all these talks is the nagging doubt: will the richest nations of the world be able to find the political will to fulfil their promises? Or, will they continue to rely on slick language, on assurances of future investments, on private equity moving in where governments are going?

For the less developed, the solution is urgent. It’s not just some nebulous talk. They are mortal or immortal. Climate change is upon us — rising sea levels, flooding, droughts. Across small island nations, whole lifestyles are disappearing like sand through the fingers. In coastal cities, homes can be made impossible to live in within a lifetime for any family.

The figures are staggering: $1trillion annually. But for those of us coping with the threat of climate change, it’s not about the number, because it is a matter of survival.

The fixes are there. Climate capital could trickle out in novel ways, such as green bonds, sustainable credit and cutting-edge global alliances. The World Bank and the International Monetary Fund might also adapt their lending strategy to include climate adaptation and resilience.

But all these proposals, all these potential remedies have an unsaid secret: none of this matters if the money is not coming.

It’s a difficult path ahead, but one thing is for sure: climate finance will enable us to take meaningful climate action. If it isn’t available, the world will have no chance of achieving its emission reduction commitments and shielding underserved communities from the devastation caused by climate change.

COP29 will end, like it always does, with speeches and signings, with commitments to action. For those on the frontlines of climate change, though, the question will be: when? What about the cash? Where will the commitments go? Because for now, they stand by, watching the waters ebb and flow, the heat surge, and still hoping the world won’t leave them behind.