COP29 deal has let the world down
COP29, the latest round of climate negotiations at Baku, ended with a contested deal. The central theme was supposed to be climate finance. It refers to local, national or transnational financing that seeks to support mitigation and adaptation actions that will address climate change. For decades, developing countries have been demanding additional funding to help them take effective measures to meet the challenge of climate change. They have been demanding that rich countries shoulder a greater responsibility because primarily they are responsible for the current crisis. It is historical emissions from the Global North since the Industrial Revolution that have led to the climate crisis. The quantum of climate finance and its source have been a sticking point between developed and developing nations for a long time.
It was against this backdrop that the Baku negotiations raised expectations and hope for a good deal. The outcome sets a goal of at least $300 billion of climate finance every year by 2035 for developing countries. The money will come from a wide variety of sources — public and private, bilateral and multilateral, including alternative sources. In providing this funding, developed countries will take the lead and developing nations will be encouraged to make contributions voluntarily.
The finance goal set at Baku falls much short of the target and the timeframe developing countries had demanded — $1.3 trillion in finance every year to be mobilised by developed countries starting 2025. Not only is the figure much below the quantum but the timeframe is far off. This is by now a familiar tactic of the Global North — fix a watered-down target and a much longer timeframe to avoid any immediate commitments. Moreover, the promised funding will not come solely from the rich. Developing countries, too, will have to contribute to the kitty. Predictably, this has upset developing countries. At the end of the negotiations, India, Bolivia and Nigeria voiced their concerns over the weak deal, officially called the New Collective Quantified Goal on Climate Finance. India has also accused the presidency of the Conference of Parties (COP) of pushing through the deal without following the norms of multilateral talks held under the aegis of the UN.
Developing countries need finance and technology to meet the challenge of climate change. Money is needed for mitigation — large-scale investments are required to significantly reduce emissions. This means funding to support renewable energy projects, energy efficiency, managing living natural resources and land use, protection of terrestrial and aquatic biodiversity, clean transportation, etc. The second major requirement of additional funding is for adaptation — resources needed to adapt to the adverse effects and reduce the impacts of a changing climate. This would, for example, include funding to build infrastructure that can withstand storms and flooding, financing the relocation of infrastructure projects away from areas with rising sea levels, developing and supplying drought-resistant seeds, etc. In addition, climate finance is required for a third category of actions known as ‘loss and damage’ to help countries cope with natural disasters accentuated due to climate change.
Over the years, several mechanisms and funds have been devised for climate finance under the United Nations Framework Convention on Climate Change (UNFCCC). These include the Global Environment Facility, Green Climate Fund, Special Climate Change Fund, Least Developed Countries Fund, Adaptation Fund, etc. However, in effect, very little money has flowed into these funds and made available to developing countries. For instance, the Green Climate Fund has supported 243 projects across 129 developing countries totalling $13.5 billion during the 2020-23 period. The Adaptation Fund has committed $1.2 billion for 183 adaptation projects in several developing countries since 2010. The flow of funding from other mechanisms is even more miniscule. Overall, the finance available from UNFCCC-promoted funds and mechanisms is far below the requirement. Hence, the demand at Baku was to enhance the quantum as well as quality of finance.
The rich West has tried every trick to keep the finance goal to a minimum and delay it as far as possible. Instead of committing to new and additional funding, the effort has been to re-label existing development assistance as climate finance. Then, multilateral financing and development funding was also counted as climate assistance. Now, even private investments as well as development-bank loans and private finance ‘mobilised’ by government spending would be under the umbrella of climate finance. All this has diluted the quality of finance, which developing countries want mainly to come from public sources in addition to existing development assistance.
The return of Donald Trump in the US and his anti-climate stance were leveraged by developed countries to push through a weak finance deal. They feared that if the US walked out of the multilateral climate framework, as Trump did during his previous presidency, it could have a ripple effect to derail the UNFCCC itself. Right-wing governments in Europe may also try to slash their commitments to overseas climate finance. Under the UN process, 24 developed parties, including the US, the EU and Japan, have to provide climate finance to developing countries. If the US under Trump withdraws from the climate process, other developed nations will have to shoulder a greater burden. Therefore, the effort of developed countries was to convince the developing ones to agree to a weak deal rather than have no deal at all.
The Baku climate deal is unlikely to result in any push to address climate change with no real money being available. Carbon emissions continue to grow and the transition away from fossil fuels has hardly made progress. COP28 in Dubai called for transitioning away from coal, oil and gas, and it was hailed as a groundbreaking development as oil and gas-producing nations also supported the call. But no further steps were discussed at Baku to translate the call into action. So, it is going to be business as usual till the next COP.
