COP 29/CMP 19/CMA 6 closing plenary Credit: Vugar Ibadov/UNFCC

By Joyce Chimbi
NAIROBI & BAKU, Nov 26 2024 (IPS)

The culmination of bitter, difficult, and challenging climate negotiations concluded with an announcement from the COP29 Presidency of Azerbaijan of the “agreement of the Baku Finance Goal—a new commitment to channel USD1.3 trillion of climate finance to the developing world each year by 2035.” This is on top of the USD 300 billion that the developed world is to extend to developing nations annually by 2035.

Developed nations appear perturbed by the outrage from the Global South as the COP29 Presidency big-up what is for all intents and purposes a bad deal for vulnerable nations on the frontlines of climate change. Once an annual inflation rate of 6 percent is factored into the new goal, USD 300 billion is not the tripling of funds that is being made out to be.

The Baku deal indicates that “developed countries will lead a new climate finance goal of at least USD 300 billion per annum by 2035 from all sources, as part of a total quantum of at least USD 1.3 trillion per annum by 2035 from all actors, with a roadmap developed in 2025.”

Ambiguous Climate Finance Promises

The promise of a USD 1.3 trillion of climate finance in line with what developing countries wanted rings hollow, for the text does not lay out the road map for how the funds are to be raised, postponing the issue to 2025. Even more concerning, Baku seems to have set things in motion for wealthy nations to distance themselves from their financial responsibility to vulnerable nations in the jaws of a vicious climate crisis.

COP29 text “calls for all actors to work together to enable the scaling up of financing to developing country Parties for climate action from all public and private sources to at least USD1.3 trillion per year by 2035.”

In this, there is a mixture of loans, grants, and private financing. Essentially, the Baku agreement reaffirms that developing nations should be paid to finance their climate actions, but it is vague on who should pay.

Baku to Belém Road Map

For finer details, there is a new road map in place now known as the “Baku to Belém Road Map to 1.3T.” COP29 text indicates that the “Baku to Belém, Brazil’ roadmap is about scaling up climate finance to USD 1.3 trillion before COP30 and that this is to be achieved through financial instruments such as grants, concessional as well as non-debt-creating instruments. In other words, the roadmap is about making everything clear in the coming months.

In climate finance, concessionals are loans. Only that they are a type of financial assistance that offers more favourable terms than the market, such as lower interest rates or grace periods. This is exactly what developing nations are against—being straddled with loans they cannot afford over a crisis they did not cause.

Article 6 of Paris Agreement: Carbon Markets

Beyond climate finance, there are other concerns with the final text. Although it has taken nearly a decade of debate over carbon trading and markets, COP29 Article 6 is complex and could cause more harm than good. On paper, the carbon markets agreements 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.”

Although a UN-backed global carbon market with a clear pathway is a good deal, it falls short on the “transparency provision” as the agreement does not address the trust crises compromising current carbon markets. Countries will not be required to release information about their deals before trading and that carbon trading could derail efforts by the industrialized world to reduce emissions as they can continue to pay for polluting, and this will be credited as a “climate action.”

Climate Funds Fall Short

The Loss and Damage Fund seeks to offer financial assistance to countries greatly affected by climate change. There is nonetheless delayed operationalisation and uncertain funding, as COP29 did not define who pays into the fund and who is eligible to claim and draw from the fund.

The Adaptation Fund was set up to help developing countries build resilience and adapt to climate change. Every year, the fund seeks to raise at least USD 300 million but only receives USD 61 million, which is only a small fraction—about one-sixth—of what is required.

Final Text Quiet on Fossil Fuels

The final COP29 text does not mention fossil fuels and makes no reference to the historic COP28 deal to ‘transition away from fossil fuels’. Climate change mitigation means avoiding and reducing emissions of harmful gases into the atmosphere.

Fossil fuels are responsible for the climate crises, but the COP29 text on mitigation is silent on the issue of fossil fuels and does not therefore strengthen the previous COP28 UAE deal. Saudi Arabia was accused of watering down the text by ensuring that “fossil fuels” do not appear in the final agreement. They were successful, as the final text states, “Transitional fuels can play a role in facilitating the energy transition.”

Earlier, while welcoming delegates to COP29, Azerbaijan’s President Ilham Aliyev left no one in doubt about his stand on fossil fuels, saying that oil and gas are a “gift from God,” praising the use of natural resources including oil and gas, and castigating the West for condemning fossil fuels while still buying the country’s oil and gas.

Against this backdrop, COP29 negotiations were never going to be easy, and although the Summit overran by about 30 hours more than expected, it was certainly not the longest COP, and it will certainly not be the most difficult as Baku has successfully entrenched bitter divisions and mistrust between the developed and developing world.

IPS UN Bureau Report