After two weeks of intense negotiations, the United Nations’s COP29 climate change summit concluded in Baku, Azerbaijan, with a commitment from developed countries to increase the funding they provide developing countries to reduce their greenhouse gas emissions and adapt to the effects of the climate crisis.
The deal reached on Sunday, two days after the conference’s scheduled closure on Friday, ensures USD 300 billion a year in climate finance by 2035, tripling the previous USD 100 billion target set in 2009 – and only met in 2022. It also calls on countries to work toward unlocking a total of USD 1.3 trillion a year from “all public and private sources” by 2035.
Developed countries will have to “take the lead” in delivering the USD 300 billion but the target, known as the New Collective Quantified Goal (NCQG), will include finance from international institutions such as the World Bank. The agreement also encourages developing nations such as China to make voluntary contributions “through South-South cooperation”.
However, the deal has been met with huge disappointment from developing countries and campaigners, who had been calling for firmer commitments, including as much as USD 1.3 trillion directly from developed nations.
“I regret to say that this document is nothing more than an optical illusion,” Indian delegation representative Chandni Raina said at the closing plenary after the finance target was approved.
“This, in our opinion, will not address the enormity of the challenge we all face. Therefore, we oppose the adoption of this document.”
In their final hours, the climate talks in Baku were on the brink of collapsing, with two negotiating blocs – the Least Developed Countries (LDC) and Alliance of Small Island States (AOSIS) – temporarily walking out of negotiations. Consensus was finally reached after the initial proposal of USD 250 billion was increased.
UN Secretary General Antonio Guterres said in a statement that he had “hoped for a more ambitious outcome” but that it “provides a base on which to build”.
German foreign minister Annalena Baerbock echoed Guterres and said the USD 300 billion “won’t meet all the needs” and that they will work to reach the USD 1.3 trillion figure. “Nobody forgot about our historic responsibilities,” she added.
Developed countries are dealing with economic and political constraints, from limited budgets to rising populist movements opposed to climate action, and this was seen as influencing the COP.
“We live in times where multilateralism seems impossible,” Baerbock said. The election of Donald Trump as president of the United States during the COP talks also raised doubts over whether the US would contribute to the finance target, given his withdrawal of the country from the Paris Agreement during his previous term and continued posturing against climate action.
The promised funding falls short of the USD 5 trillion to USD 6.8 trillion total that developing countries will reportedly need by 2030 to implement their climate plans. Countries have also asked for climate finance to come in the form of grants as loans contribute to increasing their debt burdens. While the agreement recognises the need for public, grant-based funds, it does not require a commitment.
“This has been the most horrendous climate negotiation in years due to the bad faith of developed countries,” said Tasneem Essop, Executive Director of Climate Action Network (CAN), in a concluding statement after the final plenary. “This was meant to be ‘the finance COP’, but the Global North turned up with a plan to betray the Global South.”
With a finance target agreed – albeit contentiously – countries will face the task of increasing their climate ambition next year with the presentation of their new climate change plans, or Nationally Determined Contributions (NDCs). These are expected to be ready before the next climate summit, COP30, to be hosted by Brazil in November 2025, in the Amazon city of Belém.
The world is currently on track for 3.1C of global warming by the end of the century based on countries’ current pledges, according to the UN Emissions Gap Report, while scientists are “virtually certain” that this year will be the hottest on record. This happens as countries deal with escalating climate impacts, including floods, droughts and heat waves.
So far, the United Arab Emirates, Switzerland and Brazil have presented their new NDCs. Other countries have announced emission reduction targets, such as the United Kingdom, but not yet their NDC.
Ilan Zugman, director for Latin America and the Caribbean at 350.org, said the fact that Brazil will take over the presidency of COP gives the world a chance to change its course. “Brazil has to show climate leadership, asking countries to present ambitious climate targets that leads to a just energy transition,” he added.
Closing the plenary, Marina Silva, Brazil’s environment minister and a candidate to be the next COP president, said it was necessary to keep working to achieve a finance deal to align with 1.5C.
“At COP30, our objective will be to do what is needed to keep 1.5C in reach,” she said, adding that COP29 was “a difficult experience” and called on countries for solidarity.