- The success of the annual UN climate summit in Baku will hinge upon climate finance, which largely depends on wealthy countries agreeing to release more funds to mitigate and adapt to the impacts of the climate crisis to developing nations.
- The Baku summit is expected to consensually arrive at the quantum of funding, known as the New Collective Quantified Goal, which will replace the 2009 pledge by developed nations to provide $100 billion.
- Several other issues, such as the impending return of climate-sceptic Donald Trump to the White House, working out a framework for carbon credits and offsets, and the European carbon tax are expected to lead to heated arguments and hectic negotiations.
The primary agenda of the UN climate summit in Baku that started today can be summed up in just one word: finance. Unless arrangements are made this year for climate finance, the poor and vulnerable worldwide will continue to suffer the most and the planet will keep becoming unbearably hot.
Leaders from more than 100 nations gathered at COP29 in Baku, Azerbaijan’s capital, from November 11 to 22 to discuss the threats of global warming and devise ways to raise funding to mitigate and adapt to the rapidly accelerating climate crisis.
Although ensuring the availability of climate finance is foremost at COP29, the Republican party candidate Donald Trump winning the presidential elections in the U.S. is expected to be the main topic of conversation in the conference corridors. COP29 is short for the 29th Conference of Parties, where parties denote nations signatories to the United Nations Framework Convention on Climate Change (UNFCCC). President-elect Trump is infamously known to have said, “Drill, baby, drill” in his presidential campaign, expressing support for oil and gas drilling, and is expected to be a major hurdle to global climate efforts.
In his first term, which ended in 2021, Trump withdrew the U.S. from the 2015 Paris climate pact and boosted the production of oil and gas. At the end of 2024, which is most likely be the warmest year on record, according to the Copernicus Climate Change Service, a European research organisation, negotiators and activists face the daunting prospect of a second Trump administration, even as extreme weather events driven by climate change have resulted in an unacceptable number of deaths worldwide and trillions of dollars in losses.
Alarming backdrop
The use of fossil fuels intensified all of the ten deadliest extreme weather events of the past 20 years that contributed to more than 570,000 deaths, the World Weather Attribution (WWA), a scientific collective, said in a recent study. “Climate change isn’t a distant threat,” said Friederike Otto, co-founder and lead of WWA at the Centre for Environmental Policy, Imperial College London. “If we keep burning oil, gas and coal, the suffering will continue.”
Global temperatures were already 1.48°C above the preindustrial level in 2023, and it is virtually certain that it would be more than 1.5°C in 2024, Copernicus Climate Change Service said. In the Paris agreement, nations had agreed to keep global temperature rise well within 2°C and make efforts to keep it below 1.5°C by the end of this century. Since the 1.5°C ceiling is likely to be breached this year, expectations from and credibility of the legally binding pact are already low.
Countries must collectively commit to paring 42 percent off annual greenhouse gas emissions by 2030 and 57 percent by 2035 in the next round of nationally determined contributions, and back this up with rapid action, the UN Environment Programme (UNEP) said in its Emissions Gap Report 2024.
At the previous summit in Dubai, countries adopted a roadmap for transitioning away from fossil fuels, a historic first for a UN climate conference. However, the Dubai declaration failed to commit to a full phase-out of oil, coal, and gas.
Continuing talks about the operation of carbon markets, which allow companies to offset their greenhouse gas emissions by buying carbon credits, could help expand the scope of climate finance, some analysts said. One of the aims at COP29 would be finalise a framework for a global carbon market to facilitate global cooperation and financial support for climate action.
Current voluntary commitments put the planet on track for a global temperature rise of 2.6-2.8°C in this century, the UNEP said. Even worse, policies currently in place are insufficient to meet even these commitments, it added. If nothing changes, the planet is heading for a temperature rise of 3.1°C by 2100.
“We are teetering on a planetary tightrope,” UN Secretary-General Antonio Guterres said, reacting to the UNEP report. “Either leaders bridge the emissions gap, or we plunge headlong into climate disaster, with the poorest and most vulnerable suffering the most.”
“Every fraction of a degree matters in terms of lives saved, economies protected, damages avoided, biodiversity conserved, and the ability to rapidly bring down any temperature overshoot,” UNEP executive director Inger Andersen said.
Climate finance holds key
As extreme weather events in 2024 have made their presence felt across the world, the Adaptation Gap Report 2024 of the UNEP found that nations must dramatically increase efforts to adapt to the changing climate, starting with a commitment to act on finance at COP29. The finance available to developing and poor countries to help adapt to the impacts of the climate emergency is far short of the $359 billion a year required, the report released on November 7 said.
It is abundantly clear that the success of COP29, as in its previous iterations, will be measured against how much funding wealthy countries agree to transfer through multilateral mechanisms to developing economies to help them cope. This is expected to be central to the negotiations in Baku.
Negotiators will try to establish a new climate finance target, replacing the goal set in 2009 to raise $100 billion a year for developing countries by 2020. The target, incidentally, was not met in the first few years, and the OECD report’s claim of meeting it in 2022 is also disputed.
The key issue would be the quantum of funding. A decision is expected on a New Collective Quantified Goal (NCQG) for climate finance, which is meant to replace the 2009 pledge. Seen as a key symbol of trust, transparency, and cooperation between wealthy and developing nations, the NCQG would be a crucial lever for strengthening the shared responsibility and mutual commitment essential to tackling the climate crisis.
Multiple estimates exist of the climate finance needs of developing countries. The UNFCCC’s standing committee on finance has said determined needs are already $455 to $584 billion based on the nationally determined contributions of 98 developing countries.
India’s submission to the UNFCCC proposes a minimum NCQG quantum of $1 trillion per year, largely funded through grants and concessional finance. While estimates vary, they indicate that $1 trillion annually will be essential to address the climate crisis, well above the previous $100 billion target. Securing these funds remains challenging.
“Once adopted at COP29, the NCQG might initiate further processes to build consensus on contributions from individual countries,” said Jonathan Beynon, senior policy advisor for the Center for Global Development, a think tank. “This dynamic framework might help adapt to changing capacities and responsibilities over time.”
Loss and Damage
Climate financing will have to come from public sources like governments and multilateral organisations and from private investments. These funds would need to be directed towards projects aimed at mitigating planet-warming carbon emissions or helping developing economies and vulnerable communities adapt to climate damage, and also help poor nations recover from losses sustained as a result of the climate emergency, which is known as loss and damage.
Annual climate finance needs to rise at least fivefold before 2030 to meet the goals of the Paris pact, according to a study by Climate Policy Initiative, a non-profit. At the Dubai summit, nations reached a consensus that included targets for climate adaptation, but failed to say how these would be funded.
There was also a historic agreement to operationalise the long-awaited Fund for responding to Loss and Damage to support vulnerable communities and countries to repair the harm caused by climate change. However, only $700 million has been pledged to the fund so far, when developing countries say at least $100 billion a year is needed.
Unless adequate financial contributions are forthcoming, the fund would risk becoming little more than a symbolic effort rather than an effective tool utilised for climate justice, experts said.
Another contentious issue to be raised in the Baku summit, even if it is not on the main agenda, is carbon tariffs brought in by the European Union that put exporting countries like India and China in a situation where massive new investments are required to comply with what is known as Carbon Border Adjustment Mechanism. The BASIC group of countries, including India, China, Brazil, and South Africa, has requested that nations hold discussions on carbon border taxes and other restrictive trade measures that are hurting developing economies.
China and India have been critical of the carbon tax as protectionist. India has said it unfairly penalises developing countries. Nations should “collectively oppose any measures to restrict trade and investment and setting up new green trade barriers, such as unilateral carbon border adjustment measures and due diligence requirements, with the pretext of addressing climate change, which is incompatible with multilateral rules and the cornerstone principles of the UNFCCC and the Paris Agreement,” the submission to the UNFCCC said.
It would be unrealistic to expect that specific decisions will be taken on these issues at the Baku summit, but countries will have to agree at least to continue discussions and send a signal that these options are still on the table.
It will be a herculean task for Mukhtar Babayev, Azerbaijan’s minister of ecology and natural resources and the president of COP29, to deliver some tangible results. There have already been alarming revelations that senior officials of Azerbaijan, a petrostate that depends heavily on producing and exporting oil and gas, have been trying to broke new deals to expand the production of natural gas.
Much of the credibility of COP29 and the UN process of multilateral cooperation would hinge on how the Azerbaijan presidency is able to allay these apprehensions and work towards evolving a consensus on climate finance and justice.
Banner image: The preparations for COP29, which kicks off on November 11, 2024. Image by UN Climate Change – Habib Samadov via Flickr (CC BY-NC-SA 2.0).
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