- COP29 in Baku highlighted the inadequacy of global climate finance, with only $300 billion promised by 2035 against the $1.3 trillion needed to tackle climate change effectively.
- The conference underscored the disproportionate burden on developing countries, which are now expected to increase their climate ambitions despite limited financial support from developed nations.
- Now that the COP result has shown that India is unlikely to get any significant additional financial support for its mitigation and adaptation, the need to rely on domestic financial, human and intellectual capital has come into sharp focus.
The world asked for $1.3 trillion climate finance. It got $0.3 trillion. Lost in the slip between the cup and the lip were a trillion dollars that could have helped the world to be able to reduce its greenhouse gas emissions and be able to live better with its adverse impacts.
The 29th Climate Change Conference of Parties (COP29), that was recently held at Baku in Azerbaijan, dived into the most essential negotiation of all – climate finance. If the Copenhagen COP of 2009 had given hope, and the Paris COP of 2015 had moved the target to 1.5 ᵒC, the Baku COP will go into history as the most business-like meeting.
The conference at Baku was just another meeting of the nation states that are parties to the United Nations Framework Convention on Climate Change, known more popularly as the Climate Change Convention. These meetings happen every year. In that sense, COP29 was no different from its previous iterations.
However, when the environment history of 2024 is written, the COP could turn out to be the most important event of the year. This COP forced all countries, and country groupings, to throw their cards on the table. There is no need to second guess anybody’s position.
Wheels within wheels
In December 2009, the global community had great hope on the COP that was to happen in Copenhagen, Denmark in December. The then President of the United States of America Barack Obama was participating in the plenary, and he symbolised hope for many. Another young head of state, Mohamed Nasheed, President of Maldives, dramatically demonstrated to the world the perils of sea level rise by holding an underwater cabinet meeting. Not to be outdone, the Nepal government held its cabinet meeting at the Everest base camp to tell the world about the threat that climate change holds for the Himalayan glaciers.
The Copenhagen COP was high on drama, but rather low on results. The Copenhagen Accord promised a Green Climate Fund of $100 billion per year from 2020 onwards. The negotiations at Baku were to increase this corpus, considering that the adverse impacts of climate change and thereby the need for action, the size of the global economy, and inflation have all increased in the last 15 years. From that point of view, a promise of $300 billion by 2035 hardly covers inflation.
In 2009, the developed countries had greenhouse gas emission reduction targets, which the developing countries did not have. The Paris Agreement of 2015 changed this paradigm. Even though voluntary, every country – developed or developing – had to decide its nationally determined contributions to mitigate climate change. Each country also had to increase its contribution every five years and communicate to the world body.
India, for instance, had no emission targets during the Copenhagen COP. It announced its first set of NDCs in 2015, and the second iteration in 2022. As per the updated NDCs, India increased its ambitions for reducing emission intensity of its GDP by 45% by 2030, instead of the earlier announced 35%. It has also raised the target of generating 500 GW of energy from non-fossil fuel sources, as compared to 400 GW announced earlier.
One can argue that India is no longer a developing country but an emerging economy, so it is natural that it should have increasing ambitions on climate change mitigation. But there are many smaller countries with weaker economies in the list that have submitted updated commitments – Benin, Togo, Burundi, Belize, Samoa and Fiji – to name a few. Most of these countries would be under pressure to further increase their ambitions starting with the new cycle in 2025.
Countries around the world had already started investing their own financial resources and had started working on mitigation. The Economic Survey 2023-2024 of the Indian government reported progress on reduction on emission intensity per rupee of the GDP, through a relative decoupling. While even though both the national economy and greenhouse gas emissions have been growing, the emissions have grown slower than the economy.
It is under these circumstances that the developing countries were asking for support from developed countries for their mitigation action. Juxtaposing the 2009 situation (where developing countries had no emission reduction targets), to 2024 (where every country had voluntary targets and had spent their resources towards it), it was justifiable to expect support from the developed countries. The Baku commitment, however, was found inadequate.
Eating the cake and having it too
The problem with the global carbon party is that those who came in earlier ate most of the cake and are suggesting rules on how others should share the crumbs. Climate change is happening not only because of the present-day emissions, but also because of historical reasons. The Industrial Revolution between 1850 and 1900, which accelerated the need for and the use of fossil fuels, is considered to be the historical milestone from where the current development paradigm of emission-intensive economic growth began.
The countries which industrialised earlier in the curve were also those that had colonised most of the globe. For them, with their military and political might, accessing natural resources from their colonies was easy. They could also transport shiploads of free or cheap labour to wherever they needed it.
In the more recent decades, when the adverse environmental impacts of this growth started becoming visible, the early-developed countries moved their production units into other geographies that were behind on this curve. Just as when the newly-industrialising countries were getting happy with their economic independence, they were told to clean up their act.
Instead of providing financial support, the developed countries have been asking for additional levies in the recent years. The Carbon Border Adjustment Mechanism (CBAM), announced by the European Union (EU), will impose additional tax for products imported into the EU region “to put a fair price on the carbon emitted during the production of carbon intensive goods.”
The ring could lose its zing
Environmentally, the results from the Baku conference becomes the most defining moment of 2024 since it puts an end to expectation on the climate finance front. This has implications for India.
Located mainly in the tropical latitudes, India is still heavily dependent on its monsoonal system to drive its economy. When the stock exchange traders in Mumbai kick off the muhurat trading (an auspicious stock market trading session) during the Diwali celebrations, they repeat a tradition that honours the kick-starting India’s annual economic cycle after the kharif harvest. These are crops that are sown after the southwest monsoon passes through different parts of the country. Economists make their prognosis for the coming year observing the sale of motorcycles and tractors, and the Diwali celebrations. These are all proxy indicators to the abundance or otherwise of the harvest.
A changing climate has been causing concern over India’s agricultural production. The director general of the India Meteorological Department had told Mongabay India that the trend of extreme weather events is already replacing the cyclicality of the monsoons. This trend will only worsen, since the larger Indian Ocean ecosystem is warming faster than the other ocean systems, and within it the Arabian Sea temperature has already reached the cyclogenesis point.
Even though the Green Revolution of the 1960s increased the productivity and production of farms and plantations, it also made the agricultural systems more vulnerable to even slight changes to climate. With successive rounds of successful crop breeding, Indian agricultural research has managed to create high-yielding varieties and hybrids that give their best yield under specific agro-climatic conditions. The flip side – when the weather patterns change, these very same high performing crops lose their resilience. Thus, unseasonal rains, or an out of the ordinary long dry spell, can reduce the agricultural production in a region badly.
According to the data compiled by the Ministry of Statistics of Government of India, the primary sector of the Indian economy (agriculture and mining) contributed 15.2% of the GDP in 2023-24. Of this, agriculture contributed 13.26%. The secondary sector (manufacturing related) contributed 26.24% and the tertiary sector (service industry related) contributed nearly half at 49.87%.
In terms of development, this is the classical trajectory for countries emerging from the developing into the developed world – where the share of agriculture reduces and the manufacturing and services sector benefits. However, hidden behind these statistics is the fact that 17.78% of the world population lives in India, and despite the development trajectory 42.86% of the population earned their livelihood from the agricultural sector.
Thus, the adverse impact of climate change on agriculture can have a disproportionate impact on the economy, and a large section of the population. When this section buys lesser number of motorcycles, cars and tractors, or holds back their planned house construction activities, there will be a domino effect across the economy. The muhurat bell may have the ring, but not the zing.
With improved international climate finance both the preparedness and the ability to deal with disasters caused by extreme weather events could be improved. Also, more money could have been allocated to develop ways to make the agricultural systems more climate resilient.
If this is on the adaptation side, the impact of improved climate finance would have been higher in the manufacturing sector. Money and improved technologies can help with mitigation through decarbonisation in the manufacturing sector – moving from fossil fuel-based energy generation to increasing the energy efficiency of production processes. More funds for sequestration could have in turn improved afforestation and greening efforts.
Look in to look out
Now that the result from the Baku COP has convincingly shown that India is unlikely to get any significant additional financial support for its mitigation and adaptation, the need to rely on domestic financial, human and intellectual capital has come into sharp focus. The country has done it in the past – the Green Revolution and the White Revolution gave food and milk self-sufficiency to Indians. The year 2024 marks the milestone that indicates that there is a need to do it again.
In an interview to Mongabay India, eminent environmental economist Sir Partha Dasgupta had said that the fallacy that is driving global efforts to deal with climate change is that the answer can be found within the boundaries of the dominant economic model since the Second World War. This model believes that by replacing one element of the model – fossil fuel with renewable energy – the answer can be found for climate change. The problem with this belief is that while there are efforts to transition from fossil fuels to non-fossil fuels, all the other services that nature provides, for instance, decomposition of waste, soil regeneration and water cleansing, as what Sir Partha had articulated, gets neglected.
The fundamental shift should be to find the value of the ecosystem services and stability that biological diversity, so that they are conserved in situ rather than replaced. Four of the global biodiversity hotspots are in India.
Even while it is good to argue for an increased “emissions space” in international negotiations (since India came to the party late, and its right to development cannot be denied), domestically it will be good to start doing a rethink on the present-day economic models. There is an economic value to conservation. There is hope too, from our traditional knowledge and our penchant for innovation.
Banner image: With COP results showing limited financial support for India’s climate efforts, the focus has shifted to leveraging domestic financial, human, and intellectual resources. Image by Narayana Swamy Subbaraman/Mongabay.
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