Baku, Azerbaijan: With rich nations evading their responsibility of paying poor countries for climate action, the 29th United Nations Conference of Parties (COP29) at Azerbaijan’s Baku seems to be heading towards a disappointing outcome.
On the final day of the conference, developed countries have pushed for a decision to adopt a meagre $250 billion as an annual climate finance target to be paid to developing countries starting 2035, a number developing countries had earlier termed a “joke”.
Developing countries, including India, had called for a total of $1.3 trillion to be mobilised annually by developed countries towards developing countries in the form of grants (and grants equivalent) starting from next year.
But the latest draft decision text that is supposed to be finalised by Friday (November 22) consists of a heavily watered down target for developed nations.
The draft is under negotiation and countries are debating on it.
Around 195 countries are currently negotiating at Baku a finance deal termed the New Collective Quantified Goal on Climate Finance (NCQG), among other things.
They are deciding the quantum and the nature of funds that developed countries – who caused almost all historical carbon emissions – must pay to the developing world – which polluted little but faces the worst effects of climate change – as part of their commitment under the Paris Agreement.
According to the draft decision, the developed countries would “take lead” in mobilising only $250 billion per year, that too by the year 2035. All of these funds will not be in the form of grants but will come from a wide variety of sources – “public and private, bilateral and multilateral, including alternative sources” and “multilateral development banks”.
Experts say the text legitimises developed nations’ loans to developing countries as climate finance, which leads to the further indebtedness of poorer nations, who have had to borrow large amounts for their development needs, and is against the spirit of the Paris Agreement.
One of the main asks by developing countries is that climate finance funds be provided not as loans but as grants, as these do not put pressure on them to pay the money back.
The Paris Agreement, which was adopted by many countries in 2015, states that “developed country Parties shall provide financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation of their existing obligations under the Convention.”
While both the Paris Agreement as well as the United Nations Framework Convention on Climate Change clearly state that developed countries must pay up to developing countries to help them meet climate goals, the latest text in COP29 broadens the base of donors towards climate finance – which means that some developing countries may also have to pitch in to the fund.
The draft decision does mention the target of mobilising $1.3 trillion per year by 2035, but says it will be mobilised by “all actors”. This would mean that contribution to the $1.3 trillion fund would come not only from developed countries alone, but also from other sources, including private finance and from developing countries.
Rich nations had argued that developing countries “with the economic capacity to contribute” must contribute to climate finance. Climate experts say that this could mean that countries like China, Saudi Arabia and even India may have to contribute.
“The latest text changes the goal posts as it calls on all countries developed and developing to contribute towards climate finance. It offers no core amount, which is necessary not just to fight climate change, but to deliver on the legal obligations of the developed world. Setting a trend of acting in bad faith and cornering developing nations is dangerous. Watering down ambition on all fronts is a setback to the process itself, but also to what multilateralism can yield,” said Aarti Khosla, director of Climate Trends.
Harjeet Singh, climate activist and global engagement director of the Fossil Fuel Non-Proliferation Treaty Initiative, said: “It is a disgrace that despite full awareness of the devastating climate crises afflicting developing nations and the staggering costs of climate action – amounting to trillions – developed nations have only proposed a meagre $250 billion per year.”
He added: “To add insult to injury, this paltry sum includes loans and lacks the crucial commitment to grant-based finance, which is essential for developing nations to both address climate impacts and transition away from fossil fuels.
“The trust has been shattered; developing countries must stand firm. Rejecting this is a stand for dignity – no deal is better than a bad deal, especially when it disrespects those bearing the brunt of a crisis they did not create.”
What happened earlier
Consultations on the new climate finance goal have been going on since 2022, with developing countries fighting the same battle as developed countries continue to evade their responsibility to provide finance. The meetings that took place through 2023 and early 2024 aimed to bring countries together to decide a new climate finance goal and take steps to not repeat mistakes made with the previous goal.
The issues that were brought up repeatedly include the absence of a definition for climate finance and a standard method to measure it, developing countries’ demands for grants and additional finance, and developed countries’ demands to include larger developing countries in contributing to the goal, among other issues.
According to the Paris Agreement, developed countries were required to “mobilise” $100 billion per year by 2020. Developing countries have also asserted at Baku that this target has not been met and pushed for COP29 to adopt a decision that developed countries must pay their due arrears by the end of next year, and that the progress on such payments must be monitored by a third party.
In deep contrast, however, developed countries had earlier pushed for a decision that said the target for mobilising $100 billion per year was “met and exceeded in 2022, reaching $115.9 billion”.
Developed countries make this claim based on a report by the Organization for Economic Cooperation and Development (OECD). The OECD’s members belong predominantly to the Global North and account for three-fifths of world GDP, three-quarters of world trade, over 90% of global official development assistance, and half of the world’s energy consumption.
However, several other independent organisations including Oxfam have stated that the goal is far from being achieved.
On Friday, several developed country representatives, including the EU, the US, Australia and New Zealand, demanded that developing countries make higher emission cuts and complained that the negotiation text was weak on mitigation measures, which deals with countries having to cut down emissions.
The Indian government in its intervention at the meeting said that the focus of COP29 was on deciding the NCQG but that an attempt was being made by some parties towards the end of the COP to shift the focus to mitigation.
“We cannot accept any attempts to deflect the focus again from finance to repeated emphasis on mitigation. This attempt [by the developed countries] is primarily a shift in focus from their own responsibilities of providing finance,” the Indian representative said at the meeting.
“We have waited 32 years for action, and here we are, stuck again,” said the representative from Panama at the “single-setting” meeting or “Qurultay” that was held by COP29 President Azerbaijan on Thursday. He termed it “quite evil” that developing countries are being denied the finance to combat climate change.
Bolivia, speaking on behalf of a large group of developing countries called Like Minded Developing Countries that also includes India, said: “At COP29, developed countries continue trying to impose [upon] developing countries a prescriptive and intrusive mitigation approach with absolutely no finance, in flagrant opposition to the facilitative nature of the Paris Agreement and avoiding their clear legal obligations to provide financial support to developing countries.
“It is really shocking to hear that the obvious developed country option in the NCQG is now rejected, attempting now to move from zero to minus zero. They want the goal of ‘a crab walking backwards’. This is not even a joke, it is an offence to demands of the Global South.”
They added: “Despite their wealth and advanced technology, they set themselves climate goals for 2050, while demanding that resource-strapped developing countries achieve near-impossible targets earlier and even by 2030. This hypocrisy, disguised as leadership, is a blatant violation of climate justice and equity.”
Kumar Sambhav is founding director at Land Conflict Watch and Mrinali is the climate change research lead at Land Conflict Watch, an independent network of researchers studying land conflicts, climate change and natural resource governance in India.