Countries are being urged to invest now to help poorer nations tackle climate change, rather than face even greater costs in the future. Experts have stated that developing countries will need at least $1 trillion annually by the end of the decade to transition to greener energy sources and to protect against extreme weather events. Funding is a critical focus of the COP29 climate talks taking place in Azerbaijan.
The success of the summit will likely hinge on whether nations can agree on a new target for financing climate action in developing countries, which would involve contributions from wealthier nations, development lenders, and the private sector. A previous target of $100 billion per year, which is set to expire in 2025, was only achieved in 2022, two years later than planned, according to the OECD. However, a significant portion of this funding came in the form of loans rather than grants, which recipient countries say needs to be addressed.
At the beginning of the day, the Independent High-Level Expert Group on Climate Finance released a report stating that the annual funding target must increase to $1.3 trillion by 2035, or even higher if countries delay action now. The report emphasized that any investment shortfall before 2030 will intensify funding pressures in subsequent years, resulting in a steeper and potentially more expensive path to achieving climate stability. “The less the world achieves now, the more we will need to invest later,” the report concluded. Negotiators are currently working on draft agreements, but early documents from the United Nations climate body reflect a wide range of opinions and uncertainty about the final outcomes.
A deal is expected to be hard fought, particularly since many Western governments, obligated to contribute since the Paris Agreement in 2015, are hesitant to increase their contributions unless countries like China join them. The potential withdrawal of the United States from future funding agreements under an incoming President Donald Trump is adding pressure on delegates to find alternative ways to secure necessary funding.
One proposal involves the world’s multilateral development banks, such as the World Bank, reforming their structures to increase lending. A coalition of the ten largest development banks has indicated a plan to boost their climate financing by approximately 60%, reaching $120 billion annually by 2030, along with at least an additional $65 billion from the private sector. There is also a push to generate new funds by taxing polluting industries, including aviation, fossil fuels, and shipping, or through financial transactions. More countries have expressed willingness to consider this approach, but a consensus agreement is unlikely during this summit.
After three days of discussions, the conference has already seen its share of diplomatic conflicts. French Climate Minister Agnès Pannier-Runacher canceled her trip to COP29 after Azerbaijan’s President Ilham Aliyev accused France of “crimes” in its overseas territories in the Caribbean. Aliyev claimed, “The voices of these communities are often brutally suppressed by the regimes in their metropolis.” Tensions between France and Azerbaijan have a long history, exacerbated by Paris’ support for Armenia, Azerbaijan’s rival.
In response to Aliyev’s remarks, European Union Climate Commissioner Wopke Hoekstra emphasized the need for cooperation despite bilateral disputes, stating, “The COP should be a place where all parties feel free to negotiate on climate action,” and highlighted the responsibility of the COP Presidency to facilitate this dialogue.
Moreover, Argentina’s government has withdrawn its negotiators from the COP29 talks, although the reasons for this decision remain unclear. Argentina’s embassy in Baku has not provided any comments on the matter. Notably, President Javier Milei of Argentina has previously referred to global warming as a “hoax.”
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