Bonn climate talks highlight ongoing divisions over climate finance

International climate talks held in Bonn, Germany, in preparation for COP30, ended last week with no mention of a fossil fuel phase-out, highlighting ongoing divisions among countries over who should pay to meet climate targets.

Climate finance, the implementation of the global stocktake outcomes, and the just transition work programme were the main points of contention at the meeting, which was held between June 16-26th under the United Nations Framework Convention on Climate Change (UNFCCC), Natalie Jones, policy advisor at the International Institute for Sustainable Development (IISD), told Gas Outlook.

“The dynamics have been difficult, with a two-day agenda fight over provision of climate finance (…) and unilateral trade measures delaying the start of negotiations,” she said.

At the centre of the fight was article 9.1 of the Paris Agreement on developed countries’ finance provision commitment.

Developing countries of the G77 and China coalition have been increasingly vocal that this should be read as a commitment for developed countries to directly fund climate-related investments out of their own public funds, however this has been countered by calls to include mid-income nations in the financing effort. Progress is also hampered by the U.S. withdrawal from climate negotiations under the Trump presidency.

At COP29, countries agreed a $300 billion/year by 2035 target for developed countries and a broader $1.3 trillion goal to scale up climate finance, the so-called Baku Finance Goal (BFG).

However “the Baku to Belem Roadmap to $1.3 tn consultations have revealed a large divergence in Parties’ expectations on content of the Roadmap,” she said.

“Some developing countries emphasised adaptation finance, as well as the necessity of avoiding financial instruments that increase debt in developing countries.”

“Some countries also highlighted the need to include loss and damage finance.”

“The Marshall Islands emphasised fossil fuel subsidy reform as a means to increase fiscal space for climate finance” while “developed country parties most often emphasised private finance.”

Another point of contention was that of ‘unilateral trade measures’ such as the EU’s carbon border adjustment mechanism (CBAM), which according to the Like-Minded Developing Countries group led by Bolivia directly hamper climate efforts in developing countries by restricting trade and raising the costs of climate action globally.

Meanwhile, “no progress has been made on phasing out fossil fuels in Bonn,” she said.

“Negotiations on the UAE Dialogue to implement the Global Stocktake, one of the main places where energy-related outcomes could have been included, have stalled, with Parties reiterating the same positions that led to an impasse at COP29.”

“All parties are unclear on how and where progress on fossil fuel phase out will be taken up… It is crucial that fossil fuel phase out is specifically addressed at COP30 in a negotiated outcome.”

NDCs

While “the energy transition and the Nationally Determined Contributions” which are the national strategies to achieve emission reductions “were not part of the Bonn negotiations,” some countries have already started to put forward their plans” showing progress is continuing on the sidelines, Federico Tassan-Viol, policy expert at Italy-based think tank ECCO Climate, told Gas Outlook.

One of the main objectives of COP30 in Belem, Brazil, in November, is for all countries to submit a plan.

Italy’s contribution will be part of the common European goal that the Commission is due to present on behalf of all member states.

There is hope for “ambitious European (targets)  which would provide a signal to other countries to align efforts on climate goals,” he said.

But a sense that concrete progress is lacking on climate, which emerged at COP29 in Baku, continues to linger.

“We look forward to receiving new and stronger NDCs by September and will include them in a new NDC Synthesis Report,” UN Climate Change Executive Secretary Simon Stiell said.

“This report will show how far we’ve come and how far we must still go.”

However countries need “to go further, faster, and fairer” adding parties had “struggled” working on some areas, he added.

“I’m not going to sugar coat it – we have a lot more to do before we meet again in Belém…There is so much more work to do to keep 1.5 alive, as science demands.”

“We must find a way to get to the hard decisions sooner.”

Meanwhile, there have been growing calls to reform how UN climate talks are conducted, with campaigners asking for decisions to be reached by vote rather than consensus among countries.

Activists are also calling for the upcoming COP to be shielded from interference from fossil fuel lobbies.

(Writing by Beatrice Bedeschi; editing by Sophie Davies)