COP29 delivers $1.3tn climate finance deal, ending tense talks
A New Collective Quantified Goal on Climate Finance (NCQG) was finally clinched at COP29 in the early hours of Sunday morning.
After two weeks of tense negotiations, this year’s U.N. summit COP29 delivered a deal on climate finance of $300 billion annually by 2035.
The fraught deal came two days past deadline, after significant wrangling between nations, in Azerbaijan’s capital of Baku.
It replaced a previous goal of $100 billion annually, which was contained in an earlier draft COP29 text.
The NCQG agreement will “secure efforts of all actors to work together to scale up finance to developing countries, from public and private sources, to the amount of $1.3 trillion per year by 2035,” UN Climate Change said in a press statement.
“This new finance goal is an insurance policy for humanity, amid worsening climate impacts hitting every country,” said Simon Stiell, Executive Secretary of UN Climate Change, in a closing speech.
“But like any insurance policy – it only works – if premiums are paid in full, and on time,” he cautioned. “Promises must be kept, to protect billions of lives.”
The deal builds on progress made at COP28 in Dubai last year, which delivered a global agreement to transition away from fossil fuels, the UN said.
However developing nations have criticised the $300 billion figure, saying it is both too little and too late.
Poor and vulnerable nations also say they would like more of the promised funding to come in the form of grants and other affordable financial support, arguing that market-based loans could get them further into debt.
The text avoids placing direct responsibility on developed countries, instead referring to them as being “at the forefront” of efforts, said the Observatorio do Clima in Brazil in a statement.
It also does not mandate that the financing be public — which could dilute sources and accountability — and allows part of the funding to be delivered through loan mechanisms, which threatens debt accumulation for developing nations, it added.
“The new climate finance target adopted today is a step backward compared to the previous target. Not only is the amount insufficient but the responsibility of developed countries is diluted and unlikely to be reversed in the future,” said Stela Herschmann, a policy specialist at the Observatorio.
“With the help of an incompetent presidency, developed countries have once again managed to abandon their obligations and make developing countries foot the bill. Brazil now faces yet another monumental task for COP30: securing increased funding and rebuilding trust between nations,” said Claudio Angelo, a policy coordinator at the same organisation.
Mohamed Adow, the founder and director of Power Shift Africa, told Gas Outlook that the “overall number currently on the table is effectively meaningless because it doesn’t say who should be contributing the money.”
“If it’s not clearly stated that rich countries are responsible, where will the pressure be to deliver that number? Developed countries attempted to unpick the delicate balance agreed in the Paris Agreement. They also wanted to remove any responsibility from themselves to provide climate finance and instead just have everyone make voluntary contributions to the pot. That would be to entirely rewrite the fundamental UN negotiation process and rip up previous COP agreements,” he added.
Critics also complain that the COP29 text simply reaffirms the deal reached last year on transitioning away from fossil fuels in energy systems, and that language is vague.
The text agreed in Baku calls on parties to “contribute to the global efforts” toward that landmark agreement, without explicitly naming fossil fuels.
COP29 took place at a time of rising populism, budget constraints and inflation in many richer nations.
Trump re-election
The election of Donald Trump as the next U.S. President from January — taking place just days before COP29 began — also strained progress at these talks.
Trump is reportedly preparing to withdraw from the Paris Agreement once he becomes president, threatening global climate efforts, and has appointed oil and gas industry executive Chris Wright as his energy secretary.
He is also expected to end the pause on permitting new LNG exports to Asia and Europe.
The UN’s Stiell did acknowledge that the deal reached in Baku did not meet all of the conference parties’ expectations, and said that considerably more work is still needed at COP30 in Brazil next year on several crucial issues.
“No country got everything they wanted, and we leave Baku with a mountain of work to do,” he said. “The many other issues we need to progress may not be headlines but they are lifelines for billions of people. So this is no time for victory laps, we need to set our sights and redouble our efforts on the road to Belem.”
“We still have a very long road ahead, but here in Baku we took another important step forward,” he concluded.
This year’s COP was the third in a row to be hosted by a fossil fuel producing nation, following Egypt in 2022 and the United Arab Emirates last year.