Climate funding divisions laid bare as COP29 deadline looms

(L to R) Canadian Ambassador for Climate Change Catherine Stewart, Jose Luis Samaniego of Mexico, U.K. climate envoy Rachel Kyte, Swiss Federal Council member Albert Roesti, Norwegian climate minister Tore Onshuus Sandvik, Juan Carlos Monterrey-Gomez, Special Representative for Climate Change and National Climate Change Director of the Ministry of Environment of Panama, and Wopke Hoekstra, European Commissioner for Climate Action, speak to the media at the COP29 summit on November 21, 2024 in Baku, Azerbaijan.
| Photo Credit: Getty Images

Division and discontent spilled into the open on Thursday at a U.N. climate summit in Baku, as a proposal for a new global finance deal offered two vastly different options that left no one happy as the closing deadline neared.

The key goal of COP29 is to agree how much money richer developed countries should provide poorer developing ones to help them fight climate change, a critical plank in efforts to limit the damage caused by rising global temperatures.

But getting a deal on the money has proved slow going at the talks in Azerbaijan’s capital, and the latest draft of the negotiating text arrived several hours behind schedule as delegates entered, in theory, the closing 48 hours.

With the summit set to wrap up on Friday, the new document showed much remains undecided on key questions, such as what counts towards the annual figure, who pays and how much.

“It is clearly unacceptable as it stands now,” said European Union climate commissioner Wopke Hoekstra.

Panama’s lead negotiator, Juan Carlos Monterrey Gómez, told Reuters, “All of this is turning into a tragic spectacle, a clown show, because when we get to the last minute, we always get a text that is just so weak.”

Developing countries need at least $1 trillion a year by the end of the decade to cope with climate change, economists told the talks last week.

Although the 10-page document was slimmed to less than half the size of the previous version by stripping out some options, it summed up the opposing positions of blocs of developed and developing nations established before the event.

One focused on ensuring the funds were grants or grant-equivalent in form, and that contributions from developing countries to each other – a nod to large potential donors such as China – were not formally part of the target.

The other, repeating the position of richer countries, aimed to broaden the types of finance that count toward the final annual goal, not just grants from developed countries, and included contributions from others.

Both options avoided stating the total funds countries would aim to invest each year, leaving the space marked with an ‘X’.

“We are far from the finish line,” said Li Shuo, a climate diplomacy expert at the Asia Society Policy Institute. “The new finance text presents two extreme ends of the aisle without much in between.”

He added, “Crucially, the text misses a number that defines the scale of future climate finance, a prerequisite for negotiation in good faith.”

That was perhaps not surprising as key donor countries, including those in the EU, have said they want more clarity on the structure and contributor base before publicly discussing how much they could chip in.

Fossil fuels

Some negotiators also said Thursday’s proposals failed to uphold a pledge made at last year’s Dubai summit to transition away from fossil fuels, hailed at the time as a landmark moment.

Human activities – mainly, the burning of fossil fuels – have helped raise the planet’s long-term average temperature by about 1.3 degrees C since pre-industrial times, driving disastrous floods, hurricanes, droughts and extreme heatwaves.

Countries seek more financing to deliver on the 2015 Paris Agreement goal of limiting the global temperature rise to well below 2 degrees C, and ideally 1.5 degrees C, by the end of the century.

Climate scientists now say the world is now likely to cross that more ambitious threshold, beyond which even more catastrophic climate impacts could occur, in the early 2030s, if not before.

Alongside finance, the future of fossil fuels is at the heart of COP29, where it has stirred disagreement from day one.

Azerbaijan President Ilham Aliyev hit out at Western critics of his country’s oil and gas industry at the opening plenary, described such resources as a gift from god.

The latest draft text of the Dubai pact referred to “transitioning away from fossil fuels in energy systems” but did not set out clear next steps.

One European negotiator told Reuters that work on mitigation, or reducing carbon emissions and curbing global warming, was “backsliding” from Dubai.

The climate finance deal document gave a clue to the future of fossil fuels, with wording on phasing out “inefficient fossil fuel subsidies … as soon as possible”.

It also urged companies to “contribute to climate action and align operations with the Paris Agreement”, through efforts such as investing in developing countries and supporting technology transfer.

“We have just two more days left. We need to really work hard to get this COP a successful COP,” Maldives Environment Minister Thoriq Ibrahim told Reuters.