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COP29 fizzles out with a “check in the mail”: After going over time for two days, COP29 wrapped with a new collective quantified goal (NCQG) agreement that urges developed countries to “take the lead” on raising at least USD 300 bn per year by 2035 for developing countries, according to the final text (pdf).
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The agreement is a USD 50 bn increase from an earlier text draft and triples the previous climate finance target of USD 100 bn goal. The text also made a mention of the need for collaboration to scale up financing to a total of USD 1.3 tn from both private and public sources.
Key takeaways from the final text:
- The costs needs based on developing countries nationally determined contributions are estimated to be between USD 5.1 and 6.8 tn up to 2030 or between USD 455–584 bn annually and adaptation finance needs fall between USD 215–387 bn annually up to 2030;
- Calls on an increase of financing to developing countries for climate action from all public and private sources to at least USD 1.3 tn per year by 2035;
- Developing countries are ‘encouraged’ to make contributions on a “voluntary” basis;
- Launching the ‘Baku to Belem Roadmap to 1.3T’ to scale up climate finance from public and private sources to USD 1.3 tn by 2035;
- Increasing funding through different multilateral financing entities to at least triple annual outflows from funds including the Adaptation Fund, the Least Developed Countries Fund, and the Special Climate Change Fund;
- Establishing a support program for National Adaptation Plans (NAPs) and launching the Baku Adaptation Road Map to accelerate adaptation efforts and translate plans into tangible outcomes for least developed countries (LDCs) and small island developing states;
The Loss and Damage Fund will not be included in the NCQG: Despite lobbying by developing nations and climate activists to include the fund in the new finance pledge, the final agreement failed to secure the financing future of the fund. The final text, however, acknowledged that the fund needs financing in the forms of grants and public funds.
REMEMBER- The Loss and Damage Fund was fully operationalized during COP29 and is ready to accept contributions and will start financing projects by 2025.
While some are hopeful…: “This new finance goal is an ins. policy for humanity, amid worsening climate impacts hitting every country … This [agreement] will keep the clean energy boom growing and protect bns of lives,” UN climate chief Simon Stiell said. “But like any ins. policy – it only works – if the premiums are paid in full, and on time.” he added.
… Not everyone’s on board: “This, in our opinion, will not address the enormity of the challenge we all face. Therefore, we oppose the adoption of this document.” Indian delegation representative Chandni Raina said. “Rich countries have promised to ‘mobilize’ some funds in the future, rather than provide them now. The check is in the mail,” Power Shift Africa director Mohamed Adow told The Guardian. The amount accounts for less than the USD 100 bn previously pledged, taking inflation into account, a Cuban representative noted.
‘COP’s multilateralism is alive, but the 1.5 target is dead’: “We needed to leave Baku with an agreement to keep the multilateral system alive. We kept the system alive. But I think 1.5 is dead,” Panama’s special representative for climate change Juan Carlos Monterrey-Gomez said.
The goal doesn’t add up: Economists are skeptical that USD 300 bn in government funds will be sufficient to “leverage” an additional USD 1 tn from the private sector. Historically, USD 1 of public finance has only attracted an average of USD 0.22 from private investors, Semafor reports citing data from think tank ODI.
Small islands will suffer most: “I am not exaggerating when I say our islands are sinking! How can you expect us to go back to the women, men, and children of our countries with a poor [agreement] which will surely plunge them into further peril?” Alliance of Small Island States’ chair Cedric Schuster said.
No mention of fossil fuels in the final text: Transitioning away from fossil fuels — a key outcome of COP29 global stocktake — failed to make it in the final text after a bitter round of negotiations. A Saudi-led group of nations reportedly used a variety of tactics to block any new progress outlining possible actions on the pledge. Still, the agreement made a vague reference committing to the outcomes of COP29.
And polluters won’t necessarily pay: The final outcome in Baku excluded references to the Make Polluters Pay principle at the last minute, disappointing civil society and nations that advocated for its inclusion, according to Greenpeace.
ICYMI- The summit also had a breakthrough with an end to the deadlock on global carbon market rules, reaching consensus on and agreeing to “fully operationalize” Article 6.4 under the Paris Agreement. The regulated system would enable countries to meet emissions targets by trading credits bilaterally that represent one ton of CO2 reduced or removed, thus fostering faster decarbonization through international cooperation.
The new carbon credits rules have criticisms: “The flaws of Article 6 remain unfixed … Countries seem more interested in adopting weak rules and dealing with the consequences later, rather than preventing them,” Carbon Market Watch policy expert Isa Mulder told Bloomberg. “The [agreement] leaves a lot of trust in the hands of [countries], which is a problem because the rules themselves are not yet net zero [emissions] aligned,” University of Oxford research fellow Injy Johnstone told The Financial Times.
So what could COP30 look like? Brazil is optimistic about the potential impact of COP30 in Belem – a small coastal city known as the gateway to the Amazon rainforest, reports Bloomberg citing Brazil’s Secretary for Climate, Energy, and the Environment André Corrêa do Lago. But the upcoming summit is set to inherit several of the pending files that Baku’s COP failed in resolving. This will include further discussions on transitioning away from fossils, how to scale up climate finances especially for debt-burdened poorer nations, and more on safeguarding funding for the Loss and Damage Fund.
IN OTHER COP29 UPDATES-
#1- Renewables giant Masdar and China’s Silk Road Fund agreed to co-invest RMB 20 bn (USD 2.8 bn) in renewable energy projects within Belt and Road Initiative (BRI) countries under an MoU, according to a statement. The partnership focuses on emerging markets and the global south, with plans to invest in projects developed, invested in, or operated by Masdar.
#2- UAE-Azerbaijan green collaboration set to expand: Economy Minister Abdulla Bin Touq Al Marri met with his Azerbaijani counterpart Mikayil Jabbarov on the sidelines of COP29 to discuss increasing investments in the green economy transition, expanding renewable energy partnerships, and fostering joint digital initiatives, Azerbaijan’s state news agency Azertac reports. The meeting also focused on ramping up economic and trade relations and supporting both countries’ economic diversification goals.
