The battle over finance has just started at COP29 [Global Gas Perspectives]

We have entered the second and final week of COP29, with the closing plenary session scheduled to take place on Friday, November 22. But given the status of negotiations so far, it is likely to be Saturday morning before we know whether we have a final deal.

Monday, November 19, was set for the start of negotiations under the leadership of climate and environment ministers. And sure enough, the FT reported that many ministers have started arriving in Baku “to break an impasse over a new global finance deal.” This will help get things moving. It is hoped that they will bring stronger political will to bridge divisions.

Others, including John Podesta, the US climate negotiator, flew to Brazil to galvanize support “for climate action at the G20 leaders meeting in Rio” over the next two days. Given the impasse at the end of last week, there is now concerted effort to bring the talks back on track. And the key to unlock this appears to be a successful outcome at G20. There is increasing realisation that this should not end up in outright failure, even if success is partial. 

Working round the clock

Simon Stiell, the UN climate secretary, said COP29 “is now working round the clock” and is at a stage that can benefit from G20 support. 

A coalition of business leaders sent a letter to G20 leaders calling them “to recognise the risks that climate change poses to international stability and demonstrate true leadership by delivering on the agreements reached at COP28 in Dubai.” They expressed concern about the lack of progress in Baku, calling for ambitious new Nationally Determined Commitments (NDCs), “an ambitious agreement on climate finance” and clear direction.

The FT said that “a report published during the summit from the Independent High-Level Expert Group outlined a goal to raise $1tn a year in international finance for developing markets, excluding China, by 2030,” with about half coming from the private sector. “A further $250bn would come from multilateral development banks, and the remainder from various sources, including bilateral grants,” and innovative sources of finance such as new levies on shipping and carbon markets.

President Biden said that this year the US increased its finance to $11bn annually, but it remains to be seen whether the incoming President Trump will uphold that.

Nevertheless, there is concern that there is still no clarity on climate finance, the level of finance or how it is going to be made accessible to vulnerable countries, with frustration rising as a result. That’s why G20 direction has become so important.

Progress is happening

Responding to criticism about the COP process, a COP29 negotiator said it is a process that has already delivered and “it’s better than any alternative.” There is still time for COP29 to achieve a breakthrough. A Reuters report said there is hope for such a breakthrough at the G20 meeting. They appear to be ready to agree to a text mentioning that developing nations' contributions to climate finance are voluntary, stopping short of calling them obligations. This could remove objections by China, Brazil and India, opening the way for them to make voluntary contributions, thus unlocking climate finance.

COP29 President Mukhtar Babayev said “progress on the new climate finance goal is happening, but it's complicated."

More still needs to be done

But Adaptation Fund pledges do not appear to be forthcoming, despite the recognition of the urgency of protecting people from more extreme weather and rising seas. Antonio Guterres and Simon Stiell made pleas for rich countries “to fill the huge gap in adaptation funding.” It is hoped that agreement on climate finance will unlock this. 

However, discussions on emissions-cutting and taking forward CO28’s commitment to transition away from fossil fuels have not produced results so far. Saudi Arabia and some other countries are resisting imposition of new targets or goals. So far there is no consensus. 

Simon Stiell said that progress on stopping more warming should happen both in and out of climate talks, calling the G20’s role “mission-critical.” All eyes are now on Rio. He said "the world is watching and expecting strong signals that climate action is core business for the world's biggest economies."