The Baku deal

COP29 was held in Baku, comprising negotiations that continued for two weeks. The event was termed the ‘Finance Summit’, as major decisions regarding the New Collective Quantified Goal on Climate Finance (NCQG) were anticipated.

However, the summit concluded with the announcement of a finance deal, promising $300 billion annually in climate finance for developing nations starting in 2035. This represents an increase from the current $100 billion annual commitment. The funds are intended to support emissions reduction and adaptation efforts in developing countries.

While developed nations are expected to contribute most of the amount, developing nations may also donate voluntarily. The climate finance target will be achieved collectively by governments, civil society, and private businesses.

The deal also includes a provision to “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." Despite this, the Baku finance deal has faced significant criticism from the developing world, with some labelling it as a "mere disappointment" and others calling it a "joke”.

There are several reasons for the dissatisfaction of developing nations regarding the Baku finance deal. One primary concern is that the impacts of climate change are intensifying daily, manifesting in the form of floods, glacier melting, droughts, and rising sea levels. The urgency of the crisis demands immediate and robust action, yet the financial commitment announced at COP29 falls short of addressing the scale of the challenge.

According to the World Meteorological Department, there is an 80 per cent likelihood that the annual global temperature will temporarily exceed 1.5 C above pre-industrial levels in at least one of the next five years. Similarly, the United Nations Conference on Trade and Development (UNCTAD) has projected that developing countries will need approximately $1.1 trillion annually in climate finance by 2025, increasing to $1.8 trillion by 2030. Given these staggering figures, the announcement of $300 billion annually by 2035 is insufficient to effectively combat climate change.

Another point of contention is the extended timeline associated with the deal. The ‘by 2035’ provision reflects a lack of urgency and fails to establish a concrete, immediate target. This implies that the relatively modest amount of $300 billion will not be mobilised immediately, giving developed nations ample time to delay their contributions. Such flexibility raises doubts about the seriousness of the commitment and provides opportunities for developed nations to miss their targets without facing significant repercussions.

A significant factor fueling scepticism is the track record of developed nations in meeting their past climate finance commitments. As Simon Stiell, executive secretary of UN Climate Change, aptly stated, "This new finance goal is an insurance policy for humanity, amid worsening climate impacts hitting every country. But like any insurance policy – it only works if premiums are paid in full, and on time. Promises must be kept to protect billions of lives."

Unfortunately, the history of climate finance commitments does not inspire confidence. For instance, the Green Climate Fund, which aims to mobilise $100 billion annually, has only secured $12.8 billion for the upcoming year, according to its 2023 annual report. Similarly, while the establishment of the Loss and Damage Fund (L&D) was a significant outcome of the previous COP, its effective functionality remains unrealized due to a lack of substantive progress at COP29. Given this history, the new target of $300 billion casts further doubts on the intentions and commitment of developed nations to follow through on their promises.

The absence of enforcement mechanisms within the Baku finance deal is another critical shortcoming. Without clear punitive measures to ensure compliance or a well-defined roadmap for achieving the targets, the deal lacks the accountability necessary to guarantee its success. The absence of any carrot-and-stick approach undermines the potential of the deal to create deterrence among developed nations and ensures that progress remains voluntary rather than obligatory. This lack of enforcement raises legitimate concerns about whether the targets will be met by 2035.

The anticipated submission of updated Nationally Determined Contributions (NDCs) next year highlights another challenge. Without a strong commitment from developed nations to provide significant funding, the ability of developing nations to achieve their NDC targets will be severely hampered. This undermines the overall objectives of the Paris Agreement and jeopardizes global efforts to combat climate change.

Despite these significant shortcomings, some progress was made at COP29. Notable advancements were achieved in carbon markets under Article 6 of the Paris Agreement, with countries agreeing to centralized carbon markets. This development is expected to provide developing nations with greater access to financial resources and capacity-building opportunities. However, the long-term effectiveness of this mechanism remains to be seen.

Another positive development was the submission of the first Biennial Transparency Reports (BTR) under the Enhanced Transparency Framework (ETF) by 13 Parties, signalling progress in transparency and accountability. It is hoped that other parties will follow this example to expedite the implementation of climate goals.

Discussions at COP29 also focused on National Adaptation Plans (NAP), reviewing progress, identifying challenges, and exploring support programmes for developing countries. The summit also provided a platform to address the intersection of gender and climate change, resulting in the extension of the Lima Work Programme on Gender and Climate Change. Civil society representatives, youth advocates, and other stakeholders also participated, raising their voices for climate justice and emphasising the urgency of global action.

While COP29 offered a platform for dialogue and incremental progress, the outcomes fell short of meeting the expectations of developing nations and addressing the gravity of the climate crisis. The financial commitments announced, though a step forward, lack the immediacy, accountability, and ambition necessary to confront the escalating challenges posed by climate change.

The disappointment expressed by the developing world underscores the need for greater urgency, transparency, and collective responsibility in global climate action. Without meaningful and timely contributions from developed nations, the gap between ambition and reality in the fight against climate change will continue to widen.

The writer is a graduate of the University of Oxford in Public Policy. She tweets/posts @zilehumma_1 and can be reached at: zilehuma_1@hotmail.com