Climate finance deal continues facing deadlock as COP29 nears end

New Delhi: Talks on a dramatically raised finance deal at the COP29 meeting in Baku remained deadlocked with a draft text failing to mention the amount, even as the clock ticked away on the summit that ends on Friday.

The new draft, presented by host Azerbaijan on Thursday, defines climate finance, identifies contributors and establishes two options on the overall goal—but it fails to put a number on the amount that must come from wealthy countries to help developing nations in the fight against climate change.

Developing countries say the amount should be scaled up from the current $100 billion a year to trillions of dollars. India, for instance, has cited a figure of at least $1.3 trillion a year, much of it in grants.

The two options in the draft agreement reflect the broad division between developed and developing countris on the question of finance.

The options

One option seeks to set up a New Collective Quantified Goal (NCQG) on climate finance annually from 2025-2035 – provided by developed countries to all developing countries. This is the preferred option of developing nations.

This would support developing countries in a country-driven manner in the implementation of their National Determined Contributions (NDCs).

However, this option also invites developing nations to voluntarily contribute to the fund. Developing countries with the ability to do so, as cited in news reports, include Saudi Arabia and China. India and other developing countries are opposed to this particular clause.

The second option, which reflects the wishes of developed countries, says funding should begin by 2035, giving rich nations longer to mobilize their money, and that this should come from “all sources of finance”. 

Negotiators from 198 countries have been trying to finalize a comprehensive agreement on climate finance to enable greater funding for climate action since 11 November in Baku. 

European countries have been saying an ambitious goal can be agreed upon if they expand the base of contributors to include some of the richer developing nations, such as China and Middle Eastern oil producers, which developing nations, including India, oppose.

Clock is ticking

UN Secretary-General António Guterres on Thursday said, “I urged G20 leaders to instruct their ministers and negotiators to secure a new ambitious climate finance goal at COP29. Delegations, and the COP Presidency, are working hard to find common ground, but the clock is ticking. COP29 is now down to the wire. Areas of convergence are coming into focus, but differences remain. We need a major push to get discussions over the finishing line. Otherwise, it will inevitably make the success of COP30 in Brazil more difficult.”

Thursday’s draft left civil society unimpressed.

Sehr Raheja, programme officer, climate change at the Centre for Science and Environment (CSE): “The latest iteration of the NCQG text manages to compile some differing views, but it is worrying to see that it does not include any figure on the quantum or amount for the new goal. Developing countries have responded in unison—the text needs to have a figure on quantum, one that is reflective of the global south’s needs, and also separate a provisioned amount from the overall target (to be in the trillions).

“Despite the mixed response to the latest text from Parties, most seem determined to reach an outcome in Baku. The presidency will have to give a final strong push and bring forward an equitable and just NCQG proposition to the table – one with an overall quantum in the trillions, including specifications for concessional and grants-based finance as needed (quality of finance).

COP29 was an opportunity for the global north to course correct and restore trust on issues of climate finance. Without consensus on the NCQG, this could be considered a failure.”