The COP29 summit in Baku is coming to an end, yet a draft text containing proposed figures for climate finance and emissions reduction targets remains elusive. The main goal of COP29 is to reach consensus on how much money should be provided by developed countries to help developing countries cope with climate-induced weather disasters and transition to clean energy systems.
An earlier pledge to provide $100 billion per year expires in 2025. At the Baku summit, delegates were to decide on a 10-fold increase in financial flows to at least $1 trillion annually by 2026.
The proposed data on finance, called NCQG (New Collective Quantitative Target), will summarize collaboration on three issues – quantity, quality and contributors.
sticking point
According to developing countries including India, developed countries are pushing for higher reduction targets without financial commitment.
One of the major disagreements between developed and developing countries is over the balance between emissions reduction and climate finance. Developing countries’ argument is that without sufficient money on the table to tackle climate change they should not be forced to set stringent mitigation targets.
Developed countries are keen to expand their contributor base to include emerging economies, which developing countries have opposed as a violation of the 2015 Paris Agreement.
Developing countries, including India and China, have repeatedly demanded $1.3 trillion from the national budgets of rich developed countries. He says the money is a legal obligation under the Paris Agreement, not a donation.
The $1.3 trillion amount is based on cost estimates for the development and deployment of technology by the Independent High-level Expert Group on Climate Finance, a new body appointed by the United Nations, to limit global temperature rise to 2 °C (3.6 °F). Will keep it down. ), compared to the pre-industrial average.
The source of the hundreds of billions, if not trillions, of funds that developing countries say they need to adapt to a rapidly changing climate is also a matter of dispute. Whether the money will come from governments, multilateral banks or the private sector has become an issue at the summit.
Developed countries have so far remained silent on the amount, but have been vocal in supporting a multi-layered approach to financing climate action, including support from public and private funds.
Struggle over source of funding
Developing countries, particularly those facing debt crises, have called for prioritizing public finance over private finance, raising concerns about the reach and adequacy of market-based mechanisms.
Until now, a large part of past climate financing has been in the form of high interest loans, where the recipient country has to pay interest on the principal amount. This type of funding places a burden on the financial health of the recipients, who are mostly least developed countries.
At COP29, the least developed countries, particularly from Africa, highlighted their vulnerabilities to climate-induced disasters such as drought, food shortages, water scarcity and displacement, and the challenges their countries face year after year. Highlighting the high costs being paid. ,
This year, representatives of developing and least developed countries have expressed apprehension about relying on market-based funding to address their climate challenges. They also stressed the need for clear and transparent mechanisms that can track and account for the flow of climate finance.
Diego Pacheco, representative of Bolivia, speaking on behalf of like-minded developing countries, said developed countries are trying to shift their responsibilities onto developing countries, which is a violation of the Paris Agreement and is not acceptable. India and China are part of this group.
What is the concern of developed countries?
Also complicating the talks are demands by developed countries to include China and Saudi Arabia in their group, which would make donor countries liable for financial contributions. Developed countries are angry with China being categorized as a developing country.
After the election victory of Donald Trump in America, the question of financing has become even more complicated. The world’s largest economy and biggest emitter in history is expected to withdraw from the Paris Agreement when Trump takes office, meaning the country would default on any financial commitments set out in the final agreement. This will have a huge impact on climate financing.
solution to the problem
With little progress in the first week of COP29, the Azerbaijani President gave responsibility to some ministers from developed and developing countries to take the negotiations forward. Egypt and Australia were asked to discuss the structure, contributors and overall “volume” of the new finance target.
Ministers from Norway and South Africa were tasked with drawing up results on emissions reduction targets. These two factors – the basic formulation of the reduction plan (how countries will make climate commitments to meet the Paris Agreement goals) and the new finance target – are the main reasons for the near collapse of the talks in Baku.
The only significant achievement so far has been the inclusion of tourism in the action agenda of the UN Climate Change Conference, with more than 50 governments supporting the COP29 declaration. It aims to support the tourism sector, a key economic driver, in adopting sustainable practices to reduce environmental impact.
