The COP29 climate summit in Azerbaijan ended in disappointment. The central task of the talks – to establish a new climate finance goal to replace the pledge of $100 billion annually from wealthy to poor nations – was technically achieved. But it fell far short of expectations.
Setting a new goal, known by the acronym NCQG, the New Collective Quantified Goal on Climate Finance, had already proved frustrating. Negotiators had hoped preliminary talks held throughout the year would pave the way for swifter decisions at the summit. Securing an ambitious deal was always going to be challenging. Deadlocks over the amount, timeline and financial contributors then persisted at the talks in Baku, leading some climate-vulnerable nations to walk out in protest in the final hours. After running two days over schedule, negotiators finally settled on a watered-down agreement.
The deal sets two separate goals to be met by 2035: a $300 billion annual target to replace the previous pledge of $100 billion, with developed countries taking the lead but drawing from private and public contributions. It also promises a “roadmap” to scale up finance from all actors, developed and developing countries, to $1.3 trillion annually.
If countries do not transition away, or better yet, phase out fossil fuel usage, eventually no finance in the world will be able to cover the damage they cause.
A tripling of finance flows might seem ambitious. Yet the new framework is not aligned with developing country needs and demands little extra effort from wealthy donor countries. Projections suggest that inflation and economic growth alone would have taken the value of the previous $100 billion pledge to $220 billion by 2035.
And the roadmap – at the risk of mixing metaphors – kicks the can down the road. The refinement of details was postponed to next year’s summit in Brazil. (“From Baku to Belém Roadmap to 1.3T” became the mantra, invoking the city near the mouth of the Amazon River that will host the next round of negotiations).
The 2035 deadline is also problematic. A review of progress is due in 2030, but the absence of interim targets to scale funding over time risks causing a delay to financial commitments until the final years.
Debate in Baku also focused on expanding contributors to the NCQG, to acknowledge the rising wealth and emissions of some developing nations. Ultimately, however, the formal division of the donor base of developing and developed countries was unchanged – although voluntary “South South” contributions from industrialising economies such as China will now count as climate finance flows.
Other hopes also went unfulfilled. Developing countries sought concrete actions on the quality of finance, access to funding, and financial assistance for “Loss and Damage”, but the final text only offered a vague reference to the need for increased grants and highly concessional finance, and support for the most climate-vulnerable countries.
Even many developed countries did not seem happy as the outcome at Baku did not progress last year’s landmark commitment to transition away from fossil fuels. Instead, oil-rich Saudi Arabia and its allies stubbornly refused to agree to any text referring to fossil fuels, attempting to reverse last year’s progress. Boycotting tactics and snail-paced progress throughout the talks added to the frustration. It illustrated other culprits exploiting the system of incrementalism and consensus: those currently benefiting the most from the production of oil and gas.
The Presidency of Azerbaijan, under sharp scrutiny due to its ties to the oil and gas industry, lived up to fears of weak leadership. German Foreign Minister Annalena Baerbock openly accused the Presidency of siding with the interests of major fossil fuel producers. Removing the reference to fossil fuels would be a major step backwards, considering that it took roughly 30 years to be included. But deferring the issue to next year’s talks in Brazil only costs the global community at a point where every year matters. Already the world is dangerously close to breaching the target set by the 2015 Paris Agreement to limit global warming temperature increase to 1.5°C above pre-industrial levels. If countries do not transition away, or better yet, phase out fossil fuel usage, eventually no finance in the world will be able to cover the damage they cause.
A hurried move on the summit’s opening day to approve new UN standards for carbon markets offered little solace. The deal creates a framework for countries to buy carbon credits for removing or avoiding greenhouse gases elsewhere in the world. It does resolve a long-stalled agenda item, even though the effectiveness of carbon markets remains contentious – and loopholes and serious transparency problems in the adopted rules undermine the mechanism’s credibility.
So, where next? If COP30 talks in Brazil cannot get the world back on course, the damage done in Baku to efforts to combat climate change will be compounded. It makes the choice of host for the 2026 talks even more crucial.
But the resolution of the hosting country for COP31 was not officially on the agenda this year, despite widespread support for a co-hosting arrangement between the Pacific and Australia. But Türkiye has not withdrawn its rival bid.
