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Climate negotiators at COP29 faced a stark ultimatum on Thursday: provide substantial funding now to help poorer nations manage climate impacts, or pay an even higher price in the future.
Experts say that developing countries will need at least $1 trillion per year by the end of this decade to transition to green energy and shield communities from escalating extreme weather events.
The issue of climate finance remains at the forefront of COP29, with the summit's success likely to be measured by its ability to secure a new funding commitment from wealthy nations, development banks, and the private sector.
The previous goal of $100 billion annually, set in 2009 and intended to be met by 2020, was only reached in 2022, according to the OECD—primarily through loans rather than grants, which many recipient nations argue needs revisiting.
A report released by the Independent High-Level Expert Group on Climate Finance at the summit’s start advised that an annual target of $1.3 trillion would be necessary by 2035 to stay on track with climate goals, with greater investment required sooner to avoid significantly higher costs later.
“Any shortfall in investment before 2030 will place added pressure on the years that follow, creating a steeper and potentially more costly path to climate stability,” the report warned. "The less the world achieves now, the more we will need to invest later."
Despite behind-the-scenes negotiations, draft texts released by the United Nations climate body reflect a wide range of views, suggesting challenging negotiations ahead. Wealthy nations have shown reluctance to commit additional funding unless major economies like China agree to contribute.
Further complicating matters, U.S. support may dwindle, as President-elect Donald Trump has expressed opposition to continued climate financing, adding urgency to securing alternative funding sources.
Multilateral development banks, including the World Bank, have committed to increasing climate finance by about 60% to reach $120 billion annually by 2030, supplemented by at least $65 billion from private sources.
Meanwhile, proposals to tax high-emission industries—such as aviation, fossil fuels, and shipping—garnered attention but appear unlikely to yield an agreement this year.
Diplomatic tensions surface
The summit has also seen diplomatic rifts emerge, threatening the cooperative spirit needed for climate negotiations. French climate minister Agnès Pannier-Runacher cancelled her trip to Baku after President Ilham Aliyev of Azerbaijan accused France of "crimes" in its Caribbean territories, adding that these communities face "brutal suppression" from French authorities.
This public exchange reflects long-standing strains between France and Azerbaijan, exacerbated by France's support for Armenia, a regional adversary of Azerbaijan.
In response, European Union climate commissioner Wopke Hoekstra emphasised that COP29 should be a neutral space for climate dialogue, urging the Azerbaijani presidency to uphold an inclusive environment for all delegations.
Aliyev had previously criticized Western nations, accusing them of hypocrisy for urging climate action while continuing substantial fossil fuel consumption.
Adding to the diplomatic drama, Argentina’s delegation withdrew from the talks, according to diplomats present, though Argentina’s embassy in Baku has remained silent on the decision. Argentine President Javier Milei has controversially called global warming a "hoax," raising questions about Argentina’s stance on climate action.
Experts say that developing countries will need at least $1 trillion per year by the end of this decade to transition to green energy and shield communities from escalating extreme weather events.
The issue of climate finance remains at the forefront of COP29, with the summit's success likely to be measured by its ability to secure a new funding commitment from wealthy nations, development banks, and the private sector.
The previous goal of $100 billion annually, set in 2009 and intended to be met by 2020, was only reached in 2022, according to the OECD—primarily through loans rather than grants, which many recipient nations argue needs revisiting.
A report released by the Independent High-Level Expert Group on Climate Finance at the summit’s start advised that an annual target of $1.3 trillion would be necessary by 2035 to stay on track with climate goals, with greater investment required sooner to avoid significantly higher costs later.
“Any shortfall in investment before 2030 will place added pressure on the years that follow, creating a steeper and potentially more costly path to climate stability,” the report warned. "The less the world achieves now, the more we will need to invest later."
Despite behind-the-scenes negotiations, draft texts released by the United Nations climate body reflect a wide range of views, suggesting challenging negotiations ahead. Wealthy nations have shown reluctance to commit additional funding unless major economies like China agree to contribute.
Further complicating matters, U.S. support may dwindle, as President-elect Donald Trump has expressed opposition to continued climate financing, adding urgency to securing alternative funding sources.
Multilateral development banks, including the World Bank, have committed to increasing climate finance by about 60% to reach $120 billion annually by 2030, supplemented by at least $65 billion from private sources.
Meanwhile, proposals to tax high-emission industries—such as aviation, fossil fuels, and shipping—garnered attention but appear unlikely to yield an agreement this year.
Diplomatic tensions surface
The summit has also seen diplomatic rifts emerge, threatening the cooperative spirit needed for climate negotiations. French climate minister Agnès Pannier-Runacher cancelled her trip to Baku after President Ilham Aliyev of Azerbaijan accused France of "crimes" in its Caribbean territories, adding that these communities face "brutal suppression" from French authorities.
This public exchange reflects long-standing strains between France and Azerbaijan, exacerbated by France's support for Armenia, a regional adversary of Azerbaijan.
In response, European Union climate commissioner Wopke Hoekstra emphasised that COP29 should be a neutral space for climate dialogue, urging the Azerbaijani presidency to uphold an inclusive environment for all delegations.
Aliyev had previously criticized Western nations, accusing them of hypocrisy for urging climate action while continuing substantial fossil fuel consumption.
Adding to the diplomatic drama, Argentina’s delegation withdrew from the talks, according to diplomats present, though Argentina’s embassy in Baku has remained silent on the decision. Argentine President Javier Milei has controversially called global warming a "hoax," raising questions about Argentina’s stance on climate action.
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