The 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP29) took place from November 11 to 24, 2024, in Baku, Azerbaijan, marking a significant event in the global fight against climate change. However, despite substantial financial commitments, COP29 ended in division and controversy between developed and developing countries. While the financial pledges were seen as an important step forward, they failed to fully meet the expectations of nations facing the impacts of climate change, raising major questions about the feasibility and fairness of these global solutions.
Financial Commitments at COP29: At COP29, the climate finance agreement was reached with a commitment to provide $300 billion annually to developing countries to support them in reducing emissions and adapting to the impacts of climate change. Although this financial commitment was notable, many countries, particularly developing nations, viewed it as insufficient. Financial commitments are a key element in climate negotiations, as wealthy nations bear the responsibility of supporting poorer countries in the fight against climate change, a challenge that they largely do not have to face.
A representative from India, Ms. Chandni Raina, criticized the agreement as "insufficient" and claimed it failed to address urgent climate challenges. Ms. Raina even suggested that the approval process did not adhere to the proper consensus procedure under the United Nations Framework Convention on Climate Change (UNFCCC). Delegates from small and less-developed countries also expressed their disappointment, stating that the agreement broke the optimism built over three years of negotiations and eroded trust in the UN climate negotiation process.
Response from Developed Countries:
Developed nations argued that the $300 billion per year commitment is a significant step forward from the previous pledge of $100 billion. They maintained that, given the current political context, this was the most feasible amount that developed countries could commit to. However, they also acknowledged that further efforts are required to mobilize resources to reach the long-term target of $1.3 trillion, an amount they believe is necessary to truly address global challenges.
Despite the financial commitments being agreed upon, the division between developed and developing countries over the fairness of the agreement remains clear. Developed nations, such as the US, Europe, and Japan, countered that excessive financial demands could strain the global economy, which is already facing multiple challenges. This has led to disagreements on how to tackle climate finance, exacerbating feelings of injustice and division.
In Mobilizing Private Financial Capital:
One of the key issues raised at COP29 was unlocking the flow of private financial capital, particularly between developed and developing nations. France's ambassador to the Organization for Economic Co-operation and Development (OECD), Ms. Amélie de Montchalin, stated at the ISCFS-2024 conference that the world needs to invest $1 trillion annually into emerging and developing economies (EMDEs) from developed countries (AEs) by 2030, compared to the current $150 billion. This goal represents just 1% of global financial assets, a relatively small proportion but one that remains very difficult to achieve in the current context.
Ms. Amélie also pointed out that European investors allocate only 2.2% of their portfolios to emerging and developing economies, a figure that highlights a lack of interest and investment in the regions most severely impacted by climate change. The lack of investment in these economies is not just a financial issue but a global fairness issue. She suggested that multilateral development banks should become partners in private finance to promote sustainable energy markets in developing nations.
Outcome and Importance of the Agreement:
Although the financial agreement reached at COP29 cannot fully address the financial demands of developing nations, its approval is considered an important step in the global effort to combat climate change. Professor Ottmar Edenhofer, a climate economist at the Potsdam Institute for Climate Impact Research, emphasized that the most important aspect of the agreement is that it was passed, avoiding a diplomatic disaster and laying the foundation for future climate negotiations.
However, much work remains to be done to achieve COP29’s long-term goals and tackle global climate issues. Developed and developing countries need to collaborate even more closely, not just in mobilizing finance but also in advancing technological and policy solutions to reduce greenhouse gas emissions and adapt to the impacts of climate change.
COP29, while making some progress on climate finance, also sparked much debate about the fairness and feasibility of financial commitments. The divide between developed and developing nations persists, especially regarding the mobilization of the necessary financial resources to address global climate challenges. Nonetheless, the approval of the financial agreement at COP29 represents a significant turning point, opening the door for future negotiations and calling for stronger international cooperation going forward. Countries, together with international financial organizations, need to continue their efforts to achieve long-term climate goals and ensure a sustainable future for future generations.
P.A.T (NASATI), theo Euronews, 11/2024