As the UN COP29 climate finance conference approaches, rich nations will face immense pressure to increase climate finance contributions to help developing countries combat global warming. Running from November 11-22 in Baku, the summit is expected to highlight deep disagreements over how much money is needed, who should pay, and what expenses should be covered.
What is Climate Finance?
Though there is no single agreed-upon definition, climate finance generally refers to funding allocated to initiatives aimed at reducing greenhouse gas emissions and adapting to climate change. This could include investments in renewable energy, such as solar or wind, or infrastructure like sea walls to protect against rising seas. However, the scope of what qualifies as climate finance remains contentious, with ongoing debates over whether initiatives like water-efficient hotels should be considered.
At COP29, nearly 200 nations will seek to establish a new finance goal beyond 2025, continuing discussions from previous climate summits. India has called for $1 trillion per year, while estimates suggest developing nations may need as much as $2.4 trillion annually by 2030.
Who Should Pay?
According to a 1992 UN accord, wealthy nations responsible for the bulk of historic emissions were obligated to provide financial assistance. In 2009, countries including the US, EU, Japan, and Canada pledged to deliver $100 billion per year by 2020. However, this goal was only met in 2022, eroding trust between developed and developing countries.
With a new target now on the table, some wealthy nations argue that major polluters like China and the Gulf states should contribute as well. China, the world’s largest emitter today, does not accept this proposal, further complicating negotiations.
The Road Ahead
As the world looks to COP29, activists and environmental organizations are pushing for clear, grant-based climate finance to address the urgent needs of developing countries. Some advocate for $1 trillion per year, split across three categories: $300 billion for emissions reductions, $300 billion for adaptation, and $400 billion for disaster relief.
Finding the necessary funds remains a major challenge. Options include redirecting fossil fuel subsidies toward clean energy, introducing global taxes on aviation or shipping, and wiping out the debts of poorer nations in exchange for climate investments. COP29 host Azerbaijan has also called on fossil fuel producers to contribute to a new climate fund.
Whatever the final agreement, the stakes at COP29 are higher than ever, with billions of dollars and the future of climate resilience hanging in the balance.