Will the finance COP deliver?

Just a few days left before the annual climate summit ends. Delegates from nearly 200 countries has gathered at Baku, Azerbaijan this year to secure new climate finance for global action. Thus far, a global carbon market framework was green lit on the first day of the summit. [1] This will drive climate action by increasing carbon credit demand and ensuring the international carbon market's integrity under UN oversight.

Baku Stadium, where delegates will gather for COP29 (Image source: COP29)

COP29 got off on a rocky start. In a similar scandal to last year, the chief executive of COP29 was recorded apparently attempting to promote fossil fuel deals.[2] Many world leaders from key countries representing the largest economies and polluters have also opted to miss the climate summit.[3]

For the ‘finance COP’, the biggest hurdle will be to agree on new annual climate financing to support vulnerable countries on climate resilience, otherwise known as the New Collective Quantified Goal. The new funding goal is intended to replace the existing US$100 billion target, addressing financing gaps and improving accountability and transparency.[4]

There is a major funding gap just for adaptation measures (Image source: UNEP)

There are calls for significantly larger funding, raising figure to US$1.3 trillion per year;[5]getting wealthy nations to open their purse strings however have proven difficult.[6] Some countries have called for redirecting profits from fossil fuel companies towards climate action.[7] Another point of contention is whether emerging countries like China and India should be obligated to contribute—even when they already do so voluntarily.[8]

Further complicating matters is Trump’s re-election victory in the US. Trump, who previously withdrew the country from the Paris Agreement, has vowed to do so again for his second term.[9]The loss of contribution from the largest historical greenhouse gas producer will likely throw global negotiations into a limbo once more.

Twenty former leaders and climate experts, including former UNFCCC Executive Secretary Christiana Figueres and former UN Secretary General Ban Ki-Moon, have warned that the COP is no longer fit for purpose.[10]In an open letter published on Friday, they said the current COP process is not able to deliver change at the speed and scale needed to tackle climate change.

COP29 is not just one of the most difficult negotiations since the Paris Agreement; it is taking place amidst warning that 2024 will be the warmest year on record and also the first year to breach 1.5°C of global warming.[11] Even at current levels, climate change is destroying the livelihoods of millions and causing hundreds of billions of dollars through sea level rise, extreme weather, and more.[12]

Whether the delegates are able to reach a consensus and secure a strong climate finance deal by the end of this climate summit will be a true test of their skills and a sign if COP is in dire need of reform.