After two weeks of intense negotiations, the United Nations’s COP29 climate change summit concluded in Baku, Azerbaijan, with a commitment from developed countries to increase the funding they provide developing countries to reduce their greenhouse gas emissions and adapt to the effects of the climate crisis.
The deal reached on Sunday, two days after the conference’s scheduled closure on Friday, ensures USD 300 billion a year in climate finance by 2035, tripling the previous USD 100 billion target set in 2009 – and only met in 2022. It also calls on countries to work toward unlocking a total of USD 1.3 trillion a year from “all public and private sources” by 2035.
Developed countries will have to “take the lead” in delivering the USD 300 billion but the target, known as the New Collective Quantified Goal (NCQG), will include finance from international institutions such as the World Bank. The agreement also encourages developing nations such as China to make voluntary contributions “through South-South cooperation”.
However, the deal has been met with huge disappointment from developing countries and campaigners, who had been calling for firmer commitments, including as much as USD 1.3 trillion directly from developed nations.
“I regret to say that this document is nothing more than an optical illusion,” Indian delegation representative Chandni Raina said at the closing plenary after the finance target was approved. “This, in our opinion, will not address the enormity of the challenge we all face. Therefore, we oppose the adoption of this document.”
In their final hours, the climate talks in Baku were on the brink of collapsing, with two negotiating blocs – the Least Developed Countries (LDC) and Alliance of Small Island States (AOSIS) – temporarily walking out of negotiations. Consensus was finally reached after the initial proposal of USD 250 billion was increased.
UN Secretary General Antonio Guterres said in a statement that he had “hoped for a more ambitious outcome” but that it “provides a base on which to build”.
German foreign minister Annalena Baerbock echoed Guterres and said the USD 300 billion “won’t meet all the needs” and that they will work to reach the USD 1.3 trillion figure. “Nobody forgot about our historic responsibilities,” she added.
Developed countries are dealing with economic and political constraints, from limited budgets to rising populist movements opposed to climate action, and this was seen as influencing the COP. “We live in times where multilateralism seems impossible,” Baerbock said. The election of Donald Trump as president of the United States during the COP talks also raised doubts over whether the US would contribute to the finance target, given his withdrawal of the country from the Paris Agreement during his previous term and continued posturing against climate action.
The promised funding falls short of the USD 5 trillion to USD 6.8 trillion total that developing countries will reportedly need by 2030 to implement their climate plans. Countries have also asked for climate finance to come in the form of grants as loans contribute to increasing their debt burdens. While the agreement recognises the need for public, grant-based funds, it does not require a commitment.
“This has been the most horrendous climate negotiation in years due to the bad faith of developed countries,” said Tasneem Essop, Executive Director of Climate Action Network (CAN), in a concluding statement after the final plenary. “This was meant to be ‘the finance COP’, but the Global North turned up with a plan to betray the Global South.”
Fossil fuels and carbon markets
As well as finance, another major point of contention during the summit was how to boost efforts in the global energy transition. At last year’s COP28, countries agreed to transition away from the use of fossil fuels in their energy systems and to triple renewables. However, in Baku, they could not decide on how progress the pledge, with discussions pushed to next year.
No mention to fossil fuels or to the decision from COP28 was made in the text of the Mitigation Work Program – a non-binding process to enhance climate action – and in the text of the NCQG. Previous drafts had included proposals to expand energy storage to 1,500 gigawatts by 2030 and to expand power grids by 25 million kilometres by 2030.
Oil-rich countries must see that their efforts to delay the inevitable will failMary Robinson, former president of Ireland
Negotiators from Saudi Arabia told the plenary that they “would not accept any text that targets any specific sectors including fossil fuels”. A Saudi delegate even tried to alter one text without consultation, The Guardian reported. US climate advisor John Podesta described attempts to encourage Saudi ambition in this regard through negotiations as “a challenge”.
Campaigners and prominent voices at the summit were critical of this stalling over commitments to end fossil fuel use. “Oil-rich countries must see that their efforts to delay the inevitable will fail. The green energy transition has gained unstoppable momentum,” said Mary Robinson, former president of Ireland and chair of The Elders group. Tracy Carty, Climate Politics Expert at Greenpeace International, said the fossil industry “has been spared any responsibility to pay.”
COP29 also saw countries also reach a deal on carbon markets, which may eventually lead to country-to-country carbon trading and the creation of a regulated global market. Proponents describe carbon trading as a necessary tool in attempts to avoid global warming of over 1.5C, while critics argue these schemes do not actually contribute to cutting emissions.
The mechanism had been formally included in the 2015 Paris Agreement, but its implementation has been the subject of a protracted debate at COPs in the years since. Now, countries and companies will be authorised to trade credits that represent one tonne of CO2 saved or removed from the atmosphere, with details still to be finished in 2025.
“The UN has given its stamp of approval to fraudulent and failed carbon markets. We have seen the impacts of these schemes: land grabs, and violations of Indigenous peoples and human rights,” said Kirtana Chandrasekaran, a campaigner at Friends of the Earth International. “The supposed ‘COP of climate finance’ has turned into the ‘COP of false solutions’”.
China’s climate finance
China’s contributions and responsibilities towards the NCQG came under scrutiny at COP29 as delegates navigated fraught discussions on climate finance.
On the second day of the summit, Chinese Vice Premier Ding Xuexiang highlighted that since 2016, China has provided and mobilised over CNY 177 billion (approximately USD 24.5 billion) in project funding to support other developing countries in addressing climate change.
However, calls for China to shoulder greater financial responsibility have grown louder. Several delegates argued that classifications dating back to 1992, which label China as a developing nation, are outdated. New analysis by Carbon Brief estimated that China’s historical emissions have caused more warming than the combined emissions of the 27-member European Union, further fuelling arguments that China should contribute more as a global economic powerhouse.
China has resisted these pressures. Zhao Yingmin, head of the Chinese delegation, told the media that it is neither legal nor reasonable for some countries to refuse to recognise that China is a developing country, and that this undermines the mutual trust and cooperation between the contracting parties.
He sought to emphasise that all negotiations must follow the terms of the Paris Agreement, which imposes financial obligations only on developed country parties, but encourages other parties to provide support voluntarily: “China’s South-South cooperation is voluntary, contrasting with the mandatory obligations of developed nations.”
Li Shuo, director of the China Climate Hub at the Asia Society Policy Institute, warned that pushing China to contribute to climate finance on the same basis as developed nations could be counterproductive. “That would risk harming trust and reinforcing divisions,” he said, advocating for a focus on unity and pragmatic collaboration instead.
Meanwhile, the apparent absence of US leadership in climate action has left a significant gap, which China’s climate envoy Liu Zhenmin described as “irreplaceable”. He suggested that the European Union could partially step into this role and take the lead in leading developed countries to make financial commitments, but that multilateral mechanisms remain the core of addressing the climate crisis for the next four years. The prospect of joint leadership between China and the EU is “optimistic but challenging to achieve”, he said.
Latin America at COP29
True to previous form, Latin America did not appear to be unified on its priorities at COP29.
For Paraguay, Argentina, Uruguay and Brazil, the role of agriculture was high on the agenda, with delegates dismissing the sector’s carbon footprint and questioning trade measures such as anti-deforestation regulations, particularly from the European Union. “We reduced the emissions of cattle, showing sustainability and productivity are compatible,” claimed Uruguay’s environment minister Robert Bouvier.
Meanwhile, for Colombia, the energy transition and the debt crisis of developing countries were the priority issues. Its environment minister, Susana Muhamad, stayed for the full two weeks of the summit. “Countries agreed to work on how to get to USD 1.3 trillion, including instruments such as global taxes. These could help countries with high levels of debt to raise capital to do an energy transition,” Muhamad said.
The outcome of the NCQG was largely questioned by leaders from the region. Diego Pacheco, Bolivia’s leading delegate, said developed countries “pressure developing countries for more ambition while they expand fossil fuels plans”. Instead of climate finance, he said developed countries give “illusions, smoke and mirrors”, describing the new finance target as “an insult” to the developing world.
Panama’s special representative for climate change, Juan Carlos Monterrey Gómez struck a similar tone: “I think the 1.5C [global warming target] was at the intensive care unit, and it feels like that bed just broke and it fell on the floor. So, we’re probably not going to be able to reach 1.5C based on this very low level of finance being provided.”
The road to COP30 in Brazil
With a finance target agreed – albeit contentiously – countries will face the task of increasing their climate ambition next year with the presentation of their new climate change plans, or Nationally Determined Contributions (NDCs). These are expected to be ready before the next climate summit, COP30, to be hosted by Brazil in November 2025, in the Amazon city of Belém.
The world is currently on track for 3.1C of global warming by the end of the century based on countries’ current pledges, according to the UN Emissions Gap Report, while scientists are “virtually certain” that this year will be the hottest on record. This happens as countries deal with escalating climate impacts, including floods, droughts and heat waves.
So far, the United Arab Emirates, Switzerland and Brazil have presented their new NDCs. Other countries have announced emission reduction targets, such as the United Kingdom, but not yet their NDC.
Ilan Zugman, director for Latin America and the Caribbean at 350.org, said the fact that Brazil will take over the presidency of COP gives the world a chance to change its course. “Brazil has to show climate leadership, asking countries to present ambitious climate targets that leads to a just energy transition,” he added.
Closing the plenary, Marina Silva, Brazil’s environment minister and a candidate to be the next COP president, said it was necessary to keep working to achieve a finance deal to align with 1.5C. “At COP30, our objective will be to do what is needed to keep 1.5C in reach,” she said, adding that COP29 was “a difficult experience” and called on countries for solidarity.
