Slow progress in Baku risks derailing talks on new climate finance goal at COP29

At the latest climate talks in Baku, which ended on Thursday, countries made little progress towards agreeing a new climate finance goal to replace the current $100-billion-a-year target, dimming prospects for the main expected outcome from November’s COP29 summit.

Negotiators gathered in Azerbaijan this week for the last round of technical talks before COP29, after mid-year discussions in Bonn ended in stalemate on several crunch issues.

Countries have yet to define critical aspects of the new collective quantified goal (NCQG) for climate finance, including who should pay – the so-called “contributor base” – and how much money they will mobilise – known as the “quantum”.

Commenting on this week’s talks, COP29 President-Designate Mukhtar Babayev said negotiations had come “a long way” but still risk “falling short”.

“Determination and leadership is needed from all parties to bridge the gaps that still divide us in this critical final phase,” Babayev said. “Sticking to set positions and failing to move towards each other will leave too much ground to be covered at COP29,” he added.

Civil society groups belonging to Climate Action Network (CAN), an international climate justice coalition, said in a joint statement they were disappointed at what they described as a lack of preparation by delegations from rich governments.

“The failure to achieve any clear outcome also means developing countries face uncertainty as they draw up their national climate plans, known as NDCs, because their ambition is necessarily dependent upon the availability of climate finance,” the statement said.

All countries are scheduled to submit more ambitious NDCs with stronger goals to cut planet-heating emissions and adapt to climate change impacts by February next year.

Contributor controversy

During this week’s Baku talks, sharp divisions remained over who should provide finance for vulnerable countries, as developing nations rejected rich governments’ proposals to elicit contributions from high-emitting emerging economies like China and wealthy developing states in the Gulf.

On behalf of the G77 group of developing countries, India’s negotiator told the final session that developed nations must provide “affordable, accessible and adequate” climate finance to avoid repeating the problems of the $100-billion goal, which was met two years late and mostly delivered in the form of loans.

“Instead we’re being asked to change the policy environment, divert our domestic resources away from the goal and even contribute to the goal,” said the Indian negotiator. “These are huge concerns for developing countries.”

The G77 group advocated for the inclusion of loss and damage finance in the NCQG – as the previous $100-billion goal covered only adaptation and mitigation – as well as pressing for funding to be delivered through “public finance in a grants-based or concessional manner”.

Developed countries, meanwhile, held their ground and insisted that some developing nations should also pay up for the new goal, with the UK’s negotiator saying it cannot be argued the world has not changed since climate negotiations started in 1992, when the current country groupings were defined.

Global North governments also defended the role of private finance in the NCQG, with New Zealand claiming that, since trillions of dollars will be required, “we need to be speaking the same language” and “to do that we need structural transformation which can only happen by including [the] private sector”.

“Silence on finance”

Climate finance experts following the talks criticised developed countries for acting in “bad faith”, accusing them in the CAN statement of being “silent on future climate finance”.

“Just weeks before COP29 and after three years of process and engagements, we don’t even have an inkling of what developed countries will bring to the table for the NCQG,” said Liane Schalatek, associate director of the Heinrich Böll Foundation Washington.

Campaigners noted the time constraints as COP29 approaches fast, and expressed concern that ministers have been left with too many issues to resolve.

“It is shameful how developed countries have been undermining these finance negotiations. With less than two months to go until COP29, they should be scaling up their ambition and delivering their fair share of public finance through grants,” said Mariana Paoli, global advocacy lead at Christian Aid.

“If we get a weak finance outcome at COP29, it will be their fault – and devastating for communities in the Global South,” she added.