[ News ] Five things to know as COP29 kicks off in Azerbaijan

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Five things to know as COP29 kicks off in Azerbaijan

 

 

BAKU, Azerbaijan — Conversations about money are never easy, and they will be especially difficult at this year’s United Nations climate gathering. 

Negotiators from around the world are kicking off the two-week, high-level summit in Baku, Azerbaijan today, known as COP29, with one key goal: agree on how much rich countries should pay poorer countries to fight climate change. 

Talks leading up to the summit have been tense, as nations struggle with the powerful effects of a warming planet and continued reliance on fossil fuels amid geopolitical tensions and cash-strapped budgets. 

Failure to come to an agreement — a prospect one COP29 negotiator did not rule out due to the sensitive nature of the discussions already marred by a lack of trust — risks fracturing an already tenuous sense of unity among nations and could hamper global efforts for more ambitious emissions-cutting plans. 

We break down the five key things to know as COP29 gets underway. 

 

Show us the money

 

The success of this year’s COP hinges on whether countries can agree on a new financial assistance goal. 

In 2009, wealthy countries agreed to give $100 billion annually by 2020 to help low- and middle-income countries cut emissions, build green economies and increase resilience to climate change. Rich countries finally achieved that goal in 2022, two years late. The goal is set to expire in 2025, setting the stage for a new target. 

Expectations are hovering in the trillions of dollars, a huge jump from the previous deal, reflecting both the increasing costs of the energy transition in some regions of the world and the worsening effects of climate change.  

A major U.N.-backed report last year put climate-finance needs for developing countries, excluding China, at $2.4 trillion a year. Developing nations would need to raise about $1.4 trillion through domestic measures.  

About $1 trillion — the number analysts are eyeing — would come from international assistance, through a mix of public and private financing. Negotiators could also agree to start lower, in the hundreds of billions of dollars, and gradually increase funding.  

To put it in perspective: $1 trillion is about a fifth of what the U.S. federal government spent in fiscal year 2024; the world spent $7 trillion on fossil fuel subsidies in 2022. 

“We’re not wedded to the number of a trillion,” said Rob Moore, associate director at environmental think tank E3G, who previously led international climate finance negotiations for the British government. “What’s really important is that there’s a pathway.” 

 

Numbers only tell part of the story

 

 

Besides the topline climate finance target, experts say it’s crucial to look at how the money gets distributed. In other words, “how much” should not overshadow the “how.” 

Most of the funds awarded under the expiring goal came in the form of loans, burdening developing countries with debt and potentially limiting their ability to invest in the kinds of climate programs the money is meant to target. Low-income countries paid $59 billion to service their debts in 2022, more than twice the amount they received in climate support, according to an analysis by the International Institute for Environment and Development.

Unsurprisingly, developing countries want more funding in the form of grants, which experts say could reassure poorer countries they can see their climate ambitions through. 

A lot of attention has also focused on reforming the World Bank and other development banks so they can allocate more cash toward climate action. Experts will also be watching the Group of 20 (G20) Leaders’ Summit in Brazil, which coincides with the second week of COP29, to see what signals leaders there give on climate finance ambitions. 

While promises matter, a good monitoring system is needed to track whether rich countries follow through. Experts worry the more nuanced and complex the final finance deal is, the more difficult it will be to scrutinize the actual distribution of funds. Expect this to be another key point underpinning the talks.  

Some officials involved in COP29 negotiations have also pressed for developing countries to be transparent about how they use the money they receive, a high-level Azerbaijani official recently told Cipher. But poor administrative infrastructure and training in developing countries can make it difficult to achieve an acceptable level of accountability. 

 

 

What about China?

With pressure to contribute more money, rich countries want to see the financial burden spread more widely. Enter China. 

The list of current contributors to the climate finance pot is based on a 1992 U.N. treaty that determined which countries qualify as “developed.” The European Union and the United States argue a lot has changed since then and carbon-intensive emerging economies like China should also pay up.  

China is not keen on contributing to the collective cash pot, preferring instead to give money on its own. China mobilized about 6% of the total climate funding to developing nations between 2013 and 2022, according to the World Resources Institute.  

Expect pressure on China to be a crucial backroom negotiating topic in Baku. 

 

United States shake-up

COP29 is beginning just days after Americans voted in one of the most consequential U.S. elections in history — with major ramifications for climate action.  

The election of Donald Trump as the next U.S president is likely to loom over the talks. Trump previously pulled the U.S. out of the 2015 Paris Climate Agreement and during his campaign he vowed to do so again. He also threatened to pull the country out of the U.N. Framework Convention on Climate Change, which underpins the structure of global climate talks.   

It would take a year for a withdrawal request from the Paris Agreement to take effect and Trump won’t be sworn in until January. But his victory will reverberate into the dynamics of the COP negotiations and could have ripple effects on other countries’ future ambitions. 

 

 

Reality check 

While countries work toward a deal on climate finance, remember their promise from last year’s COP in Dubai hasn’t led to much (yet anyway).  

Amid great fanfare, international leaders made a landmark promise in 2023 to transition the world away from fossil fuels. It was seen as a breakthrough.  

But even though global clean energy use and investments are surging, only a fraction of that growth is happening in developing countries. And with electricity demand also rising quickly, fossil fuels are expected to remain dominant for years.  

Global greenhouse gas emissions, the bulk of which are carbon dioxide (CO2) emissions, rose by 1.3% in 2023, putting the world on track for 3.1 degrees Celsius of warming before the end of the century, according to a key U.N. report published in October. Carbon dioxide emissions are expected to increase by 0.6% this year. 

That stark reality is likely to be a factor even when negotiators gather again in Brazil for the next COP, in November 2025. 

 

https://www.ciphernews.com/articles/five-things-to-know-as-cop29-kicks-off-in-azerbaijan/