The following article, written by Francesca Gugino, is part of a series of reflections on the 2024 United Nations Climate Change Conference, also known as the 29th Conference of the Parties (COP29), that took place in Baku, Azerbaijan in November 2024. The series covers different aspects of the COP negotiations from Article 6 discussions and the Global Stocktake to commitments to technology advancements. All articles in the series were initially developed for Professor Achinthi Vithanage’s Advanced International Environmental Law course at the Elisabeth Haub School of Law at Pace University.
COP29 was deemed the financial COP by many, as the core focus was climate finance and carbon markets. During the first few days at COP29, global south nations called for an increase in climate finance from the global north to reconcile climate impacts created by the industrialization of the global north and exploitation of the global south. These countries called for an increase of funds to 1.3 trillion USD to aid vulnerable countries in the wake of the climate crisis. Global South nations developed the motto “Trillions, not Billions” when referencing agreements for COP29 climate finance.
Controversy not only surrounded the amount of climate finance owed to vulnerable nations but also around which countries should contribute to these funds. The main divide existed between developed countries calling for emerging economies such as India and China to contribute heavily to climate finance while Global South countries continued to push for finance to come from historic emitters. Tensions around these discussions continued to rise as countries feared that the financial support being discussed would not be enough to address their climate needs. Concern from vulnerable countries also surrounded the focus on the type of climate finance, as these countries maintained the importance of grants over loans, as the latter would result in interest rates that may be difficult to pay.
In addition to the “call for a sixfold increase in international climate finance to $1.6 trillion by 2030”, COP29 discussions focused on four other mechanisms to direct climate finance to the Global South. Global South countries brought attention to renewable energy, global energy funding disparity, additional finance mechanisms, and investments in energy efficiency. These discussions centered upon four other key issues: (1) Global South essential to achieve global collective goal of tripling renewables by 2030, (2) Despite vast solar potential, Africa receives just 3% of global energy funding, (3) New mechanisms such as first-loss funding aim to mobilize billions for energy transitions, and (4) Solar Impulse Foundation and the European Investment Bank to provide upfront finance for SMEs to invest in energy efficiency.
Although Global South countries championed for “Trillions, not Billions”, this was not agreed upon in the final COP negotiations. Global North countries pledged $300 billion annually by 2035 to help developing countries cope with climate impacts. This was heavily criticized by Global South countries as “woefully insufficient”, as this amounts to less than a quarter of what was proposed by Global South nations. At COP29, the Indian delegation representative Chandni Raina stated: “India does not accept the goal proposal in its current form”. Raina continues by criticizing the “mere sum of $300 billion and that too to be reached only by 2035”, arguing that the goal is “too little” and “too distant”. The Indian delegation representative also highlighted that mobilization efforts would have to be undertaken by developing countries themselves, noting that historical emitters should bear a greater responsibility to finance the climate crisis. Chandni Raina goes on to state that the document is nothing more than an “optical illusion”, which fails to address the “enormity of the challenge”.
Amid uncertainty over the United States’ role in future climate talks, attention shifted to China as a potential climate leader. Although still classified as a “developing” country by the UN and not formally obligated to cut emissions or provide financial support, China agreed to voluntarily contribute to climate finance for vulnerable nations. This move is a strategic and effective step. Matt McGrath’s BBC article refers to China as the “natural successor”, highlighting China’s increasing transparency regarding financial support of the Global South and noting that China may continue to play a pivotal role in future climate finance. This is a step in the right direction to fill the gap in climate finance.
The overall outcomes from COP29, although not considered to be enough by many, moved international law in a progressive direction to mitigate and adapt to climate change. The conference’s central outcome was a new climate finance goal to triple funding for developing countries, raising it from $100 billion to $300 billion annually by 2035. This goal aims to help nations combat climate disasters and benefit from the clean energy boom.
Decision CMA 6, New collective quantified goal on climate finance, calls for the scaling up of climate finance. The estimated cost of climate needs in developing countries, as outlined in their national climate plans, is between USD 5.1–6.8 trillion by 2030, or roughly USD 455–584 billion per year, while annual funding required for adaptation efforts is between USD 215–387 billion. There is a disconnect between the available climate finance and the funding needed for adaptation. Decision CMA 6 not only recognizes the cost needs of developing country parties but also calls on actors to scale up finance flows to USD 1.3 trillion per year by 2035.
There is still much work to be done between now and COP30, but the increase in climate finance is a promising step in the right direction, even though it does not amount to what is deemed necessary by the Global South.
COP30 Recommendations
COP30 will be critical in addressing the remaining financial gaps, ensuring the fulfillment of pledges, and reinforcing mechanisms to support the most vulnerable countries. Parties should focus on enhancing financial commitments, particularly in the energy transition, prioritizing grants over loans and increasing transparency and accountability.