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A deal of $300 billion per year to developing countries from developed countries and other sources was reached at the 29th Conference of Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) in the Azeri capital of Baku early on the morning of November 24, 2024.
The gavelling of the decision regarding the New Collective Quantified Goal (NCQG) on climate finance followed a decade of anticipation, two plus years of negotiations and technical analysis, and the past two weeks of political bargaining.
Through the final days of COP29, Parties engaged in critical negotiations on the quantum and quality to be provided under the NCQG. The Presidency text on the NCQG, released on the morning of November 23, brought forth strong contestations from developing countries.
The text “calls on all actors” to enable scaled up climate finance for developing countries to at least US $1.3 trillion per year by 2035 and encourages developing countries to contribute towards this target on a voluntary basis. This dilutes the legal obligation of developed countries to provide the entirety of the finance under the goal.
The text also extends the previous US $100 billion goal to only US $300 billion per year by 2035 (up from US $250 billion mentioned in the previous draft) with developed countries “taking the lead”. The stated US $300 billion figure falls miles short of the required scale of funds. The demand from the G77 and China bloc — the largest negotiating bloc of 130+ developing countries — was for $600 billion in public finance from developed countries, out of a larger demand of $1.3 trillion per year by 2030. This was revised downwards to $500 billion in the final days of the negotiations.
According to the UNFCCC’s Second Needs Determination Report, a cumulative US $5.012-$6.852 trillion is required until 2030 to support developing countries in achieving their Nationally Determined Contributions. The gap in adaptation finance alone stands at a staggering US $194-366 billion per year. This only shows dismal levels of ambition from developed countries.
The decision text does not clarify any separation between ‘provision’ and ‘mobilisation’, which provides leeway for developed countries to shift their financial obligations onto the private sector. It also lacks language on the NCQG being additional to existing aid commitments of developed countries or any specific sub-goal for grants or grant-equivalent finance under the new target.
Moreover, given the timeframe provided in the text, developing countries could remain stuck with a highly inadequate quantum of finance till 2034, before it gets ramped up to $300 billion by 2035.
Negotiations were difficult and threatened to break down at various points. Delegates from the Least Developed Countries (LDCs) and Small Island Developing States (SIDS) walked out of consultations on the late evening of November 23 as the negotiations were not offering a progressive way forward for their countries’ circumstances and demands. LDCs and SIDS had been demanding an adequate finance target (in line with the G77 and China bloc’s demand) with specific allocation floors for their countries.
At the closing plenary, the Presidency gavelled down the decision on the NCQG early in the meeting. They were met with a strong statement from the Indian delegation who had asked to make a statement prior to the adoption of the decision. India objected to the adoption of the decision and expressed strong disapproval for the elements of the text as well as a ‘lack of trust’ in the process.
In putting forth such a weak outcome, the Global North has essentially abandoned the South with this meagre offer of $300 billion; it has no right to demand mitigation ambition from our part of the world with so little finance on the table. The ambiguities of the goal make it clear that there will be little accountability and traceability of funds. This was the last remaining window for the North to step up, pay its fair share, and restore some semblance of trust in the multilateral process. They have failed.