The major rich countries gathered at the UN climate talks in Azerbaijan have been engaged in intense negotiations. The aim is to reach an agreement on providing financial support to developing nations to combat the climate crisis. A significant decision was made to lift the global financial offer to $300bn per year. This move came after a lengthy closed-door meeting involving key ministers and delegation heads from various countries like China, the EU, Saudi Arabia, Brazil, the UK, US, and Australia.
Unraveling the Climate Finance Conundrum at Cop29
Climate Finance Negotiations: A Battle of Interests
Developing countries reacted with fury to the initial $250bn climate finance target on Friday. They dismissed it as insufficient, emphasizing the need for a substantial increase to help them transition to a low-carbon economy and adapt to extreme weather. Multiple sources indicated that the EU and some other countries were willing to raise the offer to $300bn in exchange for certain text modifications. The UN secretary general, António Guterres, was actively involved in pushing for a higher figure. However, Japan, Switzerland, and New Zealand were resistant to this increase.Even with a $300bn offer, it still falls short of what developing countries believe is necessary. Claudio Angelo from Observatório do Clima in Brazil pointed out that rich countries seem to be "clearly arriving to ditch their obligations." He emphasized that $300bn in grant funding is far below what developing countries need, especially considering their existing debt burdens.The Inner Core of the Finance Settlement
The offer from developed countries is intended to form the inner core of a "layered" finance settlement. Alongside this, there is a middle layer of new forms of finance such as taxes on fossil fuels and carbon trading. There is also an outermost layer of private sector investment in renewable energy projects. These layers are supposed to add up to $1.3tn per year, which is the amount calculated by leading economists as necessary for developing countries to address the climate crisis. However, many activists demand even more, with some suggesting figures of $5tn or $7tn per year based on developed countries' historical responsibilities.Other Unresolved Issues
While climate finance is the main focus at Cop29, other issues remain unresolved. Azerbaijan, as the host of the talks, has faced criticism for downplaying the commitment to "transition away from fossil fuels" in draft texts. This commitment was made a year ago at Cop28 in Dubai, but some countries are trying to remove it. Saudi Arabia has been widely accused of doing so at every opportunity, causing anger among countries that emphasize the need to shift away from coal, oil, and gas and towards renewable energy.In conclusion, the UN climate talks in Azerbaijan are at a critical juncture. The decisions made on climate finance and other issues will have a significant impact on the future of the planet and the efforts to combat climate change. Rich countries face the challenge of fulfilling their obligations while developing countries strive for adequate support to build a sustainable future.