COP29: Where to get money to fight climate change?

Let’s abandon the thesis that climate financing is a matter of philanthropy ,” urged Simon Stiell, UN climate chief, at the inauguration of the COP29 summit in Baku, the capital of Azerbaijan. The conference, which will last until November 22, is expected to set new financial targets for international cooperation to combat the negative effects of climate change. As the hottest year on record, 2024 has witnessed a number of disasters that demonstrate the seriousness of the situation.

Urgent need for action

Recall that at the COP15 summit in Copenhagen in 2019, developed countries pledged to mobilize $100 billion a year for climate action in developing countries. This commitment was extended to 2025 at subsequent conferences, and now it’s time for an update.

In his speech, Simon Stiell highlighted the role of the United Nations Framework Convention on Climate Change (UNFCCC), advancing the thesis that without it, humanity would already be heading for a five-degree increase in global temperature compared to the pre-industrial era. At the same time, the UN representative reminded that the climate crisis affects each and every one of us, as it translates into higher energy and food prices, a decline in national competitiveness and global instability, which often entails loss of life.

Simon Stiello’s speech also included impressive numbers – by 2024, investment in green energy and infrastructure will reach $2 trillion, double the investment in fossil fuels. This, however, is still not enough to stop the 1.5°C temperature rise. Change must accelerate, and the benefits should be felt by citizens around the world.

New common quantitative target (NCQG)

The priority of the COP29 summit is to set a new common quantitative target for climate change financing. The issue is not only the contribution amounts themselves, but above all their allocation among the various stakeholders and specific targets, relating to adaptation measures and financial instruments.

Work on the NCQG has been underway for several months and was summarized in a working document published a month before the start of COP29. It contains general guidelines, including the timeframe for the new goal – 2035. The first financial estimates of the new global commitment closed in the range of $1-1.3 trillion per year, or ten times the existing commitments.

The NCQG is intended to address the current needs of developing countries, including climate investments in countries embroiled in armed conflict. Specific goals will address such key aspects as health, water and sanitation, hygiene and food security in the face of climate change.

Pay or…

Since the beginning of COP29, the dominant theme repeated by successive speakers has been the need for financial commitment in opposition to generous voluntarism. Simon Stiell pointed out that already today the cost of the effects of climate change in some countries reaches the equivalent of 5 percent of GDP, essentially fueling inflation. UN Secretary-General António Guterres, in his speech, recalled the recently published Oxfam report on. generating more carbon emissions in an hour than the average person does in a lifetime. The rich are the cause of the problems, the poor pay the biggest price, Guterres added.

The UN secretary recalled that by 2030 the financial gap between adaptation needs and available finances could be $359 billion a year, and the missing funds will translate into loss of life, loss of fertility and stunted economic development.

We have to pay or humanity will pay,” Guterres said, calling for tearing down the walls surrounding the topic of climate change financing. According to him, public contributions must increase, and in addition, innovative sources of capital must be involved. New financing targets should also stimulate the lending capacity of large international development banks.

COP29 stirs emotions

Calls for increased budgets for climate action are not only coming from high-profile politicians. Back in September this year, the international network of environmental NGOs Climate Action Network (CAN) officially backed activists demanding that the countries of the global North, i.e. developed, stable democracies, pay the countries of the global South $5 trillion a year in climate debt. In their view, it is the developed North that is responsible for 75 percent of greenhouse gas emissions, and should therefore support developing countries in adapting to climate change, also paying for the damage caused during natural disasters.

CAN’s statement came in at $192 trillion, which the North will owe the South by 2050, assuming global warming can be halted at +1.5°C relative to the pre-industrial era.

A more modest claim was made by CARE, a global confederation dedicated to fighting for a just world without gender inequality. In a document published in connection with the COP29 summit, it called for annual support of $1 trillion between 2025 and 2030, a sum derived from the UNFCCC’s second report detailing the financial needs for meeting climate goals. Referring to the $5 trillion sum proposed by CAN, CARE representatives say it is not supported by solid data and evidence.

Climate loss and damage fund is ready

Regardless of what will be agreed in Baku on new financial commitments to developing countries, the Climate Loss and Damage Fund, agreed in December 2023, has officially opened. Once the relevant documents are signed, the first contributions will flow into the fund – representatives of the Swedish government have already announced a contribution of $19 million. The total of contributions pledged so far reaches $720 million.

The fund will support immediate financial assistance to countries affected by natural disasters related to climate change, with funds used to rebuild homes, resettle and save lives. The first support will be provided as early as 2025. The World Bank was involved in preparing this important initiative, which is considered a model example of global solidarity on climate issues. All these efforts are aimed at overhauling the international financial architecture, which was openly discussed at the United Nations Future Summit in September. António Guterres admitted that the current system is inadequate and inefficient, with the world’s poorest countries spending more on debt repayment than on investments in health, education and infrastructure. If participants manage to reach a consensus, COP29 has the potential to be an important step toward a more supportive and equitable global future.

pic. main: UNclimatechange / flicker