Developing world wanted rich nations to commit more funding
When COP29 President Mukhtar Babayev stepped to the podium at the closing meeting of the Baku climate summit on Sunday morning, hoping to clinch a hard-fought agreement on global climate finance, he carried with him two speeches.
One was crafted around a hoped-for deal being struck, while the other for the possibility of a summit-collapsing impasse, according to two sources familiar with the matter who spoke to Reuters on condition of anonymity.
“Yes, we had prepared different variations of the speech for various scenarios, but as we stepped onto the stage, we were confident in our success,” said one of the sources, an official in the COP29 presidency.
In the end, Babayev managed to gavel through the $300 billion finance plan to help developing nations cope with the soaring costs of global warming over the next decade before critics had time to object, allowing him to read the more positive speech.
He praised the agreement as a breakthrough and shamed the deal’s doubters as “wrong”, even as many of the climate deal’s intended recipients slammed it as woefully inadequate.
Babayev’s preparation for different outcomes at the divisive summit in the Caspian Sea nation of Azerbaijan reflected what many in the audience had already known before it began: the Baku climate talks were never going to go smoothly.
Expectations for a deal were depressed by worries of a looming U.S. withdrawal from global climate cooperation, geopolitical turmoil, and a rise of isolationist politics that had shunted climate change off much of the world’s top priorities list.
COP29: Takeaways
CASH FOR CLIMATE REMAINS TIGHT
The summit’s main agenda item – setting a new annual target for global climate finance – had nations wrangling for two weeks. Even after reaching a deal for $300 billion a year by 2035, many developing countries said the amount was far too low.
They also warned that the deadline for a decade away in 2035 would hold back the world’s transition to clean energy.
Some including India also lambasted wealthy nations for seeking to include contributions by developing countries in the annual target.
TRUMP TAMPS THE MOOD
Though he has yet to take office, climate denier Donald Trump’s victory in the Nov. 5 presidential election soured the mood at COP29.
Trump has vowed to remove the United States from global climate efforts, and has appointed another climate skeptic as his energy secretary.
Trump’s election meant the U.S. could offer little at COP29, despite being the world’s biggest historical polluter and most responsible for climate change. It also curtailed ambitions on the finance target, with the world’s biggest economy unlikely to contribute.
GREEN LIGHT FOR CARBON CREDITS
After nearly a decade of efforts to establish a rulebook for carbon credits, COP29 reached a deal to allow countries to begin establishing these credits to bring in funding and offset their emissions, or to trade them on a market exchange.
There are still some smaller details to be worked out, such as the registry’s structure and transparency obligations. But proponents hoped the boost to carbon offsetting will help draw billions of dollars into new projects to help the climate fight.
COP PROCESS IN DOUBT
Despite years of ballyhooed climate agreements, countries raised alarms about the fact that both greenhouse gas emissions and global temperatures are still rising.
Countries have been hit by increasingly extreme weather, making clear that the pace of progress hasn’t been fast enough to prevent a climate crisis.
This year is on track to be the warmest ever on record, with evidence of climate impacts spiraling faster than expected.
Widespread flooding has killed thousands and left millions hungry across Africa; deadly landslides have buried villages in Asia. Drought in South America has shrunk rivers – vital transport corridors – and livelihoods. And rain-triggered floods in both Spain and the United States have killed hundreds of people while wiping out billions in economic value.
TRADE TENSIONS TO THE FORE
Developing countries pushed hard at COP29 to open discussions about climate-related trade barriers, arguing that that their ability to invest in greening their economy was undermined by costly trade policies imposed by the world’s wealthiest economies.
In focus was Europe’s planned carbon border tax (CBAM). But equally worrying is the prospect of Trump introducing broad tariffs on all imports.
The the U.N. climate body agreed to add the issue to future summit agendas.
FOSSIL FUEL INTERESTS
This year’s COP was the third in a row to be held in a fossil fuel producing country, with both the OPEC secretary general and the president of host country Azerbaijan telling the summit that oil and gas resources were “a gift from God.”
In the end, the summit failed to set steps for countries to build on last year’s COP28 pledge to transition away from fossil fuels and triple renewable energy capacity this decade.
Many negotiators saw that as a failure – and a sign that fossil fuel interests were overpowering climate talks.
Those obstacles loomed large in Baku and will continue to overshadow global climate efforts in the months ahead as Brazil prepares for next year’s much broader conference in the Amazon rainforest city of Belem – where the world will plot a years-long course for steeper emissions cuts and building resilience in the fight against climate change.
“Multilateralism as a whole is under threat,” said Eliot Whittington, chief systems change officer at the Cambridge Institute for Sustainability Leadership.
“Indeed, the UNFCCC is probably the bright spot – proving that even in the face of incredibly hostile geopolitics and on fundamentally difficult questions, a deal can be made,” he said, referring to the U.N. body sponsoring the annual climate summit.
But the slow pace of progress, with global emissions still rising, has raised tensions and calls for reform.
“This is something that needs to be looked at, when just a handful of countries, based on their own economic interests, can almost wreck the entire process,” Sierra Leone Environment Minister Jiwoh Abdulai told Reuters.
TRUMP EFFECT
Among the biggest factors clouding the negotiations in Baku was the looming return of climate skeptic Donald Trump as president of the U.S., the world’s biggest economy, largest historical emitter of greenhouse gases, and top producer of oil and gas.
Trump, who takes office in January, has pledged to withdraw the U.S. from the global Paris Agreement on climate change, as he did during his first 2017-2021 term in the White House, and has called climate change a hoax.
Negotiators at the Baku conference said that while the U.S. delegation had helped in coming up with the climate finance deal, the country was unable to take a high-profile leadership role like it has in past climate summits, and it could not provide assurances the next administration would honor its pledges.
“With the United States, well, the voters have voted and that’s the way it is. What they’re going to do, we do not know,” South African Environment Minister Dion George said.
U.S. officials at the COP29 conference sought to reassure global partners that market forces, existing federal subsidies, and state mandates would ensure continued renewable energy deployment even if Trump disengages from the global process.
The war in Ukraine and rising conflict in the Middle East, meanwhile, have diverted global attention to security and energy availability, and led many governments to tighten their purse strings, experts said.
That made getting a bigger climate finance number hard, observers to the talks said.
“Even maintaining climate finance at current levels in the current political environment is a huge fight,” said Joe Thwaites, senior advocate on international climate finance at the Natural Resources Defense Council, an environmental group.
The agreement to provide $300 billion annually by 2035 would theoretically triple rich countries’ previous commitments to provide $100 billion by 2020. That earlier goal was reached in full only in 2022, and expires in 2025.
COP29: $300 billion spend
Countries agreed at the U.N.’s COP29 climate conference to spend $300 billion on annual climate finance. Here are some ways of understanding what that sum is worth:
MILITARY MIGHT
In 2023, governments around the globe spent $6.7 billion a day on military expenditure, according to the Stockholm International Peace Research Institute.
That means the $300 billion annual climate finance target equates to 45 days of global military spending.
BURNING OIL
$300 billion is currently the price tag for all the crude oil used by the world in a little over 40 days, according to Reuters calculations based on global crude oil demand of approximately 100 million barrels/day and end-November Brent crude oil prices.
ELON MUSK
According to Forbes, Elon Musk’s net worth stood at $321.7 billion in late November. The world’s richest man and owner of social media platform X has co-founded more than half a dozen companies, including electric car maker Tesla and rocket producer SpaceX.
STORM DAMAGE
Hurricane Katrina, one of the most devastating and deadliest cyclones in U.S. history, caused $200 billion in damage alone in 2005.
This year’s climate-fueled Hurricane Helene could end up costing up to $250 billion in economic losses and damages in the U.S., according to estimates by AccuWeather. While preliminary estimates by Morningstar DBRS suggest Hurricane Milton, also supercharged by ocean heat, could cost both the insured and uninsured nearly $100 billion.
BEAUTY BUYS
The global luxury goods market is valued at 363 billion euros ($378 billion) in 2024, according to Bain & Company.
COPPER PLATED
The GDP of Chile – the world’s largest copper producing country – stood at $335.5 billion in 2023, according to World Bank data.
GREECE’S BAIL OUT
Euro zone countries and the International Monetary Fund spent some 260 billion euros ($271 billion) between 2010 and 2018 on bailing out Greece – the biggest sovereign bailout in economic history.
BRITISH BONDS
Britain’s new government needs to borrow more to fund budget plans. Gilt issuance is expected to rise to 296.9 billion pounds ($372.05 billion) for the current financial year.
TECH TALLY
A 10% share of tech giant Microsoft MSFT.O is worth just over $300 billion, according to LSEG data. Meanwhile the market cap for U.S. oil major Chevron CVX.N stood at $292 billion.
CRYPTO
The annual climate finance target amounts to 75% of the total value of the global market for crypto currency Ether, the world’s second-largest cryptocurrency.
Alternatively, 3 million Bitcoin would cover the annual climate finance target as the world’s largest cryptocurrency closes in on the $100,000 mark following a rally fuelled by Donald Trump winning the Nov. 5 U.S. presidential election.
The unwillingness of wealthy countries to offer more money and the pressure to conclude even a weak deal ahead of more political turbulence became a major source of frustration for the Least Developed Countries and small island states, who told the Baku conference they felt sidelined in the negotiations.
At one point in the summit’s final stretch, negotiating blocs representing both groups walked out of talks in protest, delaying a deal by hours.
“We came in good faith, with the safety of our communities and the well-being of the world at heart,” Tina Stege, the climate envoy for the Marshall Islands, said at the closing plenary.
“Yet, we have seen the very worst of political opportunism here at this COP, playing games with the lives of the world’s most vulnerable people.”
India’s envoy, Chandni Raina, used her time to roundly reject the climate finance deal gaveled through by Babayev.
“We are disappointed in the outcome which clearly brings out the unwillingness of the developed country parties to fulfil their responsibilities,” she told the summit.
Climate advocates said that, while the deal is better than an outright impasse, the rifts exposed by the conference as well as the loss of trust in the process among poorer countries will pose a problem for Brazil as it prepares for COP30.
“I think this is a toxic chalice for Belem, and it’s going to be up to Brazil how they’re going to restore the trust,” said Oscar Sorria, director of the Common Initiative, a think tank focused on global financial reform.
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