To the disappointment of many delegates, the draft joint declaration of COP29 did not specify any concrete figures regarding the funding that wealthy nations would provide towards helping developing countries transition to clean energy and adapt to the increasingly severe impacts of climate change.
The draft acknowledges that developing countries need at least “X billion USD” per year, however this crucial figure — which is key to reaching an agreement — was not specified.
The lack of specific figures has left negotiators feeling deadlocked, especially as the draft presents two clearly opposing viewpoints. On one side, wealthy nations, including the US and members of the European Union (EU), argue that climate finance should include funding from private organisations and developing countries such as China. On the other side, developing countries insist that funding should primarily come from government budgets of wealthy nations, mainly in the form of grants rather than loans that could increase public debt.
According to an independent report published by the UN, developing countries, excluding China, will need 1 trillion USD in external aid annually by the end of this decade to address global warming. This figure is dozens of times larger than the current commitment of 100 billion USD per year.
Developing countries, especially those in Africa, Latin America and Asia, have long called for a financial target of 1.3 trillion USD annually by 2035. The money is necessary to help them reduce emissions, build climate change resilience, and adapt to the worsening effects of global warming.
However, wealthy nations continue to oppose this request, resulting in no serious commitments being proposed. The negotiations have hit several roadblocks, such as disputes over burden-sharing from wealthy emerging nations and the risk of the US refusing to pay under its new administration.
The lack of progress on the financial front has left negotiators disappointed. Ali Mohamed, Chair of the African Group of Negotiators, said: “This is the reason we are here … but we are no closer and we need the developed countries to urgently engage on this matter.”
Power Shift Africa Director Mohamed Adow expressed disappointment about the lack of specific figures, emphasising: “We need a cheque but all we have right now is a blank piece of paper.”
The absence of specific numbers in wealthy nations’ financial commitments is considered a major setback. EU Climate Commissioner Wopke Hoekstra assessed this as unbalanced, unfeasible, and unacceptable, while also criticising the lack of specificity regarding financial contributions.
While climate finance is considered the top priority on the COP29 agenda, fossil fuel use continues to be a contentious issue at this year’s conference. Although important commitments regarding the transition away from fossil fuels were made at COP28, COP29 has not provided specific steps to reduce dependence on these energy sources.
When addressing fossil fuels, COP29 only mentions eliminating inefficient fossil fuel subsidies and encouraging businesses to contribute climate actions and adjust their operations to align with the 2015 Paris Agreement on climate change.
Observers note that in these challenging negotiations, negotiators need to quickly reach consensus on three main issues: the specific amount to be committed, how much of it will be in the form of non-refundable grants, and how the funding will be collected and distributed.
International leaders have urged countries to compromise to quickly reach a key financial agreement. Simon Stiell, Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC), warned that calculation tactics will burn precious time and reduce the goodwill needed to reach a financial agreement for poorer nations.
He emphasised that this agreement determines the safety and prevention of disasters that could destroy the lives of billions of people. Meanwhile, UN Secretary-General Antonio Guterres shared his belief that countries in the Group of Twenty (G20) need to lead by example and compromise on this important issue.
