“This is the first Cop where finance takes centre stage,” Fiona says. This is because the 2015 Paris agreement requires signatories to establish a new climate finance target by 2025 to help poorer nations manage the impacts of the climate crisis and reduce greenhouse gas emissions.
This renewed commitment is called the new collective quantified goal, and it aims to replace the previous pledge of $100bn a year made at the 2009 Copenhagen climate summit. Wealthier nations only recently began to meet these climate finance goals, which has fuelled scepticism and distrust among countries in urgent need of funding. “Climate finance is absolutely essential for developing countries to tackle the climate crisis,” says Fiona. “Without substantial investment, significantly reducing global emissions will be impossible.”
Rachel Kyte, the UK’s new climate envoy, told Fiona in an interview that the initial $100bn figure was “plucked out of thin air” – in sharp contrast to this year’s target, which is based on rigorous research and analysis. The UN climate chief, Simon Stiell, stated that at least $2.4tn is needed annually by 2030 to help developing countries, excluding China, meet climate goals – about four times the current level of climate finance. “It’s already blazingly obvious that finance is the make-or-break factor in the world’s climate fight,” he told an audience in February.
While this $2.4tn may seem daunting, Fiona notes that nearly half is expected to come from countries’ domestic budgets and private investment, leaving roughly $1tn for wealthier nations to provide.
These figures are broadly accepted across developed and developing nations, but governments of wealthy countries are keenly aware of the domestic backlash that a large investment in climate finance could elicit. As a result, a gap will probably persist between the financial needs of developing countries and what wealthier countries are willing to contribute, even though, as Fiona says, evidence clearly shows that “investing in emission reductions in developing countries is one of the best investments we can make for the planet, as it benefits us all”. The status quo would be extremely costly anyway – a report commissioned by the International Chamber of Commerce found that violent weather events cost the world $2tn over the past decade.
Other routes to raise money
Developed countries are unlikely to propose much more than a tripling of the current $100bn by 2035 – less than a third of what developing nations say they need. Much of this funding is expected to flow through multilateral institutions like the World Bank and International Monetary Fund, though these organisations will require substantial reform to effectively support climate finance efforts.
In addition, “innovative sources of finance” could help bridge the gap. As Fiona notes, the money is out there, they’ve just got to tap into it. Potential sources include taxes on fossil fuels, global shipping, wealth, levies on high-carbon activities like private jet travel and redirecting the hundreds of billions spent annually on harmful fossil fuel and agricultural subsidies. However, these mechanisms inevitably benefit some groups while disadvantaging others, and will be challenging to implement effectively.
Redefining the blocs
Another way of raising the money is opening up the pool of contributors. The United Nations Framework Convention on Climate Change (UNFCCC), which created the list of developed and developing countries, was signed in 1992 – the global economy has changed dramatically since then.
China, Saudi Arabia, Qatar and the United Arab Emirates are still classed by the US as developing countries. China is now the biggest emitter of carbon dioxide in the world and has the second-largest economy, and many of the Gulf states are hugely oil rich countries. But under the existing rules they still do not have to contribute at all.
This issue has long complicated international climate cooperation. The US wants China to leave the “developing countries” bloc and contribute more to climate funding. China, for its part, has accused the US of not contributing its fair share – a concept that the US rejects.
The Trump effect
“A Trump administration is undeniably a disaster for Cop and for global climate action,” says Fiona. “Trump is in the fossil fuel industry’s pocket.” (Earlier this year, the president-elect nakedly proposed that major US oil producers contribute $1bn to his campaign in exchange for repealing climate protection laws).
The pivot away from climate action is already under way. The New York Times reported on Friday that Trump’s transition team has prepared a number of executive orders and proclamations that include scrapping every office in every agency working to end the pollution that disproportionately affects poor communities, and withdrawing the US from the Paris climate agreement.
Though the global effort to tackle the climate crisis may be hampered by Trump in the White House, some things may not shift dramatically: for instance, the US was never the most generous contributor to climate finance and has often been reluctant to provide substantial funding. An environmentally hostile Trump administration may not make a huge difference on that front.
“There is however a risk that other countries may now hide behind Trump’s resistance – he could provide cover for countries that are not that keen on climate action,” Fiona warns. The Biden administration, by contrast, spent years working to bridge divides with China on climate, fostering rare bipartisan cooperation. “That diplomatic effort won’t survive under Trump.”
For more reporting from Cop29, sign up to Down to Earth, the Guardian’s climate newsletter, which will be publishing newsletters twice a week live from Azerbaijan over the course of the conference
