After a tense disagreement, developed nations finally agreed to pay $300 billion per year by 2035 to help poorer countries adapt and mitigate climate change impacts. This amount doubles the $100 billion target set under the New Collective Quantified Goal on Climate Finance (NCQG) but falls short of the $1.3 trillion earlier requested by developing nations.
The conference, which was extended to Sunday, November 24, 2024, beyond its official closing—November 22, was marred by disappointment, anger, and protest causing the Alliance of Small Island States and the Least Developed Countries to walk out of the meeting over the failure of developed countries to pay $1.3 trillion in climate finance, according to media reports.
Mohamed Adow, Director of Powershift Africa, a think tank, expressed his disappointment and described the deal as a “disaster” that has no impact on poorer countries, the planet, and the difficulties they encounter due to climate change effects.
“It’s a betrayal of both people and planet by wealthy countries who claim to take climate change seriously,” Sow said in an X post. However, the COP29 Presidency set an ambitious goal of mobilizing $1.3 trillion in climate finance annually by 2035, from both public and private sources.
Poor countries will receive funds to support climate action through private, bilateral, and multilateral sources, according to the final document released on Sunday, November 24, 2024, by the United Nations Framework Convention on Climate Change (UNFCCC). However, countries will begin receiving in 2026
Developing countries are also encouraged to contribute voluntarily, including through South-South cooperation. Scaling Ambition: Aiming for $1.3T annually in public and private climate finance by 2035.
“The LDC Group is outraged and deeply hurt by the outcome of COP29. Once again, the country’s most responsible for the climate crisis has failed us. We leave Baku without an ambitious climate finance goal, without concrete plans to limit global temperature rise to 1.5°C, and without the comprehensive support desperately needed for adaptation, loss, and damage,” the LDC said.
The LDCs, the Alliance of Small Island States, and the Least Developed Countries have earlier pushed for $1.3 trillion to deal with damage from climate change. These countries contribute less amount of greenhouse gas emissions compared to the U.S., China, Germany, Russia, and Japan.
The annual Conference of Parties (COP) is a gathering of both rich and poor nations to discuss efforts to reduce emissions by setting targets and goals for climate action and finance to support these actions that ensure that they are achieved.
Finance was highly placed on this year’s COP29 agenda. Parties aimed to set up the NQCG as a replacement for the $100 billion climate commitment made by developed countries in 2009. The NQCG is a long-overdue target developed nation commitment made to support developing nations.
Both the developing nations, Leased Develop and Alliance of Small Island Countries, argued that this target is overdue and cannot meet their climate needs; instead, they demanded trillions—$1.3 trillion. Developing countries advocate and lobby to boost adaptation and mitigation targets set under their Nationally Determined Contributions (NDCs).
On Thursday, November 21, 2024, the UNFCC released the first draft document of the NCQC with an amount of $250 billion per year. This amount was rejected, leading to an increase to $300 billion. Developing countries argued that this is way below the $1.3 trillion target to meet their climate needs. After negotiations, developing countries agreed to pay $300 billion annually starting in 2026. The UK, countries in the European Union, Japan, and the US are key donors to the $300 billion.
What Else Happened at COP29
Article 6 provides trusted and transparent carbon markets for countries as they collaborate to reach their climate goals. This cross-border cooperation is expected to reduce the cost of implementing countries’ national climate plans (NDCs) by up to $250 billion per year.
Carbon market
Two new carbon markets were opened under Article 6 of the Paris Agreement. The first, known as Article 6.2, regulates bilateral carbon trading between countries, while Article 6.4 creates a global crediting mechanism for countries to sell emissions reductions. Countries are allowed to trade emissions reductions through their nationally determined contributions.
The cross-border cooperation is expected to reduce the cost of implementing countries’ national climate plans (NDCs) by up to $250 billion per year,” according to a statement.
“The COP29 Presidency encourages Parties to reinvest these savings in even greater climate ambition. The next generation of NDCs, due in February, are make-or-break for the world’s hopes of keeping 1.5 degrees within reach. Today’s milestone has been reached just in time to aid countries in committing to more ambition in their climate plans.”.
The Loss and Damage Fund, established at COP27, became fully operational at COP29. This fund is intended to provide financial assistance to vulnerable countries impacted by climate change. Enhanced transparency and reporting: Progress was made in improving transparency and reporting on climate actions through Biennial Transparency Reports (BTRs). Countries agreed on a framework for transparent reporting of climate actions and emissions. The BTRs is designed to build mutual trust and confidence among Parties, support developing countries in preparing and finalizing their Biennial Transparency Reports (BTRs), encourage universal participation in the Enhanced Transparency Framework (ETF), and advance the transparency agenda beyond COP29.
