COP29 climate talks grapple with trillion-dollar task

BAKU: Developing countries need at least US$1 trillion per year by the end of the decade to cope with climate change, economists told UN talks in Baku, where early efforts to reach a finance deal risk being overshadowed by diplomatic rows.
Money is a focus at COP29 whose success is likely to be judged by whether it can agree a new target for how much richer countries, development lenders and the private sector must provide each year to help developing countries finance the transition to greener energy and protect against extreme weather.
Reaching a deal is likely to be especially hard at a summit where the mood has been soured by disputes and pessimism about shifts in global politics.
Donald Trump’s presidential election win has cast the United States’ future role in climate talks into doubt and tension between developed and developing nations has bubbled to the surface on the main stages and in negotiating rooms.
“Parties must remember that the clock is ticking,” COP29 Lead Negotiator Yalchin Rafiyev told a news conference.
“They must use this precious time to talk to each other directly and take ownership of building bridging solutions.”
A previous finance goal of US$100 billion per year, which expires in 2025, was met two years late in 2022, the OECD said in May. Much of it was in the form of loans rather than grants, something recipient nations say must change.
Setting the tone at the start of Thursday, a report from the Independent High-Level Expert Group on Climate Finance said the target annual figure would need to rise to at least US$1.3 trillion a year by 2035 if countries fail to act now.
“Any shortfall in investment before 2030 will place added pressure on the years that follow, creating a steeper and potentially more costly path to climate stability,” the report said.
Behind the scenes, negotiators are working on draft texts, but so far early-stage documents published by the United Nations climate body reflect the huge range of views around the table.
Some negotiators said the latest text on finance was too long to work with, and they were waiting for a slimmed-down version before talks to shape a deal could begin.
Any deal is likely to be hard fought given a reluctance among many Western governments – on the hook to contribute since the Paris Agreement in 2015 – to give more unless countries including China agree to join them.
The likely withdrawal of the United States from any future funding deal will raise pressure on delegates to find other ways to secure the needed funds.
Among them are the world’s multilateral development banks such as the World Bank, funded by the richer countries and in the process of being reformed so they can lend more.
Ten of the largest have said they would plan to increase their climate finance by roughly 60 per cent to US$120 billion a year by 2030, with at least an extra US$65 billion from the private sector.
On Thursday Zakir Nuriyev, head of the Association of Banks of Azerbaijan, said the country’s 22 banks would commit nearly US$1.2 billion to finance projects that help Azerbaijan transition to a low-carbon economy.
So far the conference – which many global leaders decided to skip altogether – has been marked more by division than unity.
French climate minister Agnès Pannier-Runacher on Wednesday cancelled her trip to COP29, after Azerbaijan’s President Ilham Aliyev accused France of “crimes” in its overseas territories in the Caribbean.
“Regardless of any bilateral disagreements, the COP should be a place where all parties feel at liberty to come and negotiate on climate action,” European Union climate commissioner Wopke Hoekstra said in response, in a post on X.
That followed Aliyev’s opening speech at the conference that accused the United States and EU of hypocrisy for lecturing countries on climate change while remaining major consumers and producers of fossil fuels.
On Thursday, meanwhile, Argentina’s government withdrew its negotiators from the COP29 talks.
Argentina’s President, Javier Milei, has previously called global warming a hoax. He is due to meet Trump, also a climate change denier, this week.
When asked whether Argentina would withdraw from the Paris Agreement, Ana Lamas, undersecretary for environment for Argentina, who led the country’s delegation at COP29, told Reuters: “We are only withdrawing from COP29.”
The COP29 Presidency described it as a matter between Argentina and the United Nations.