All eyes will be on whether the world’s biggest climate negotiations will be able to broker a deal to deliver climate finance for the most vulnerable when nearly 200 countries convene for the next two weeks.
United Nations climate change chief Simon Stiell, speaking last month at think tank Brookings Institution’s event, said that this year’s COP summit must be a “stand-and-deliver COP“. “At COP29 in Baku all governments must agree [on] a new goal for international climate finance that truly responds to the needs of developing countries,” he said.
This year’s COP has also been widely described as the “finance COP” and some of the most important items on the agenda have to do with numbers – how much rich nations should pay developing countries as part of a new climate finance goal, ways to boost the global loss and damage fund, and Article 6 a framework under the Paris Agreement on international carbon trading rules that could see a breakthrough early in the talks after years of deadlock.
The size of COP could also matter. The annual summit’s ballooning attendance has been under the spotlight – at least 84,000 delegates attended COP28 in Dubai, double the number of participants at COP27 in Sharm El-Sheikh in 2022. This year’s COP will likely shrink, yet there is concern about key representatives and world leaders already saying that they will drop out of the talks. How will that impact negotiations?
Eco-Business highlights a few numbers related to this year’s COP and looks at what they could mean for global climate action.
US$1 trillion: Annual amount least developed countries want for the climate finance ‘piggy bank’
A new climate finance goal known as the new collective quantified goal (NCQG) will be the centrepiece of this year’s climate talks. Countries will have to agree to an amount that is meant to replace a US$100 billion annual funding target by 2020 that poor countries were promised by wealthy nations 15 years ago.
At the pre-COP meetings in Baku in the run-up to this month’s summit, least developed countries called for a fund of public investments worth at least US$1 trillion annually by 2030, to pay for mitigation, adaptation and loss and damage.
This figure is part of a broader amount of US$5 trillion per year that civil society is asking for, as part of the climate debt advocates say is owed by rich countries.
Luwalhati Tiuseco, chief of staff and undersecretary of the Philippines department of finance, delivers the country intervention at the high-level ministerial dialogue on the new collective quantified goal (NCQG) on 9 October 2024 in Baku, Azerbaijan. The Philippines was one of the least developing countries who called for at least US$1 trillion for the NCQG at the pre-COP meetings. Image: UNFCCC
Concerns have been raised about the concept of “multi-layered goals” that developed countries were suggesting at the meetings.
The United States proposed a “global investment goal” where developing countries, along with private investors and financial institutions, would also contribute to. Similarly, European countries France, Germany, and Italy discussed an “investment layer for developing countries” alongside public finance.
Such proposals “dilute the core principle of developed-to-developing country obligations and contradict equity” and warned that it could prioritise private investment instead of government money, according to nonprofit Climate Action Network International (CAN).
It is uncertain if countries can agree on an amount. Observers will be watching how developed nations pledge to deliver their commitments – if they focus on grants and not loans, and if they prioritise the needsof vulnerable communities.
Article 6: Will it be fully operationalised?
Article 6, a section in the Paris Agreement which lays out the rules for countries to trade carbon credits to meet their national climate targets, is anticipated to be fully implemented in COP29 after years of stalled talks.
If talks are successful, its long overdue operationalisation will be largely because of a different approach taken by the supervisory body responsible for creating the United Nations (UN) carbon market. The body adopted standards for methodologies and greenhouse gas removals ahead of COP.
Jonathan Crook, a global carbon markets expert at non-profit Carbon Market Watch said the approach is “kind of controversial” as the decision is made before the convening of COP. Debate could arise, depending on “how countries react to this” as it isn’t the normal process that everyone expects, said Crook.
Over the weekend before delegates convene in Baku, legal and human rights experts have sounded their concern about the approach, which some say will sidestep expert committees, and leave governments with the final word on accountability rules for carbon trading.
US-based Center for International Law (CIEL) put out a statement on LinkedIn describing the development as “a dangerous move” and “an attempt to weaken effective climate action”. It said related documents should be submitted as recommendations for states to approve at COP29, but the unprecedented step by the supervisory body to “finalise” these standards and claim that they immediately take effect has bypassed countries’ approval. It called for all states to reject this approach.
Switzerland bought the first batch of carbon offsets under the Paris Agreement carbon credits mechanism, created through the rollout of electric buses, from Thailand in January 2024, under a bilateral partnership. The deal which involves the world’s first credit trade is under criticism for whether the offsets can deliver the emission reductions claimed. Although bilateral agreements under Article 6.2 have been operationalised since 2021, the level of transparency required for transactions remains unclear. Image: Sawasdee Thailand
Article 6.2, which allows countries to exchange emissions reductions and removals through bilateral agreements, has been operationalised since COP26 although it remains unclear how countries can ensure there is no double counting of emissions reductions through corresponding adjustments, among other issues of transparency.
What countries will be working on is Article 6.4, which establishes a global carbon market overseen by the UN. Whether parties decide on a centralised registry or want to rely on national systems to issue and oversee credits will be key in the discussions.
US$700 million: Current balance in the loss and damage fund
At COP28 summit last year, the world agreed to a new fund for helping vulnerable nations cope with climate risks. The consensus came 30 years after Vanuatu first raised the question of who should pay for climate catastrophe.
But since then, wealthy countries, which disproportionately bear a bigger responsibility for the climate emergency due to their historical emissions, have not added to the pot of the loss and damage fund, which currently only has more than US$700 million.
That financial outlay is the equivalent of less than 0.2 per cent of the irreversible economic and non-economic losses developing countries are facing from global heating every year.
Loss and damage, one of the main pillars of climate action alongside adaptation and mitigation, has not been included in the framework of the NCQG, and climate advocates worry that financing will be hugely inadequate.
The Philippines has been selected as the host of the loss and damage fund’s board and finance specialist Ibrahima Cheikh Diong’s appointment as the fund’s first executive director. COP29 president-designate Mukhtar Babayev has said the fund can begin turning the pledges from COP28 into the first tranche of financial aid to be disbursed in 2025, and promised to call on countries to contribute more money during the November conference.
40,000 attendees: Just the right size for COP?
The official count of registered attendees for COP29 surpassed 32,000 as of 21 October, according to host country Azerbaijan, and is expected to rise to about 40,000 to 50,000 people by the time the conference begins.
The expected turnout is roughly half the number of 85,000 attendees at last year’s COP in Dubai – the largest ever recorded at the annual summit – and some observers believe COP has found a “sweet spot” in its bid to shrink the size of the crowd at the summit. UN climate chief Stiell previously expressed hope to see future COPs reduce in size from Dubai, as “size does not necessarily translate to the quality of outcomes.”
Although the number of attendees will be smaller, as the UN has envisioned, key world leaders will be conspicuously absent in the climate talks in Baku, which start on Monday.
The European Commission has confirmed that its president Ursula von der Leyen will not attend the summit. France’s Emmanuel Macron and the outgoing US president, Joe Biden will be skipping the “world leaders’ climate action summit” on Tuesday and Wednesday. Brazilian president, Luiz Inácio Lula da Silva, cancelled his participation due to a head injury, Reuters reported. The leaders of China, South Africa, Japan and Australia are expected to miss the talks as well.
However, more than 100 world leaders are expected to make an appearance at the negotiations, with 61 presidents, 38 prime ministers and 2 crown princes registered as of mid-October, the COP29 presidency told Reuters.
World leaders walk down the Al Wasl Stadium during COP28 at Expo City Dubai on 1 December 2023 in the United Arab Emirates. Im,age: Anthony Fleyhan/ Flickr
Small developing countries have voiced their disappointments about the COP process. Papua New Guinea said in August that it will be boycotting COP29 as a form of protest against the world’s largest countries, which are also the biggest greenhouse gas emitters.Its prime minister James Marape said the pledges and pronouncements made at COP “seem distant from victims of climate change” as well as countries like itself which hold substantial forests.
It has also been reported that world leaders from major economies including the European Union and Brazil are planning to skip this year’s summit, for varying reasons. European Commission president Ursula von der Leyen will not attend the summit because of political developments in Brussels, a Commission spokesperson told the media last week. German chancellor Olaf Scholz will also sit out of the summit due to the collapse of the country’s coalition government.
The recent reelection of Donald Trump as the 47th president of the United States has further already cast a shadow over negotiations. In his first term, Trump withdrew the US from the Paris Agreement and he has promised to withdraw again. The move could threaten progress on climate finance, as the US promised last year to contribute over US$17 million to the loss and damage fund.
US$100 billion: Has the promise of climate finance been delivered?
Papua New Guinea’s Marape is not alone in thinking that rich countries have not paid their fair share of climate finance over the years, despite numerous pledges.
Even as new, larger climate finance targets are being negotiated, some developing nations say they still have not seen the effects of the US$100 billion promised by developed countries nearly a decade ago, at COP21 in Paris. It was meant to have reached poorer countries by 2020; rich countries claimed to have achieved this target in 2022.
“In terms of the amount, that has all been well-discussed and negotiated – commitments have been made [but] a lot of it remains unfulfilled,” Malaysia’s minister of natural resources and environmental sustainability Nik Nazmi Nik Ahmad told Eco-Business in an interview last month. He said that Malaysia intends to continue advocating for a just and inclusive transition for developing countries, especially those in Southeast Asia.
Such calls for financial fairness as a form of climate justice hark back to the principle of “common but differentiated responsibilities”, which attempts to assign responsibility to countries based on their historical proportions of how much they have contributed to global emissions. However, experts have told Eco-Business that putting the principle into practice has been challenging.
Some progress was made at last year’s COP when several developed countries and host country United Arab Emirates announced contributions totalling more than US$200 million to the new loss and damage fund. But announced contributions do not always translate into impact on the ground quickly, as it has been evident from the slow disbursement of US$21.6 billion pledged to support Indonesia’s energy transition.
It will be up to national leaders and climate negotiators to hash out the details of past and future agreements over the next two weeks.
