When will nations most responsible for the climate crisis rise above hollow promises and deliver the justice the Global South desperately needs?

As the 29th Conference of Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) concluded in Baku, Azerbaijan, on November 24, developing nations were again left grappling with a profound sense of betrayal. Quoted as the "Finance COP," it was expected to deliver meaningful commitments on climate finance. Instead, it exposed the glaring inadequacies of Global North cooperation to address the pressing challenges of climate change, especially in the Global South.

The principle of ‘Common but Differentiated Responsibilities’ (CBDR), enshrined in the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro, acknowledges individual countries' different capabilities and differing responsibilities in addressing climate change. And India in fulfilling its responsibility of Nationally Determined Contribution (NDC) has emerged as a leader in climate action, navigating its colonial legacy and development challenges with remarkable resolve. By reducing emissions intensity by 33% between 2005 and 2019 and achieving its 2030 renewable energy targets ahead of schedule, India has demonstrated that sustainable development is achievable. However, the promises of the Global North are still empty, and COP29 was a critical moment for the Global North to rebuild trust by honouring its historical obligations.

One of the key outcomes of COP29 was the New Collective Quantified Goal on Climate Finance (NCQG), which aims to replace the earlier $100 billion annual target with a new goal of $300 billion annually by 2035. In addition, it aimed to secure collaboration among 'all actors' to scale up finance for developing countries, leveraging public and private sources and voluntary contributions from developing nations to achieve a target of USD 1.3 trillion per year by 2035. While this might sound promising, it falls significantly short of the actual needs of developing nations. According to the UNCTAD, these countries face a $4 trillion gap annually in sustainable development investments. Moreover, research shows that an additional $2 trillion annually is needed by 2030 to meet the Paris Agreement goals and keep global warming within 1.5°C above pre-industrial levels. The NCQG, while a step forward, is not enough to support low-carbon development or protect vulnerable communities from worsening droughts, floods, and wildfires. Without more ambitious commitments, a green future will remain out of reach.

Developing countries have consistently called for at least 50% of climate finance to be in the form of grants. However, developed nations did not clarify whether the proposed $300 billion would meet this demand. Oxfam's research reveals that over half of climate finance for fragile and conflict-affected states (FCAS) is debt-based, exacerbating their financial burdens. In 2022, 78% of FCAS faced medium to high debt distress, yet nearly 10% of climate finance was non-concessional loans, lacking preferential terms. An Unclear definition of climate finance and trends from the past loan-based finances shows concern about a growing "climate debt trap." This debt-heavy approach is not favourable for vulnerable nations struggling with limited resources.

Rich countries try to shift their burden by expanding their portfolio of climate finance to private sources, which highlight two major concerns, first private financing is not cheap access, they come as a loan with high interest rates and liability to pay back further push down to debt cycle. Second, Public funds need to play a key role in attracting private investments as they are complements, which implies that an increase in public investment raises the marginal product of private investment and, hence, crowds in private investment. McKinsey Report 2023 estimates that for every $1.0 of public finance, $1.6 of private capital could potentially be mobilized. However, achieving this leverage ratio of 1.6 requires clear strategies and substantial public investments. (Here, the Leverage ratio is calculated based on the average composition of climate finance investments in emerging and developing economies from 2018 to 2022, considering the leverage potential of different instruments like concessional capital, guarantees, and technical assistance, as estimated by Vivid Economics).

Further, the global north hurried negotiations at COP29 with extensive focus on climate finance, leaving many critical issues unattended. While the agreement mentioned the need to structure a mechanism of finance access for Least Developed Countries (LDCs) and Small Island Developing States (SIDS), it lacked specifics. No concrete legally binding targets were set based on the regional needs, income levels, or specific spending priorities like adaptation. Countries like India and Nigeria accused the COP29 leadership of improperly forcing the deal at the last minute. Samoa, as chair of the Alliance of Small Island States (AOSIS), raised concerns that these nations will continue to face challenges in accessing adequate finance.

These climate finance negotiations were critical to bringing action to the Kyoto Protocol and Paris Conference. However, the global north forgets that the issues of climate change, global warming, and deforestation are deeply intertwined with the historical legacy of colonialism. Over the centuries, Western powers have exploited the natural resources of these regions to fuel their own industrial and economic growth. Oxfam's 2015 Extreme Carbon Inequality paper mentions that Wealthy nations, home to just 20% of the world's population, are responsible for 80% of historical emissions. The wealthiest 1% have emitted 175 times more greenhouse gases than the poorest 10%. Today, these nations dominate climate negotiations, prioritizing their interests while urging resource-constrained countries to shoulder disproportionate burdens.

This domination of Global North has made the multilateral forums like COP redundant, failing to achieve any concrete results. This has resulted in many mini-lateral and bilateral arrangements between the Global South countries to focus on real time climate change issues. Countries like India have used its soft power and, through initiatives like the International Solar Alliance (ISA), the Coalition for Disaster Resilient Infrastructure (CDRI), and the Big Cat Alliance, have assumed the leadership of the Global South. Such initiatives have increased the negotiating power of these nations on the global climate diplomacy table. This is clearly evident from the final communique of COP 26 at Glasgow agreeing ‘phasing down’ of coal instead of ‘phasing out’ as proposed by global north countries.

As COP29 concluded, it left the developing world with an uncomfortable question: Are climate negotiations an arena for genuine global cooperation, or merely a stage for 'performative diplomacy'? Bridging the gap between rhetoric and reality requires addressing historical injustices and ensuring equitable solutions. Only then can the world truly unite to combat the existential threat of climate change.

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