COP 29: Climate Finance to Take Centre Stage at the Annual Climate Conference

The 29th Conference of the Parties (COP 29) is being held in Baku, Azerbaijan, from November 11 to 22, 2024. Dubbed as the “finance COP”, this conference will focus on climate finance, with the aim of advancing the implementation of the Paris Agreement.^[1] The urgency for decisive action is heightened by alarming trends in global climate data. The World Meteorological Organization (WMO) reported that 2023 was the hottest year on record.^[2] Furthermore, the 2024 Emissions Gap Report revealed that global emissions are still rising, not falling as needed.^[3] The gap between climate targets and reality has widened, with current trajectories pointing to a 2.7 degrees Celsius temperature rise by 2100 unless drastic measures are taken^[4] Global emissions hit a new high of 57.1 gigatons of carbon dioxide equivalent in 2023.^[5]

The world has also experienced an increase in extreme weather events, with 2024 being particularly devastating for some parts of the world. India, for instance, saw extreme weather on 93 percent of days between January to September 2024, resulting in over 3,200 deaths, widespread crop damage, and massive infrastructure loss.^[6] In light of these challenges, COP 29 presents a critical opportunity for international collaboration on climate finance, emission reductions, and accountability.^[7] The need for urgent and effective negotiations has never been more pressing.

At COP 29, a key focus will be on securing finance for developing countries to support their climate action.^[8] This builds on the previous commitment by the developed nations to mobilize USD 100 billion annually by 2020, a goal that was not met in 2020 or 2021 but was achieved in 2022.^[9] The delay in meeting this target has led to a loss of trust between developed and developing nations. Hence, the conference is going to focus on finalizing a new, more ambitious climate finance goal called the New Collective Quantified Goal (NCQG), which is intended to replace the USD 100 billion target. This new goal will be crucial for accelerating climate action in developing countries and will likely shape climate finance strategies for the next decade and is also essential to informing the preparations for the next round of Nationally Determined Contributions (NDCs) under the Paris Agreement which are due in 2025. ^[10] Finalizing this new goal is said to be an opportunity to rebuild trust of the developing countries towards the developed nations. ^[11]

There are, however, key questions which surround the NCQG which include how much money will the developed nations provide and who should receive the finance. ^[12] Additionally, the questions also include how long will the goal last for, whether the fund will come as grants or loans, and whether the goal will include funding for loss and damage. ^[13] The aim is not just to increase the amount of finance but to ensure greater clarity, transparency, and comprehensiveness in financial flows for climate action. ^[14]

The UN estimates that developing countries need around $500 billion annually for climate finance, while other organizations such as the World Resources Institute suggests the amount to be as high as $1 trillion ^[15] There is also a significant divide on who should contribute to climate finance, with developing countries pressing developed nations to take greater responsibility, while developed countries want emerging economies like China to also contribute.^[16]

There is currently no universally accepted definition of “climate finance.” ^[17] Broadly, climate finance is seen not just as charity, but as a matter of responsibility and justice, grounded in the principle of “common but differentiated responsibilities and respective capabilities” (CBDR-RC). ^[18] This principle emphasizes that those who have contributed most to the climate crisis should bear a larger share of the responsibility for addressing it.^[19]India urges that to effectively tackle climate change, the international community must define climate finance clearly and determine its scope^[20] As it stands, climate finance is a central issue in international climate negotiations, but its precise nature remains contested. ^[21]

COP 29 may finally establish rules for international carbon trading under Article 6 of the Paris Agreement. ^[22] This mechanism allows countries to trade carbon credits to help meet their climate goals. ^[23] At COP 28, talks on Article 6 fell through due to deep divisions on key issues. ^[24] Additionally, Azerbaijan, the host country for COP 29, has proposed an ambitious action agenda which includes pledges to increase battery storage capacity six-fold, expand electricity networks, and cut methane emissions from organic waste. ^[25] Azerbaijan also aims to launch a new climate fund for developing countries, which would be financed through voluntary contributions from fossil fuel producing countries and companies. ^[26]This fund seeks to support clean energy adoption, improve energy efficiency, and foster the development of advanced technologies in developing countries that still rely on fossil fuel for energy. ^[27] Additionally, while COP 28 did flag off the loss and damage fund, many details remain unresolved, and it is hoped that these will be clarified at COP 29 in Azerbaijan. ^[28]

At the conference, there could also be disputes over how the funds should be allocated- whether for mitigating climate change, adapting to its effects, or compensating countries most affected by climate change for loss and damage due to past or unavoidable climate impacts.^[29]

The Conference would also see attendance of many participants whose agendas conflict with climate justice, including thousands of fossil fuel lobbyists and executives from major oil companies.^[30] These stakeholders have used past summits to promote their own interests, often opposing critical efforts to phase out fossil fuels.^[31]

As far as India is concerned, it is emphasizing the importance of climate finance at COP 29 in Baku. ^[32] It is calling on developed countries to fulfill their financial commitments to developing nations, stressing that climate finance is not a business opportunity but a moral and legal obligation.^[33] India aims to highlight the needs for greater accountability and protection for vulnerable communities in the face of climate change. ^[34]

For COP 29 to make a real difference, wealthier nations must not only fulfil their financial commitments but also implement strong, enforceable policies to reduce their emissions.^[35]

It has been argued that financial shortfall in the climate change domain has hindered countries from reducing fossil fuel reliance and adapting to climate impacts^[36] This impacts the overall global climate goals. .^[37] As COP 29 is going on, there is hope that it will mark a turning point where developed nations will fulfil their climate finance commitments and support vulnerable countries in building a resilient future. ^[38]

End Notes

^[1] Reuters 2024, ‘COP29: What are the Key issues at the UN climate summit in Baku”?, The Hindu, [Online] Available at: https://www.thehindu.com/sci-tech/science/cop29-what-are-the-key-issues-at-the-un-climate-summit-in-baku/article68840139.ece [3]
^[2] Editorial 2024, ‘Express View: The task at CoP 29’, The Indian EXPRESS, [Online] Available at: https://indianexpress.com/article/opinion/editorials/express-view-the-task-at-cop-29-9647717/ [4]
^[3] Bibek Bhattacharya 2024, ‘Will the COP29 summit break the cycle of broken promises?’, mint, [Online] Available at: https://www.livemint.com/mint-lounge/business-of-life/climate-change-cop29-emissions-gap-carbon-methane-11730212415307.html [5]
^[4] Ibid
^[5] Ibid
^[6] Down to Earth 2024, ‘Climate India 2024: An Assessment of Extreme Weather Events’, [Online] Available at : https://www.cseindia.org/climate-india-2024-an-assessment-of-extreme-weather-events-12460 [6]
^[7] No 3.
^[8] Ruth Townend 2024, ‘What is COP 29 and why is it important?’, Chatham House, [Online] Available at: https://www.chathamhouse.org/2024/10/what-cop29-and-why-it-important [7]
^[9] Explainer 2024, ‘What Will Happen at COP 29?’, International Institute for Sustainable Development, [Online] Available at: https://www.iisd.org/articles/explainer/what-will-happen-cop-29 [8]
^[10] Ibid
^[11] Ibid
^[12] Georgia Hammersley 2024, ‘What to watch for at COP 29: Expectations and Challenges’, the interpreter, [Online] Available at: https://www.lowyinstitute.org/the-interpreter/what-watch-cop29-expectations-challenges [9]
^[13] Ibid
^[14] Amitabh Sinha 2024, ‘Why Azerbaijan’s new climate fund may not be enough to plug finance gap’, The Indian EXPRESS, [Online] Available at: https://indianexpress.com/article/explained/explained-climate/why-azerbaijans-new-climate-fund-may-not-be-enough-to-plug-finance-gap-9582815/ [10]
^[15] Shabana Begum and Audrey Tan 2024, ‘ST Explains: What’s on the agenda at COP 29?’, THE STRAIT TIMES, [Online] Available at: https://www.straitstimes.com/singapore/st-explains-whats-on-the-agenda-at-cop29?close=true [11]
^[16] AGENCE FRANCE-PRESSE 2024, ‘Climate finance to top agenda at upcoming COP 29 in Baku’, DAILY SABAH, [Online] Available at: https://www.dailysabah.com/business/energy/climate-finance-to-top-agenda-at-upcoming-cop29-in-baku [12]
^[17] Ibid
^[18] Debbie Hillier 2024, ‘Beyond Promises: Why COP29 must secure a $1trn climate finance goal for global action’, World Economic Forum, [Online] Available at: https://www.weforum.org/stories/2024/11/why-cop29-must-secure-trillion-dollar-climate-finance-goal/ [13]
^[19] Ibid
^[20] No 14
^[21] Josh Gabbatiss 2024, ‘COP29: What is the ‘new collective quantified goal’ on climate finance?’, Carbon Brief, [Online] Available at: https://www.carbonbrief.org/cop29-what-is-the-new-collective-quantified-goal-on-climate-finance/ [14]
^[22] No 12
^[23] Ibid
^[24] No 15
^[25] Rakshith Shetty 2024, ‘Zeroing in on methane diplomacy, at COP29’, The Hindu, [Online] Available at: https://www.thehindu.com/opinion/op-ed/zeroing-in-on-methane-diplomacy-at-cop29/article68820057.ece [15]
^[26] No 14.
^[27] Tribune News Service 2024, ‘Climate finance for developing nations key COP29 agenda’, The Tribune, [Online] Available at: https://www.tribuneindia.com/news/india/climate-finance-for-developing-nations-key-cop29-agenda/ [16]
^[28] Arjun Dutt and Dhruba Purkayastha 2024, ‘Why COP29 is Crucial for Restoring Trust in Global Climate Action’, Outlook Planet, [Online] Available at: https://www.outlookbusiness.com/planet/cop-29/why-cop29-is-crucial-for-restoring-trust-in-global-climate-action [17]
^[29] Ibid
^[30] Amnesty International 2024, ‘COP 29: What you need to know about the global climate summit’, [Online] Available at: https://www.amnesty.org/en/latest/news/2024/11/cop29-what-you-need-to-know-about-the-global-climate-summit/ [18]
^[31] Ibid
^[32] Jayashree Nandi 2024, ‘India calls for ‘no digressions’ from finance goal ahead of COP29’, Hindustan Times, [Online] Available at: https://www.hindustantimes.com/india-news/india-calls-for-no-digressions-from-finance-goal-ahead-of-cop29-101725960048076.html [19]
^[33] Ibid
^[34] PTI 2024, ‘India to focus on climate finance, accountability, protection for vulnerable communities at COP 29’, The Hindu, [Online] Available at: https://www.thehindu.com/news/national/india-to-focus-on-climate-finance-accountability-protection-for-vulnerable-communities-at-cop29/article68851796.ece [20]
^[35] No 3.
^[36] Ibid
^[37] Ibid
^[38] Ibid

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