All eyes are on global leaders with less than one week to go until the annual UN climate conference kicks off in Azerbaijan. At a press conference Monday, panellists stressed the need for aggressive leadership from countries around the world in the middle of a crucial decade for climate action.
Despite geopolitical chaos around the world, “there is some political energy there to get a good outcome at COP29,” said Alex Scott, the Senior Advisor for Climate Diplomacy at ECCO. “But it is really going to depend on ministers and leaders turning up ready to make the bold compromise like they made nearly 10 years ago with the Paris Agreement to agree what this climate finance goal is going to be that will give confidence for that next generation of climate change planning. That’s going to depend on some more from Azerbaijan as the Presidency. It’s going to depend on that traditional high ambition coalition of the UK and the EU with the island states.”
The importance of reaching an ambitious climate finance goal in Baku is at the forefront of all conversations leading up to COP. In 2022, two years behind schedule, developed countries agreed to give more than $100 billion each year to developing countries to mitigate climate impacts and help them invest in the energy transition. But current projections indicate that investments need to increase by $1 trillion each year by 2030 in order to meet all the climate needs of developing countries.
An aggressive new climate finance goal in Baku could signal confidence to invest in the transition away from fossil fuels and building resilience in infrastructure. There are multiple methods to reach the money needed—including expanding the contributor base of countries and involving the private sector. What’s potentially lacking, experts say, is political will.
“The economic reality at the moment is that the climate transition is happening,” said Scott. “But the political reality is that it’s just not happening fast enough.”
“Whilst the economic realities between wealthy and developing countries are different, there is reason for optimism,” said Jason Braganza, Executive Director, African Forum and Network on Debt and Development. “Countries need to reach a climate finance goal that considers the fact that many developing countries, especially in Africa, have a debt crisis that they’re dealing with. Additional financing needs to be non- debt inducing so this means grants financing as much as possible. We need to ensure that this new fiscal space is used towards the transition and climate related activities.”
The structure of a potential new climate finance goal, the UNFCCC has said, could take the shape of an onion: an agreement with different layers representing different sources and flows of funding. The inner core of this model represents direct public financing, while the outer layers would aim at involving the private sector in climate finance solutions.
“What we haven’t seen in the public realm at the moment is that political level dialogue between ministers on what they want to see in that final goal,” said Scott. “There could be a two-layer outcome. There could be a three-layer outcome. What’s most important is that the goal that’s agreed to gives countries more confidence that there is going to be money to invest in their climate transitions and invest in their resilient infrastructure, and that is what needs to be played out at the COP. We’ll have to see how the negotiations go and what kinds of compromises ministers can reach when they bring their political weight and political capital into the negotiating.”
Setting up a strong climate finance goal in Baku will also be crucial in influencing countries to create strong nationally-determined contributions, or NDCs, which are due in February of this year. Experts said that the finance deal will be central to negotiations across various rooms.
“What we need to see overall is trillions more dollars invested in climate transitions,” said Scott. “That is non-negotiable. What we need to see agreed at the COP is a compromise between countries—a really bold compromise that they have managed to do before—that is going to bring the kind of confidence that that money will be accessible to invest in resilient infrastructure, to invest in transitioning economic sectors, to invest in building the mining industry for the minerals that are needed for the energy transition of the future. That’s the thing that’s really on the table at COP this year, and the political compromise that ministers need to be ready to make.”
“Polluters have to be held to account,” said Brendan Guy, the Director of the NRDC Action Fund. “For countries, that’s demonstrating progress towards their 2025 climate targets and their climate finance targets. For the fossil fuel industry that means paying for their decades of reckless pollution that harm communities, and accounting for the true cost of the product that they are peddling to the world.”
Last year’s agreement required countries to outline their plans for transitioning away from fossil fuels in their NDCs, a commitment reaffirmed by the G7 this year. But transitioning away from fossil fuels takes time, and ensuring that that capital is available is crucial for success. Experts pointed out that there is money available—if countries know where to look and can muster the political will to commit to climate action.
“The Europeans have paid €400 billion to just import gas in 2022,” said Linda Kalcher, the Executive Director of Strategic Perspectives. “You cannot argue that the money is not there. It just needs to shift. And that’s the sort of political signal that we need to see this year. And that’s where we need to up the pressure. It’s really down to leaders to actually make that happen.”
Experts also stressed that on the eve of the U.S. election, another Trump presidency could be catastrophic for climate action—but will not derail the progress being made worldwide.
One of Trump’s first acts in office when he was first elected was withdrawing the U.S. from the Paris agreement. If he is elected again, “we fully expect him to do so right out of the gate should he take office in January,” said Guy. “But we also expect that there will be an even larger and broader mobilisation across the U.S.—at the state level, the local level, the private sector, and the public sector more broadly to continue progress towards the U.S.’s climate commitments. We also expect that to be coupled with a resounding global recommitment to the goals of the Paris Agreement as other countries, even more so than under the first Trump term.”
