COP29 agrees that rich countries contribute $300 billion annually to the Global South

COP29 reached agreement this Sunday at dawn, after two weeks of intensive negotiations, moments of crisis and ‘chaos’ in the final phase, on the financial agreement under which rich countries will pay $300 billion annually to developing countries to finance their climate action .

In a plenary session adjourned several times to finalize the details of the text to be negotiated, the nearly 200 countries meeting at the Baku summit finally sealed the agreement establishing the new climate finance target, which will will replace previous one. It was set at $100 billion per year.

Negotiators have discussed the details of this target over the past two weeks in the Azerbaijani capital, which, as agreed this Sunday, sets the amount of 1.3 trillion dollars per year by 2035, although of that amount only 300,000 million (287,000 million euros) should be provided through aid and mobilization of private funds with public support.

The delegates, journalists and audience, present in the gigantic hall where the plenary was held, erupted in applause and ovations as the President of COP29, Mukhtar Babayev, lowered the hammer on the financial agreement that marked the end of a marathon day that had been extended more than 32 hours after the summit’s scheduled closure.

Reforming the financial architecture

More than 24 hours after its conclusion, the Baku Summit concluded the agreement by which the rich states committed to take on part of the bill that entails the ecological transition and climate adaptation for the countries of the Global South, which historically the least responsible for global warming and at the same time those who suffer the most from its effects.

The text reiterates one of the demands that these states with fewer resources have been expressing in these forums for years: the reform of the international financial architecture.

The countries point out that this should “address the obstacles” that developing countries face in accessing climate finance, for example by removing barriers and high capital costs, budget constraints, “unsustainable debt levels” or high transaction costs.

It also recognizes the particular need to “pool public resources, subsidies and financing on highly concessional terms, in particular for adaptation and response to the damages” of climate change in “least developed” countries and “small island developing States”. .

300 billion low

The group of high-level economists reporting on climate finance on behalf of the UN estimates the cost of climate transition and adaptation in developing countries at $2.4 trillion per year by 2030, but calculated that of that amount, countries will pay $1.4 trillion can contribute. of the South from its own pocket, while the remaining trillion must come from external financing.

Through the new global climate finance target set in Baku, rich states have committed to mobilize a total of $1.3 trillion per year by 2035, but with a guaranteed first layer of $300 billion.

The largest amount is what developing countries proposed in the first days of COP29, even though they requested it for 2030, but the central layer of the target is still far from the $500 billion they demanded.

That layer, also called the “heart” of the target, will consist of “a wide variety of sources,” public and private, bilateral and multilateral, according to the agreement.

Categories

The “developed” and “developing” categories correspond to a classification dating back to 1992, the year the UN Convention on Climate Change was born, a product of the Earth Summit in Rio de Janeiro.

But now, 32 years later, developed countries such as the United States or the European Union claim that the world has changed and that they can no longer be considered developing countries, for example China, the United Arab Emirates or Kuwait.

Praise and rejection

The final agreement has received praise in developed countries, but has drawn rejection in developing countries and among environmentalists alike.

India’s representative and the country’s finance minister, Chandni Raina, was one of the most critical voices of the agreement, which she opposed, calling it “unfair” and excluding countries.

“I regret to say that this document is nothing more than an optical illusion. In our view, this will not address the enormity of the challenge we all face,” he stated, lamenting that it is “indicative of an erosion of trust and cooperation on an issue that is a global challenge that affects all has to make.

In this sense, the representative of Nigeria described the text as a ‘joke’ and an ‘insult’.

The representative of Bolivia has warned that we are entering an era in which “each country will focus solely on its own well-being.” He emphasized that climate aid should not be viewed as an act of charity, but rather a “legal obligation.”

Greenpeace has rejected the agreement and considers it ‘insufficient’. “Our future and that of our childhood are at stake!” said Greenpeace’s head for COP29, Jasper Inventor.

However, US President Joe Biden has hailed the “historic outcome” of COP29 and encouraged “all countries” to “take a step forward” to achieve the “ambitious 2035 international climate finance target”.

Other countries, such as Germany, have also welcomed the text and appealed to their responsibility towards developing countries: “We know that our decisions today will not in themselves be sufficient to meet all needs,” said the German Minister, Annalena Baerbock.

Similarly, the European Commissioner for Climate Action, Wopke Hoekstra, praised the agreement: “And those who believe in a better world have won,” he said, promising “a new era in financing the fight against climate change” will dawn, in which the European Union will continue to play a leading role.

For his part, the UN Secretary General António Guterres has welcomed the agreement reached and presented it as a “foundation” on which to move forward, although he has admitted that his expectations were more ambitious.