CashNews.co
- As the second week of negotiations begin at COP29, its success would depend upon whether countries can agree on a new finance target.
- Delays in achieving the climate finance goals would lead to costs spiking more in the future.
- The lack of progress in Baku has turned attention to the G20 meeting in Rio, as the G20 countries together contribute to 80 percent of heat-trapping emissions.
Climate diplomats from nearly 200 nations, gathered in Baku to arrive at an agreement on making adequate funds available to mitigate and adapt to the impacts of climate change, had a disappointing week. The UN meeting failed to make progress as it entered the second and final week, although a separate G20 nations’ summit in Rio di Janeiro struck a fragile consensus on climate finance. “Failure is not an option,” United Nations Secretary Antonio Guterres told the G20 leaders.
Although talks in Baku were deadlocked on the issue of how much money wealthy nations need to pay to emerging economies to move away from fossil fuels, cope with rising temperatures and pay for damage caused by extreme weather events, more is expected when ministers of member nations arrive in week two to handle dealmaking at the 29th Conference of Parties (COP29) currently being held in Baku under the aegis of the UN Framework Convention on Climate Change (UNFCCC).
The G20 summit in Rio di Janeiro, Brazil, taking place on November 18 and 19, coincides with the ongoing UN climate summit COP29 in Baku, Azerbaijan.
“Next week’s (G20) summit must send crystal clear global signals,” Simon Stiell, executive secretary of the UNFCCC, had said in a letter to G20 leaders meeting in Rio, even as diplomats in Baku grappled with a deal intended to scale up funding to address the worsening impacts of climate change.
The success of the Baku summit would depend upon whether countries can agree on a new finance target for wealthy countries, developmental lenders and private sector to deliver every year. Developing nations need at least $1 trillion annually by the end of the decade to cope with the climate emergency, a panel of economists have said.
Delays in achieving the climate finance goals will worsen the situation and would lead to costs spiking more in the future, according to the report by the Independent High-Level Expert Group on Climate Finance backed by the UNFCCC. The figure for climate finance put forth by G77, which includes several developing countries, including India, has asked for a $1.3 trillion climate finance target.
“As we reach the midpoint of COP29, it is deeply disturbing to witness climate finance negotiations come to a standstill,” said Harjeet Singh, global engagement director for the Fossil Fuel Non-Proliferation Treaty Initiative. “It’s time for developed countries to step up, fulfil their obligations and make a genuine commitment to meeting the climate action needs of developing counties.”
Bumpy start to Baku summit
This year’s climate summit had a bumpy beginning with host Azerbaijan pursuing a rather unusual tack. The country’s President, Ilham Aliyev, appeared to defend fossil fuels in the opening plenary on November 11, saying natural resources were a “gift of God”. He later made controversial remarks on overseas territories of France, prompting a sharp reaction from that nation, whose environment minister, Agnès Pannier-Runacher, announced on November 13 that she would be cancelling her trip to the climate conference.
However, this year’s COP29 President Mukhtar Babayev has a lot of credibility despite keeping a low profile, a European diplomat said on condition of anonymity. It is in the second week that the COP president typically takes over and tries to convince contending sides to come together to strike a deal.
Babayev has been optimistic on how things are looking in the final week of the Baku summit. “We’re feeling positive but there is still much work to do,” Babayev to the Associated Press, a news agency. “Success does not depend on one country or party alone; it requires all of us.”
The apparent lack of progress in Baku has turned attention to the G20 Rio meeting as these countries together make up 85 percent of the global economy and 80 percent of heat-trapping emissions. European countries have been saying an ambitious goal can be agreed upon if they expand the base of contributors to include some of the richer developing nations, such as China and Middle Eastern oil producers.
Fragile consensus in Rio
On Saturday, November 16, talks of a G20 joint statement in Rio, before the leaders’ summit, got stuck on the same issue, with European nations pushing for more nations to contribute and developing countries such as Brazil pushing back the proposal. By early Sunday morning, negotiators agreed to a text mentioning developing nations’ voluntary contributions to climate finance, but stopped short of calling them obligations.
“The G20 summit is at a critical point,” Singh said. “They have a chance to unlock the gridlock impeding COP29 and set a bold and ambitious climate finance target that delivers real climate justice.”
Although expectations are currently low in Baku, at stake are a new climate finance deal for developing countries, a new wave of 2035 climate targets ahead of a February 2025 deadline, and a signal that tackling climate change is still possible despite the return of President-elect Donald Trump, a climate sceptic, to the White House. The success of not only COP29 but also the next UN climate summit to be hosted in Brazil next year depends on an ambitious deal on climate finance.
“We call on governments, led by the G20, to meet the moment and deliver the policies for an accelerated shift from fossil fuels to a clean energy future, to unlock the essential private sector investment needed,” a coalition of business groups said in a letter. The groups includes the We Mean Business Coalition and the United Nations Global Compact.
India’s stance at Baku
India on its part laid emphasis on mutual trust and co-operation. “This trust is dependent on access to enhanced financial resources, technology transfer, capacity building, and availability of market- based mechanisms,” it said in its statement on Monday, November 18.
The statement came at a crucial time in the negotiations when there has been a trust deficit, with emerging nations asking for an ambitious New Collective Quantified Goal (NCQG) on climate finance and wealthy countries pushing for nations to take on ambitious economywide mitigation targets to achieve the goals of the landmark 2015 Paris pact of keeping global warming well below 2°C compared with preindustrial levels and make efforts to limit it to 1.5°C.
The BASIC grouping, which includes Brazil, South Africa, India and China, had in the first week demanded discussions on “climate change-related, trade-restrictive unilateral measures” such as Europe’s Carbon Border Adjustment Mechanism (CBAM) to be included in the main agenda.
CBAM refers to a carbon tariff introduced by the European Union to penalise countries that export emission-intensive commodities but do not have stated policies on carbon pricing. These commodities include aluminium, cement, electricity, fertilisers, hydrogen, iron and steel. The COP29 presidency though decided that CBAM would be discussed only informally at the two-week summit that is slated to end on November 22.
Countries such as India, China and South Africa, whose local exporting industries would be impacted by CBAM, have been critical of it ever since it was proposed by the EU, which has been insisting that it was a trade issue to be discussed at the World Trade Organization.
India has repeatedly said that CBAM unfairly penalises developing countries. The EU’s “irrational standards” are hurting businesses, and additional tariffs on select imports would force India to retaliate, commerce minister Piyush Goyal had said in October.
The COP presidency also claimed an early victory as countries put their stamp of approval on the key rules that would govern trade in carbon credits, but critics said they would enable rich countries to pay for climate action overseas and delay more expensive emission cuts domestically.
Climate experts and activists have criticised the way the deal was brokered. The standards were approved by a small group of technical experts, and some countries said they were not given any say in the endorsed rules. “We endorse what they have done, not the way they have done it,” said Kevin Conrad, executive director for the Coalition for Rainforest Nations. The supervisory board had overstepped its mandate, he added.
Despite the lack of progress on the crucial issue of climate finance, some experts at COP29 declined to give up hope. “As we move into the final week of negotiations, we’ll need strong political will to build trust, bridge divisions between parties, and take us to the finish line,” said Ani Dasgupta, president and CEO, World Resources Institute, a US-based think tank. “I’m optimistic that countries will coalesce around an ambitious overarching finance package here in Baku.”
“Bluffing, brinksmanship, and premediated playbooks burn up precious time and run down the goodwill needed for an ambitious package,” UNFCCC chief Stiell said on Monday. “So, let’s cut the theatrics and get down to real business.”
Banner image: A demand at COP29 to deliver climate finance for a just transition. Image by Habib Samadov-UN Climate Change via Flickr (CC BY-NC-SA 2.0).
