With just five months remaining until this year’s United Nations climate summit, countries have yet to agree on the amount for a global funding bill to assist developing nations in combating climate change, let alone determine how to distribute it.
The decision is poised to dominate the COP29 climate talks in Azerbaijan this November, where nearly 200 countries must reach an agreement on a new annual financing target to help poorer nations reduce their emissions and safeguard their societies in an increasingly harsh and hot world.
The upcoming target will replace the annual $100 billion in climate finance that wealthy countries had pledged starting in 2020. Notably, this goal was only achieved two years later.
However, recent preliminary talks in Bonn, Germany, have yielded no major breakthroughs. Instead, they concluded by highlighting the persistent divisions among the world’s largest economies regarding who should bear the greatest financial responsibility for combating climate change and how much they should contribute.
Several representatives from climate-vulnerable nations expressed frustration over wealthy nations’ delays in past climate finance payments, while swiftly approving new funds for military responses to war and spending billions subsidizing CO2-emitting energy sources.
The climate talks in Bonn were intended to be a crucial opportunity to advance decisions for COP 29 in Baku this November. However, they fell short of even the most modest expectations.
Wealthy nations that refuse to accept responsibility and provide the trillions needed to help developing countries adapt to the climate crisis, address its damage, and achieve a just transition to a safe climate future have obstructed any progress. With less than six months until COP29, there is a glaring lack of commitment to support those on the frontlines of the climate crisis.
Getting the number right appeared difficult
The new target is a crucial tool for global climate talks, intended to fund projects that reduce planet-warming emissions, such as renewable energy and low-carbon transport. As all countries are set to update their national climate targets next year, negotiators fear that failing to establish this target could lead to weaker efforts.
Wealthy nations seemed cautious about setting a target that is too high, fearing it might not be met. The missed $100 billion target has become politically symbolic in recent UN climate talks, fueling distrust between nations as developing countries argue that the world’s economic powers are abandoning them.
Why is climate finance important?
Climate finance is not merely about wealthy nations contributing money but value lies in saving the planet. However, whenever leaders discuss climate change and mitigation, the issue of climate finance repeatedly recurs, despite the lack of a universally accepted definition.
Generally, it is understood as the flow of funds aimed at reducing emissions and enhancing resilience in both human and ecological systems. This funding is crucial for supporting projects that mitigate climate impacts, promote sustainable development, and protect vulnerable communities and ecosystems from the adverse effects of climate change.
Nevertheless, the debate over climate finance between developed and developing nations remains a loop-like issue at the beginning of every COP. Previously, at COP28 in Dubai, this pattern continued, with no decision reached on the definition of climate finance or what the new goal should be.
During the conference, various nations and institutions made significant pledges. For instance, the United Arab Emirates (UAE) committed USD 30 billion to a new fund for investing in climate-friendly projects worldwide, including $5 billion specifically allocated for the Global South.
Similarly, institutions like the World Bank announced plans to increase climate funding to 45% of its total lending, amounting to approximately $9 billion annually. Such commitments translate into the tangible mobilization of funds, leading to significant change.
Furthermore, the lack of a standardized and universal mechanism to track progress toward mitigation goals has been a major point of contention for developing nations. This absence of a clear and consistent framework makes it challenging to measure the effectiveness of climate finance, hold countries accountable, and ensure that funds are being used efficiently to achieve intended outcomes.
Developing nations argue that without such a mechanism, it is difficult to verify whether commitments are being met and to assess the real impact of the financial contributions on reducing emissions and building resilience.
Committed climate finance is not being disbursed to recipients at the same rate as other types of development finance, leading to delays or cancellations of projects. This lack of predictability negatively impacts developing countries, undermining their ability to plan and implement climate-related interventions effectively.