COP30 at halftime sees EU pushback on India, China's CBAM, finance moves

Two issues on financial obligations of developed countries and unilateral trade agreements were dropped from the COP agenda after resistance from developed nations

What’s at play at the end of the first innings, 13,500 km from Delhi in a Brazilian town bordering the Amazon rainforest — a place where over 190 countries have assembled to find ways to cap global warming — finds an echo in the smog-infested streets of northern India and typhoon-struck parts of the Caribbean and the Philippines.

 

At the Conference of Parties (COP), the 30th edition of the annual United Nations (UN) climate meeting, happening this year in Belem, rich nations are refusing to address concerns over trade and finance raised by developing countries like India, China, or Jamaica. Nor have they paid attention to the concerns of the indigenous dwellers of the Amazon. 

Following a small riot and blockades at the venue, and a funeral procession for fossil fuels, accompanied by coffins and crosses, COP30 Chief Executive Officer Ana Toni saw in it a sign of a vibrant democracy — a spirit visible in the summit halls as hundreds of officials voice their views. 

But the fire of democracy may not translate into meaningful outcomes, said R R Rashmi, India’s chief climate negotiator at previous COPs: Neither for India, the ninth-most affected nation by extreme weather events, nor for the Amazon settlers, at whose home Brazilian President Luiz Inácio Lula opened up areas for oil drilling. 

“One was not expecting much to happen on finance and the development so far makes it clear that there are no additional resources forthcoming from developed countries,” said Rashmi, distinguished fellow at think tank The Energy and Resources Institute. Rashmi is referring to NCQG, a new funding mechanism agreed to at COP29 in Baku, where developed nations agreed to mobilise $300 billion a year by 2035. It was to comprise public and private finance, a $1.3 trillion goal that encapsulates all international climate finance, and a trebling of UN climate fund outflows by 2030 for “adaptation” and “loss & damage” from extreme weather events.  . 

“Basically it’s about increasing liquidity from sovereign and pension funds, but the spirit of investment in clean energy has slackened because of America’s withdrawal,” Rashmi added. 

The United States (US) has withdrawn itself from the Paris Agreement, a legally binding global climate treaty to contain global warming. 

Hisham Mundol, chief advisor, India, Environmental Defense Fund, said: “A trend we’re seeing and which I am expecting to manifest quite strongly in Brazil is collaboration between countries that don’t include the US.” These include, for example, the European Union (EU) and India on climate technology, or Japan and India on green hydrogen. 

Some of these cooperation agreements have taken the form of the Belem 4X pledge, where India has joined over 20 countries, promising to quadruple deploying renewables, and an association of the world’s leading utilities, including the Adani group, promising to mobilise $1 trillion for grid infrastructure by 2030. 

But these off-grid partnerships fail to address the elephant in the room — the vexed issue of a growing link between climate and trade, experts said. After failing to bring trade within the COP agenda in Baku last November, developing nations pushed to incorporate the Carbon Border Adjustment Mechanism (CBAM), an EU carbon tax, within the Cop30 purview. 

 CBAM and the agenda 

UN climate chief Simon Stiell implored countries to listen to one another’s priorities and make compromises to work toward a final deal. “I urge you to give a little so that you may get a lot,” he said. “We need to be giving more.” But Stiell’s exhortations have fallen on stony ground. Rashmi said “the two controversial issues that were presented as additional agenda items by Bolivia on behalf of like-minded countries — Article 9.1 on financial obligations of developed countries towards developing nations, and unilateral trade agreements — have been dropped and referred to the COP presidency.” 

The EU has refused to relent on the CBAM. “Trade is an essential enabler of the transition away from fossil fuels,” said Jacob Werksman, the EU’s chief negotiator, at a briefing 

last week.

“You also make sure that an open market isn't driving the deindustrialisation of your own economy. In other words, the terms of trade around clean energy are free but also fair.’’   

Werksman said the EU would not create some kind of proxy dispute settlement system for the CBAM, and any arguments about whether a country’s measure was consistent with its international legal obligations must be addressed by the World Trade Organization. 

The EU provided 31.8 billion euros of public climate finance and mobilised 11 billion euros of private finance in 2024, said Maria Samuelsen, Danish presidency, EU, at the briefing.  

“We are the largest provider, and we want to make sure that we do our part to mobilise at least $300 billion a year by 2035, and enhance action to scale up finance from all sources to at least $1.3 trillion that we agreed last year.” But the EU cannot compensate for the lack of US flows, Werksman said. Emphasising the role of private finance, Werksman said Article 9.1 of the Paris Agreement, which obligates developed nations to fund climate change from public finances, could not be discussed in isolation but alongside other provisions within the Paris Agreement that related to finance. 

Funding by developed countries is insufficient to implement the Paris Agreement and flows must be mobilised from other sources (private) as well, Werksman added.

The writer has covered the event online Rashmi said private funding came at commercial rates and made countries indebted but rich countries had lost the appetite to provide grants or cheap finance.