UN climate summit in Baku leaves the developing world with crumbs

There were two outcomes at COP29 in Baku, Azerbaijan — in addition to a postponement — and both left a bitter taste for many.

 

The winners at the 29th annual edition of the United Nations Climate Summit were the United States, European Union, Canada, China, the Gulf countries, and the Azeris, who held the presidency of the summit this year.

 

The losers were emerging economies, least developed nations, island countries, and, of course, the global climate itself.

 

Unusually for a UN climate summit, COP29 was mainly about climate finance, and yet the finance mandarins were missing. Also missing were the heads of states of the EU, US, India, China, France, Germany, Brazil, and Russia, among many.

 

There were three key points of discussion. First, an agreement on a New Collective Quantified Goal on Climate Finance (NCQG), enabling countries to make new emission mitigation plans and set fresh goals by next February, dubbed Nationally Determined Contributions (NDCs). Second, adopting Article 6, an agreement among nations to set rules for a global carbon market. And third, a global stocktake to audit the emission plans of nations.

 

The first and second got through. The third got pushed to 2025.

 

Warming trajectory

 

The existing NDCs have failed to contain the warming of the planet beyond 1.5 degree centigrade from pre-industrial levels, the UN Environment Programme says in a report, with the planet set on a warming trajectory of 2.6 to 2.8 degrees.

 

But India, along with other emerging economies and poor nations, failed to persuade the Global North to open their wallets for a global climate finance deal. Developing nations and climate activists placed demands to the tune of $5-$6 trillion in financing for climate mitigation, adaptation and loss & damage through private and public sources, of which $600 billion to $1.3 trillion was supposed to be in public financing by 2030 in the form of transfers from Organisation for Economic Cooperation and Development (OECD) to the developing world. That number was whittled down to a quarter in the final agreement.

 

The winners

 

COP29 was a 12-day event, but negotiations over its climate finance agenda, which began in Bonn in June at the SB60 meeting, went into extra time. The NCQG and Article 6 were adopted in the early hours of November 24.

 

It was a take-it-or-leave-it offer, as one former Indian diplomat put it. The final figure was at least $300 billion by 2035 for developing country Parties for climate action from a wide variety of sources, and “called on all actors to work together to enable the scaling up of financing to developing country Parties for climate action from all public and private sources to at least $1.3 trillion per year by 2035”.

 

India’s chief negotiator, Chandni Raina, dubbed the goal too little, too distinct, and distant in a protest speech after the NCQG was adopted: “It is 2035, it's too far. Our 2030 estimates tell us that we need to do it at $1.3 trillion per year till 2030.’’

 

The finance deal is ambiguous, another Indian official says. No firm numbers, no firm donors, no firm sources of finance, and a long way to fulfilment.

 

In the first week of COP29, European Union’s key negotiator Jacob Werksman, told this reporter that negotiations for NCQG would start at a $100 billion number, and the donor list was unknown. 

 

Also problematic for India was section 8b and c — the first enabled rich nations to unload the climate finance burden onto the shoulders of multilateral development banks (MDBs), such as the World Bank, to disburse as loans, and the second “encouraged” developing nations to contribute to the climate kitty.

 

Empty promises?

 

Vineet Mittal, founder of Indian renewable energy developer Avaada, said the expectation from the summit was that if you promised $100 billion a year, at least that should be measurable and trackable, and how it was going Global South every year and it should be in the form of equity, not debt. He was referring to the $100 billion promised by rich nations in the 2009 COP at Copenhagen, which was finally fulfilled in a cloud of controversy in 2022.  

 

Jagjeet Sareen, partner and global climate co-lead at Dalberg Advisors, said: “As in the past decade, most of the climate finance accounted for has been channelled and mobilised by MDBs and bilateral development banks. This underlines the need for urgent governance, capital adequacy, and operational reforms in MDBs to turn these institutions into climate banks responsive to different developmental needs and climate actions,’’

 

Arunabha Ghosh, CEO, Council on Energy, Environment and Water, said: “COP29 has failed to deliver on its core mandate — binding commitments, real finance, and meaningful action to curb the climate crisis... Instead of delivering genuine financial support, we see the same empty promises recycled.’’

 

China came with a 1,000-strong delegation to Baku, compared to a 20-member team from India. Beijing pre-empted the West’s asking it for funds by claiming around $25 billion in climate finance disbursal to the Global South since 2016. It warmed up to the US for a Global Methane Pledge, an equally harmful greenhouse gas like CO2, and led the G77 countries to negotiate a climate finance deal.

 

Article 6

 

India has made progress towards setting up a domestic emission trading system by the end of next year, and the passage of Article 6 gives the proposed Indian emission compliance mechanism some guidance to make it compatible with global rules. India is also in talks to develop emission mitigating projects on a bilateral basis on green hydrogen and renewables with storage with Singapore, Japan and South Korea, among others.

 

Climate activists criticised Article 6 for lack of environmental integrity, for advocating carbon removal projects like carbon capture and storage, which effectively helps oil producing nations and companies to continue producing and burning fossil fuels while storing the carbon emitted.

 

“Governments approved a concerning package of carbon market rules that could end up undermining our efforts to reign in emissions rather than helping them,’’ said Isa Mulder, policy expert on global carbon markets.

 

Global stocktake

 

Saudi Arabia, Iraq and other oil producers, including the Azeris, gained after a mention of “transitioning away from fossil fuels” mentioned in Dubai was taken out and the adoption of the Global Stocktake agreement delayed after Chile, Switzerland, Australia, and Canada objected, terming it weak.

 

India and China have also tacitly backed keeping fossil fuel transition out of the text because of the impact on their coal-fired generators.

 

The Global Stocktake document does not explicitly mention fossil fuels, something that was included in the COP28 agreement in Dubai last year. Discussions on this agreement will resume next June in Bonn.

 

Climate canvas

 

> Climate finance in the form of grants is critical because it influences nations to make deep cuts in emissions

 

> First, an agreement on a New Collective Quantified Goal on Climate Finance (NCQG), enabling countries to make new emission mitigation plans and set fresh goals

 

> Second, adopting Article 6, an agreement among nations to set rules for a global carbon market

 

> Third, a global stocktake, to audit the emission plans of nations