COP29 summit: India leads Global South to reject 'unfair' finance deal

Rich Global North polluted the planet to turn wealthy in a short span of time, an Indian negotiator told this reporter in Baku last week. “And now they are trying to get even richer by asking us to fix the problem.”

 

This, in short, was the essence of the global finance-climate proposal, adopted on Sunday, with an 11-year lead time for fulfilment.

 

The final draft heavily slashed the demand for climate finance of $6 trillion a year from developing nations to $1.3 trillion, and brought down the level of grants from $1.3 trillion to $300 billion from public and private sources.

 

Thunderous applause echoed around the plenary hall of the Olympic stadium in Baku, the venue of the 29th UN global climate summit, as India vociferously led developing nations across continents in rejecting the new global climate finance proposal, presented by the UN Climate Change, terming the agreement “unfair”, “abysmally poor”, “paltry”, and an “optical illusion”.

 

Nigeria termed it “a joke”; Bolivia called it “let every man save himself”; and a group of least developed countries and the association of small island nations staged a walkout.

 

“Gavelling and trying to ignore parties from speaking does not behove the UNFCCC (United Nations Framework Convention on Climate Change) triple system, and we absolutely object to this unfair means followed for adoption,” India said.

 

But when Mukhtar Babayev, president of COP29, banged the gavel in the early hours of Sunday morning, adopting Agenda item 11a, the New Collective Quantified Goal on Climate Finance (NCQG), which offered a paltry $300 billion in climate finance, mainly as loans, none, including India, objected.

 

The (COP) presidency has pushed decisions against objections earlier in Cancun and also in Doha, said R R Rashmi, distinguished fellow, Teri, and a former negotiator and bureaucrat.

 

Tasneem Essop, executive director, Climate Action Network, said: “These have been the most horrendous climate negotiations in years due to the bad faith of developed countries. This was meant to be the finance COP, but Global North turned up with a plan to betray Global South. In the end, developing countries were left with little choice but to accept a bad deal.”

 

The “bad deal” threatens to unravel three years of planning that went into containing global warming below 1.5-2 degree Celsius from pre-industrial levels. A fair finance deal was the bedrock of the new nationally determined contributions (NDCs) — emission-mitigating targets and strategies presented to the UN by countries every five years — due by February 2025. The current NDCs will lead to a temperature rise of 2.6-2.8 degrees, the UN said.

 

  A climbdown

 

A former Indian negotiator said India could not muster the support of China and the G77 to collectively oppose the final NCQG draft, and only a United States (US), European Union (EU), or China could have stopped Babayev from steamrolling an agenda, which has two firsts — it almost absolves the US, Canada and the EU, among others, of historical responsibilities while transferring the burden to the developing world. Moreover, it asks multilateral development banks (MDBs), controlled by Western nations, to provide the bulk of the finance in the form of loans. Loans from MDBs are not cheap.

 

The UNFCCC made a misleading statement on Friday that the breakthrough agreement will “triple public finance to developing countries from the previous goal $100 billion annually to $300 billion annually by 2035”.

 

But Para 8 decides to set a goal, with developed-country parties taking the lead of at least $300 billion (a floor here vs just $250 billion in a previous draft) by 2035 for developing-country parties for climate action: (a) From a wide variety of sources, public and private, bilateral and multilateral, including alternative sources; (b) recognising the voluntary intention of parties to count all outflows from and finance mobilised by multilateral development banks towards the achievement of the goal set forth in this paragraph.”

 

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.”

 

Para 9 codifies the participation of the developing world. It “encourages developing country Parties to make additional contributions, including through South-South cooperation, to or supplementing, the goal set forth in paragraph 8 above.”

 

COP out 

• Climate finance demand cut from $1.3 trn per year in grants to $300 bn from all sources
• Wealthy nations blamed for historic pollution and offloading climate burdens onto developing countries
• COP 29 president pushed decisions despite objections, citing procedural norms
• Developing nations forced to accept ‘paltry’ finance deal
• Climate finance burden shifted to MDBs, increasing debts for poorer nations

 

The writer was in Baku last week covering COP29.