Suboptimal outcome: The Baku deal falls way short of requirements

The 29th meeting of the Conference of Parties (COP29) at Baku, Azerbaijan, was billed as the climate finance summit at which developed countries, the world’s historical emitters, would set out new finance commitments beyond 2025 towards developing countries to meet adaptation and mitigation goals. But it ended, two days after its scheduled close in the early hours of Sunday following a turbulent debate, with a finance deal that drew sharp protests from India, Nigeria, Bolivia and Cuba, in addition to a walkout by the Alliance of Small Island States and other climate-vulnerable developing countries over the amount of money committed. Although the amount committed under the New Cumulative Quantitative Goal (NCQG), at $300 billion a year by 2035, is three times the earlier annual commitment of $100 billion a year, it is well short of the developing countries’ demand for $1.3 trillion.

 

For all the roiling discontent, negotiators have pointed out that a deal, however imperfect, is better than no deal. Just two months earlier, negotiators meeting in Baku, in the run-up to COP29, failed to reach a consensus on financial commitments by member countries under NCQG. But climate-vulnerable developing countries have good reason for harbouring strong reservations about the deal gavelled at Baku. For one, if recent trends are a yardstick, even an inadequate $300 billion target looks unattainable. The target for the earlier collective climate finance goal of $100 billion per year, agreed at COP15 in Copenhagen in 2009, has been met just once, in 2022, two years after the target year. For another, the pledges for more finance are also ambiguous in scope. For instance, the COP29 agreed to a “Baku-to-Belem” road map — Belem, Brazil, being the venue of COP30 next year — that would involve all parties working together and using “all public and private sources” to get closer to the $1.3 trillion per year goal by 2035.

 

The plan is to periodically take stock of this decision till 2030, with reports due in 2026 and 2027. And finally, the agreement calls for developing countries to voluntarily contribute to this target, an insidious way of substantially diluting the Global North’s obligations. On the upside, after nearly a decade of negotiations, the nearly 200 countries at COP29 agreed on the final building blocks setting out how carbon markets will operate under Article 6 of the Paris Agreement. This is expected to make country-to-country trading and a carbon crediting mechanism fully operational. Carbon trading is an important form of climate finance, and these rules will help India operationalise this market.

 

India has gained traction from its negotiator’s astringent rejection of the deal and advocacy for the Global South. But the fact that the developing countries’ objections were so casually dismissed underlines the asymmetry implicit in climate-change negotiations where developed countries consistently underplay their historical responsibility for the crisis. This trend will be exacerbated with the incoming second climate-sceptic Trump presidency, after the first one reneged on the Paris Agreement. It is also noteworthy that despite firm intentions from the Biden presidency, the US Congress has consistently failed to meet the administration’s climate finance requests. With even this paltry amount vanishing under a Republican-controlled Congress, India and the developing world would do better to focus on their own adaptation strategies to address the climate-change challenge. Reducing the steadily growing reliance on thermal power would be a good starting point.