COP stingy on climate finance

A funding agreement at COP29 was key to help nations keep global temperature rise below 1.5°C

- Puja Das

After an extension and over two weeks of intense negotiations, the 29th UN climate change conference, or COP29, in Baku finally reached a consensus on a new collective quantified goals (NCQG) on climate finance but disappointed developing countries with only $300 billion per year by 2035, against a required $1.3 trillion.

The Standing Committee on Finance of COP29 last week acknowledged that the nationally determined contributions of developing countries will cost $5.1-6.8 trillion up until 2030 or $455-584 billion per year, and adaptation finance needs are estimated at $215-387 billion annually until 2030.

"The NCQG's heavy reliance on loan-based financing and private capital, with limited emphasis on grants or low-cost mechanisms, risks exacerbating debt burdens for developing countries. This could shift undue responsibility onto these nations, compelling them to seek additional contributions," said Suryaprabha Sadasivan, senior vice president at Chase India, a public policy and advocacy advisory firm.

The NCQG refers to finance that is meant to be provided by developed countries to developing countries to help them meet their goals to transition from fossil fuels and curb greenhouse gas emissions. This will cost "trillions of dollars" to developing nations.

Developing countries are due to share their new NDCs by early 2025. Experts have raised concerns that the lack of predictable and adequate finance constrains the ability of developing nations to scale up climate ambition.