Countries at the COP29 climate summit in Baku have adopted a global finance target of $300 billion annually by 2035 to help poorer nations manage the impacts of climate change.
However, the deal, struck after extended negotiations, has been met with mixed reactions, with some calling it a significant step and others deeming it inadequate for addressing the climate crisis.
The deal aims to increase financial support to vulnerable nations, building on the previous $100 billion annual commitment, which was met late in 2022 and set to expire in 2025.
It was intended to help nations combat climate impacts like storms, floods, and droughts, exacerbated by industrialized countries’ historical greenhouse gas emissions.
Mixed reactions to the deal
While some delegates celebrated the agreement as a victory for global climate cooperation, others criticised it as insufficient.
A representative of the Indian delegation, Chandni Raina, while speaking on behalf of India, described the deal as an “optical illusion,” arguing it fails to address the scale of the crisis.
“I regret to say that this document is nothing more than an optical illusion. This, in our opinion, will not address the enormity of the challenge we all face.
“Therefore, we oppose the adoption of this document,” he said.
However, United Nations climate chief Simon Stiell acknowledged the difficult negotiations that led to the agreement but hailed the outcome as an insurance policy for humanity against global warming.
“It has been a difficult journey, but we’ve delivered a deal. This deal will keep the clean energy boom growing and protect billions of lives,” Stiell said.
“But like any insurance policy, it only works if the premiums are paid in full, and on time,” he added.
What the deal means
The deal also lays the groundwork for next year’s climate summit, to be held in the Amazon rainforest of Brazil, where countries are meant to map out the next decade of climate action.
- The summit cut to the heart of the debate over the financial responsibility of industrialised countries – whose historic use of fossil fuels has caused the bulk of greenhouse gas emissions – to compensate others for worsening damage from climate change.
- It also laid bare divisions between wealthy governments constrained by tight domestic budgets and developing nations reeling from the costs of storms, floods, and droughts.
Where is the money coming from?
The group of countries required to contribute to climate finance—comprising around two dozen industrialised nations, including the U.S., Canada, and European countries—was originally determined during U.N. climate talks in 1992.
- European governments have called for expanding the list of contributors to include nations like China, the world’s second-largest economy, and oil-rich Gulf states. While the agreement encourages developing countries to voluntarily contribute, it does not mandate their participation.
- The deal also outlines a broader target to raise $1.3 trillion annually in climate finance by 2035, encompassing contributions from both public and private sources. Economists argue that this amount aligns with the funding required to effectively combat global warming.
Additionally, countries agreed to establish rules for a global carbon credit market. This initiative aims to generate billions of dollars for climate projects, such as reforestation and the deployment of clean energy technologies, by allowing the buying and selling of carbon credits.