The UN climate conference, COP29, concluded without universal satisfaction.
Developed nations’ commitment to substantially increase annual climate funding for developing countries fell short of expectations. The lack of stronger commitments to reduce fossil fuel emissions also drew criticism, and delegates remained deeply divided on new carbon market regulations. The late conclusion time, after extensive negotiations, added to the overall sense of frustration.
“We are extremely disappointed,” stated Chandni Raina, an Indian negotiator, following the finance agreement. “Developing nations are being pressured to transition to carbon-neutral pathways, even at the expense of our economic growth.”
However, despite widespread dissatisfaction, the talks resulted in an agreement, a notable achievement given the current geopolitical climate and rising isolationism. The election of Donald Trump as U.S. president shortly before the conference created significant uncertainty, raising the risk of complete failure.
“We are navigating a period of extremely challenging global politics, and we should not assume that this will soon improve,” noted Wopke Hoekstra, the EU’s climate action commissioner. “Reaching an agreement is truly exceptional.”
Negotiators ultimately decided that a flawed agreement was preferable to no agreement at all.
Climate finance has long been a contentious issue, with developing nations arguing that wealthier nations bear responsibility for historical emissions. The U.S., for instance, accounts for a disproportionately large share of global emissions despite having a relatively small population.
The finance deal commits developed countries to raising $300 billion annually in climate finance for developing nations by 2035 from public sources. This is significantly higher than the $100 billion commitment of 2009 but falls short of the trillion-dollar figure sought by many developing nations. Developing countries will monitor compliance closely.
For developed countries, the financial commitment offers strategic advantages. Global climate action benefits all nations, and investments in emission reductions in developing countries help mitigate the effects of climate change. These investments also help to prevent cross-border crises related to climate change. (It is also important to note that much of the funding will be in the form of loans and investments rather than grants.)
The crucial question is whether wealthy nations will fulfill their pledges. The outlook is challenging. Political pressures in Europe have led to cuts in international development funding. The situation in the U.S. is even more uncertain, with Congressional gridlock historically hindering climate finance initiatives. Further reductions under a Trump presidency are anticipated.
The private sector’s role is also critical. The COP29 finance agreement aims for $1.3 trillion in annual finance by 2035 from all sources. This requires substantial private sector involvement and contributions from countries like China. Innovative mechanisms are needed to encourage private investment.
Such mechanisms have been widely discussed, with the hope that public and philanthropic funding could reduce risks for private investors. However, skepticism remains, given the lack of strong incentives for private investors to focus on developing countries.
Despite the obstacles, the COP29 agreement establishes new goals. The year 2035 will serve as a benchmark for assessing global progress, with both successes and failures likely to be highlighted.
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