COP29 exacerbates climate injustice

COP29 in Baku, Azerbaijan, has ended with disastrous results. Dubbed the “climate finance COP”, COP29 failed to deliver an international climate finance target that is able to meet the challenges and financial needs of the coming years. The results actively undermine climate justice and solidarity. COP29 also launched international carbon markets under the Paris Agreement, which create serious new loopholes for the fossil fuel industry and high-emitting states. 

Climate finance: Too little, too late 

In Baku, Global North governments were not willing to put on the table the climate finance that is actually needed. This is evident from the final agreement of a mere 300 billion US dollars per year, a far too low figure that will make it extremely difficult for many poor countries to transform their economies, adapt to the climate crisis and be compensated for loss and damage. It is also apparent from the fact that Global North countries refused to even put forward a number as a basis for negotiations until the penultimate day of COP29. When those figures finally emerged – initially at 250 billion US dollars per year – they were rejected by the governments of the Global South with great indignation and declared to be absolutely insufficient. However, given the refusal of the Global North to live up to its responsibility, this tactical move helped them ensure that in the short time available, there would be little room for maneuver for a better outcome.

300 billion US dollars per year in climate finance by 2035: This is several orders of magnitude away from what is actually needed. Studies clearly and consistently show that the annual needs are in the trillions, and with the impacts of the climate crisis becoming ever more drastically apparent, unmistakably on an upward trend. The COP text even states these figures: implementing the Nationally Determined Contributions (NDCs) of the countries of the Global South will cost 5.1-6.8 trillion US dollars by 2030, or 455-584 billion per year. The financial requirements for adaptation to the climate crisis are estimated at 215-387 billion US dollars per year until 2030. The costs for loss and damage are not included. The contrast with the outcome of the COP29 negotiations is all the more cynical. 

This is aggravated by the problem of inflation: 300 billion US dollars will be worth significantly less in real terms in 2035 than they are today. With an assumed average inflation rate of 5 percent,  300 billion US dollars in 2035 will only be worth around 170 billion US dollars in real terms. 

The larger goal of 1.3 trillion, which the Global South had demanded, also appears in the text, but as a very vague target for investments from all sources, and it is formulated in even more non-binding terms than the goal of 300 billion per year. 

This outcome is all the more cynical given that financial obligations clearly arise from the historical responsibility of the Global North for the climate crisis and these principles are clearly anchored in the Framework Convention on Climate Change and the Paris Agreement. The 2015 Paris Agreement, which relies on all countries contributing to limiting the climate crisis, equally hinges on financial support for the Global South in these very efforts – and this global bargain was effectively terminated at COP29. 

In addition, numerous proposals have been made in recent months and years as to how the money could be raised, for example, from a tax on high net worth individuals (billionaire tax) or levies on climate-damaging activities like the extraction of fossil fuels or for frequent flying. 

And while the necessary funds for the Global South are not being provided, at the same time, outrageous sums continue to flow into fossil fuels – in the form of investments and subsidies. In an earlier version of the text for the climate finance goal (NCQG), the figures were even included, but ended up being cut from the final outcome document: In 2021-22, an average of 958 billion US dollars per year was invested in fossil fuels, and fossil subsidies averaged 1.1 trillion US dollars per year over the same period. This shows once again that the issue is not a lack of money – but its uneven and unjust distribution, and funding continues to flow in the wrong direction. 

The Global North has also consistently argued that the donor base should be expanded to include major emitters such as China and rich oil-producing countries, which have contributed their share to global emissions over the last 30 years. This could certainly be discussed, but not as long as the Global North is constantly trying to dodge and obscure its own historical responsibility and not paying its own financial share.

No deal is better than a bad deal

But the far-too-low figure, the so-called “quantum”, is only part of the problem. The other big issue is the very weak language on who should provide the finance and in what way – this is the so-called “quality” of the climate finance target. 

Reaffirms, in this context, Article 9 of the Paris Agreement and decides to set a goal, in extension of the goal referred to in paragraph 53 of decision 1/CP.21, with developed country Parties taking the lead, of at least USD 300 billion per year 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) In the context of meaningful and ambitious mitigation and adaptation action, and transparency in implementation;

(c) Recognizing the voluntary intention of Parties to count all climate-related outflows from and climate-related finance mobilized by multilateral development banks towards achievement of the goal set forth in this paragraph;

Source: New collective quantified goal on climate finance, COP29, November 24, 2024 

The wording of the goal is vague and noncommittal: the global North (in the text: “developed country Parties”) should take the lead – but exactly what is expected of them remains unclear. Financing is to come from a range of sources: public and private sectors, bilaterally between states or through multilateral development banks. None of these formulations imply any clear obligation for the countries of the Global North to provide climate finance the form that is actually needed:    as public provision, in the form of grants and not as loans that exacerbate the critical debt situation many poor countries struggle with already. What is also missing: financial commitments for loss and damage, a clear financial sub-target for adaptation to the climate crisis, minimum allocation floors for the most vulnerable states – the Least Developed Countries (LDCs) and Small Island Developing States (SIDS) – as well as reliable access to these funds for affected communities on the ground, above all, marginalised groups. 

Until the very end, international civil society in Baku maintained that “No deal is better than a bad deal”: it was better to leave COP29 with no deal than to agree on an inadequate, unjust international finance goal for ten years into the future. And yet that is exactly what happened: the outcome actively undermines climate justice and solidarity by effectively terminating the Global North's payment obligation to the Global South – and this will have serious political repercussions. 

NDCs and phasing out fossil fuels 

The climate finance discussion was clearly linked to the next round of Nationally Determined Contributions (NDCs), which all countries are expected to submit in 2025 – this is provided for in the Paris Agreement as a mechanism for raising ambition. However, many of the countries of the Global South have made parts of their NDCs conditional on receiving appropriate financing from the Global North. This will not be feasible with the agreed climate finance target – and so the Global North's refusal to pay up for its climate debt to the Global South compromises the entire global effort to contain the climate crisis. 

At COP30 in Brazil, the new round of NDCs and the collective future path these NDCs place the world on will play a major role – which means that COP29 certainly does not mark the end of the debate on what is needed and appropriate in terms of global climate finance. 

The question of phasing out fossil fuels will also have to be addressed again. At COP28 in Dubai, after a full 32 years of climate negotiations, it was agreed for the first time that a phase-out of fossil fuels is necessary. In addition, the goal of tripling renewables and doubling energy efficiency was set. Although these resolutions are just about one year old, they were immediately pushed back against in Baku. Saudi Arabia made it clear that it would not tolerate any explicit language on a fossil fuel phase-out. A similar agenda was pursued in numerous other international negotiations and gatherings this year. As a result, the final COP29 document on this topic only refers to paragraph 28 of last year's decision – this is the paragraph that contains the aforementioned elements on phasing out fossil fuels and expanding renewables from COP28 in Dubai. 

Another round of false solutions: international carbon markets 

In order to secure an early “success” at COP29, the controversial carbon market mechanisms under the Paris Agreement were pushed through on the first day of COP. Within the framework of these carbon markets, governments and companies will be able to buy and sell CO₂ certificates and thus supposedly offset their emissions. 

However, the rules agreed in Baku for international carbon markets and emissions trading between countries are so weak and insufficient that they create significant new loopholes for the fossil fuel industry and high-emitting countries. Regulation of these carbon market mechanisms under the Paris Agreement will be worse than on the voluntary carbon markets – which does not bode well: Recently, the Guardian revealed that more than 90 percent of the rainforest certificates traded were nothing but “phantom certificates”. Thus, these carbon markets are primarily trading hot air, which in turn only exacerbates the climate crisis: Fossil fuel emissions are offset with poor or even fake climate certificates – but only on paper. In reality, such schemes fuel the climate crisis and at the same time many of these projects result in harm for people and ecosystems. 

However, the lessons of the past have by no means been learned, and so the false solution of carbon markets (which had actually largely discredited itself in recent years) is now being given a new lease of life under the Paris Agreement. 

Carbon trading: Soon to include geoengineering credits?

To make matters worse, on top of these already flawed carbon markets, so-called “carbon removals” are to be traded in them in the future, meaning CO₂ removal from the atmosphere. It is still largely unclear which approaches will be included. Afforestation and reforestation projects will almost certainly be included, as it was already agreed at COP29 that legacy afforestation and reforestation projects from the earlier CO₂ trading mechanism, the Clean Development Mechanism, can transition to the new carbon market under the Paris Agreement. However, it is not unlikely that geoengineering technologies – the large-scale technological removal of CO₂ from the atmosphere, which carries serious environmental and social risks – will also be made eligible. 

Further work and clarification on which approaches will and will not fall under “carbon removals” will likely be carried out next year – it will be important to keep a close eye on the work of the Article 6.4 Supervisory Body. As recently as October 2024, the Parties to the UNFCCC's sister convention, the UN Convention on Biological Diversity (UN CBD), reaffirmed the moratorium on climate-related geoengineering that has been in place since 2010 and urged governments to implement it. It is essential that the UNFCCC does not work against the precaution clearly called for by the UN CBD, thereby exacerbating the climate crisis and global biodiversity loss with the false solutions and dangerous distractions.