Finance and mitigation divide stalls progress at COP29 in Baku
As the climate conference COP29 in Baku draws to a close, developed and developing nations remain divided over climate finance and mitigation. The latest negotiating drafts of the New Collective Quantified Goal (NCQG) for Climate Finance, the Mitigation Work Programme (MWP), Article 6 addressing the carbon market, and other policy frameworks were released on the morning of November 21, the penultimate day of the conference. The plenary discussions that followed were dotted with disagreements. Developing countries criticised the NCQG draft – the framework to set a new target for climate finance – for not clearly defining the amount of climate finance from developed to developing countries. Meanwhile, developed countries expressed frustration over the MWP, aimed at scaling up mitigation ambition and implementation, for not being ambitious enough to meet the Paris Agreement’s 1.5°C target. “The clock is ticking,” said UN Secretary-General António Guterres, urging delegates to rise above their differences. “Failure is not an option,” he said, emphasising that there needs to be “an agreement on an ambitious new climate finance goal in Baku.” Where is the money? The latest 10-page NCQG draft, released on November 21 morning, misses any mention of a concrete climate finance goal. Developed countries have not committed to a figure and the draft excludes the proposal from developing nations, too, which called for $1.3 trillion in annual climate finance, with $600 billion as grants or grant-equivalents. Developed nations push for ambitious mitigation targets Both developed and developing countries have criticised the latest draft of the MWP, with developed countries arguing that it is not ambitious enough to meet the Paris Agreement’s 1.5°C goal while developing countries call it a diversion from the Paris Agreement that asks for voluntary action, referring to the elements from the Global Stocktake (GST) that have been included in the latest draft of the MWP, released a day before the closing of COP29. During the agenda-setting phase, several nations, particularly developing countries, expressed concerns over selectively using elements from the GST in the MWP, asserting that it was intended to be voluntary and non-prescriptive, allowing countries to set targets based on their local circumstances. The GST, agreed upon in at the COP Dubai in 2023, calls for ramping up global climate efforts, such as tripling renewable energy capacity by 2030, phasing down unabated coal power, reducing methane emissions by 2030, and phasing out inefficient fossil fuel subsidies. However, there has been no consensus among parties on these measures. For instance, India and China have distanced themselves from the Global Methane Pledge to cut methane emissions by 30% by 2030. Under GST, while countries are not legally required to meet these goals, the stocktake holds them accountable by evaluating their progress and encouraging greater ambition in future climate actions through updated Nationally Determined Contributions (NDCs). The latest MWP draft, released on November 21, is an improvement on the earlier draft that asked for compulsory measures but still mentions GST, though with several dilutions. This has drawn sharp criticism from developed nations, including Switzerland and the United States that say the proposed measures lack sufficient ambition to keep global warming within the 1.5°C threshold. Developing nations, however, maintain their position of voluntary mitigation while focussing on finance. Iran’s delegates reiterated that the MWP’s mandate is clear—it should remain non-punitive and non-prescriptive. India’s Environment Secretary, Leena Nandan, also emphasised this point, calling for the removal of GST references from the MWP draft. “We cannot accept any attempts to deflect the focus again from finance to repeated emphasis on mitigation,” Nandan said. “When the time has come to ensure that mitigation actions are supported with adequate finance in line with CBDR-RC (Common But Differentiated Responsibilities and Respective Capabilities) and equity, the narrative is being diverted. This COP started with a focus on enablement through NCQG. But as we move towards the end, we see a shifting of the focus to mitigation.”Frustrations were rife at the plenary. South Africa emphasised that achieving the Paris Agreement’s 1.5°C target is impossible without adequate funding. Panama’s delegate said, “After three years of discussion, we still have no money at the table from developed countries.” The NCQG is being discussed since 2021. The other concerns with the draft are the two pathways presented by ministers for consideration and approval. The first option suggests expanding the contributor base to include willing developing countries, though their voluntary contributions won’t be accounted for in the NCQG. The draft also proposes developed nations share the cost burden based on historical emissions and GDP per capita, with a part of this finance delivered as grants. Experts note that this option aligns more closely with developing countries’ demands. The second option proposes scaling up global climate finance from all sources, including domestic resources and proposes innovative financial mechanisms such as debt-for-climate swaps, green bonds, and hybrid capital. However, critics, such as Avantika Goswami, programme manager of climate change at the Centre for Science and Environment (CSE), argue that this approach reframes the NCQG as an investment goal rather than a commitment to climate justice. India’s Environment Secretary, Leena Nandan, strongly opposed the NQCG draft in her plenary intervention, where she stated, “Expanding the contributor base, introducing conditionalities like macroeconomic and fiscal measures, carbon pricing, and reliance on private sector investments contradict the mandate for the NCQG. Climate finance is not an investment goal.”