When a negotiation consists of one side asking for money and the other offering it, there’s not really much doubt who has the whip hand.
And so it proved in Baku, Azerbaijan, on the final day of the UN climate conference COP29. At 5pm on Saturday (as usual, the day after the scheduled close), the poorest and most climate-vulnerable nations walked out of the negotiations. The sum they were being offered by rich countries was an insult, they said, and would leave them defenceless in the face of ever more severe climate impacts. They could not accept it.
Nine and a half hours later they accepted it. The alternative, as it had been all along, was not that they would get more money, but that they would get less. With Donald Trump about to enter the White House, next year had no chance of being better. In fact it would be a lot worse. Outside the plenary hall the small number of NGO protestors allowed in by the Azerbaijani authorities were chanting “No deal is better than a bad deal!” But it clearly wasn’t.
COP29 had been billed as the “finance COP,” and two major issues were up for negotiation. One was “carbon markets,” the system under which countries and companies can buy credits from developing nations to meet their emissions-reduction targets in place of reductions they make themselves. The 2015 Paris agreement allowed the possibility of such credits. But anxiety about their environmental integrity and social impact had prevented an official system being created. (When an airline claims that it has paid for some trees to be planted in Africa to offset its aircraft emissions, what does this mean on the ground — and in the atmosphere?)
After nine years of negotiations, though, COP29 finally came to an agreement, and an estimated US$10–40 billion carbon market will soon be in prospect. It will certainly make it cheaper for the airlines and other companies, and developing countries hope it will provide them with new sources of finance for afforestation projects and technologies such as renewable cookstoves in rural areas.
But the issue that was always going to dominate the endgame in Baku was the money provided directly by rich-country governments. That such money is owed was first agreed in the 1992 UN Framework Convention on Climate Change, which established the multilateral climate regime. Developed countries had caused (and were still causing) climate change, through the carbon dioxide and other greenhouse gases their economies had emitted since industrialisation. But the severest impacts of rising temperatures were going to occur in the tropical areas of the post-colonial global South. So justice demanded that the developed countries pay the developing ones to help them decarbonise and adapt to the already changing climate.
But how much? In 2009, at the ill-fated COP15 in Copenhagen, the developed countries said they would pay US$100 billion a year by 2020. They did not negotiate this number, they simply committed to it, and it was subsequently included in the Paris agreement. But this wasn’t just for public funds: the number also included the private sector finance that such funds “mobilised,” for example when public funding for a renewable energy project is used to reduce the risk for, and therefore to attract, private capital. Since such capital tends to flow only to richer “middle income” countries such as India and Brazil, this has long been a bone of contention for poorer developing nations.
In accordance with their commitment, developed countries did ramp up their financing after 2009, but didn’t quite reach the $100 billion goal in 2020, causing more resentment. By the time they did get there, in 2023, any gratitude for their largesse had run out — and so had the commitment. A “New Collective Quantified Goal,” or NCQG, had to be negotiated to start from 2025.
By the time countries arrived in Baku a fortnight ago, they had spent three years discussing what the amount and the scope of the new sum should be. But they had made very little progress. Developing countries cited the official UN estimate that decarbonising their economies, and adapting to increasingly severe climate impacts, would cost them up to $950 billion a year by 2030. Other estimates were higher. So they came to the conference demanding that developed countries provide $1.3 trillion per year in grant-based funding, by 2030 or 2035.
This was never going to happen. Developed countries insist they face tight budgetary constraints, with their citizens complaining about the cost of living and in many cases turning to right-wing parties opposed not only to climate policy but also to providing any form of foreign aid. The developed countries refused to say exactly how much they would offer, for fear of being bargained upwards under months of pressure; but it was obviously nothing like US$1.3 trillion.
And they wanted something in return. The 1992 convention insists that the responsibility to assist developing countries rests on the group of countries identified as “developed” at the time: those of Europe, North America, Japan, Australia and New Zealand. The Paris agreement “encouraged” richer developing countries to contribute too, but they didn’t share in the obligation.
For the new goal, the developed countries said the “contributor base” needed to be widened. This was no longer 1992. Large and rich “developing countries” — China, Saudi Arabia and the Gulf states, Singapore, South Korea — should be obliged too. The latter two countries had already quietly said OK, but China and the petro-states were holding out. Despite their evident interest in receiving more money, the legal principle was supported by the entire developing country bloc. (Chinese and Gulf state investment in their economies may also have had something to do with it.)
So how would this all play out in Baku? Badly, as it turned out. In a move that annoyed and frustrated almost all parties, the Azerbaijani presidency of the COP decided to try to stitch the deal together themselves rather than, as would normally happen, allow the country groups to negotiate directly with one another. A confused and disgruntled hiatus fell over the second week of the conference. “I’m waiting to negotiate!” complained one head of delegation in her morning media briefing as the presidency received submissions from parties and considered them on their own behind closed doors.
Australia’s Chris Bowen and other ministers who’d been asked to put different elements of the deal together protested that their work had often been ignored. Countries met one another in informal bilaterals and small groups but were at no time brought together to negotiate the key finance issues directly. By the time Azerbaijan issued what was meant to be its near-final agreement text on Friday, many hours of negotiating time had been lost. And no one was happy with its conclusions.
Indeed, there were dark mutterings about the outsize influence Saudi Arabia was having on the process. At every turn, delegates said, the Saudis were trying to block agreement, notably by deleting all references to fossil fuels (the topic of the big breakthrough at COP28 last year) but also by obstructing progress more generally. The Guardian revealed that one of the key negotiating texts produced by the presidency had been amended by the Saudis before being released. The German foreign minister Annalena Baerbock made her views clear. “We are in the midst of a geopolitical power play by a few fossil fuel states. We will not allow the most vulnerable… to be ripped off by the few rich fossil fuel emitters who have the backing, unfortunately, at this moment of the president [of COP29].”
As the conference went into extra time on Saturday, three major issues were still in dispute. First, the size of the new finance goal. By this point the developing countries had realised that they were not going to get US$1.3 trillion in firm commitments. So they had changed the nature of the target. If it couldn’t be guaranteed now, it should be the aspirational goal for 2035 instead. The developed countries swallowed hard and said yes, clearly hoping that future governments would do the aspiring.
Second, a clever — but slightly obscure — deal was reached between the United States and China on the contributor base. China continued to insist that anything it did was voluntary, not an obligation. But it was willing to have its contributions to spending by the World Bank and regional multilateral development banks “voluntarily” counted as part of the developed countries’ total.
Third and most contentious was the actual sum being committed by developed countries. To the fury of developing country delegates, they continued to hold this number back almost to the very end. When it was finally put on the table on Friday, the figure was $250 billion a year by 2035. “Is this a joke?” raged the chair of the least-developed countries group. Someone calculated that by 2035 the 2009 figure of US$100 billion might be worth after inflation a little under US$200 billion. In real terms this was not much of an increase at all. The anger was palpable. The number was rejected out of hand.
On Saturday afternoon a new text was issued. The developed countries had raised their offer to $300 billion. But that was the highest they could go. If they thought it was clever negotiating tactics to issue a low number late and then be pushed only a little bit upwards, they were wrong. $300 billion was nowhere near the “compromise” figure the developing countries had been expecting.
In what was meant to be the final plenary, all of those countries said $500 billion was the minimum they could accept. The small island developing states, or SIDS, and the least developed countries, or LDCs complained that their specific demand — to have a proportion of the funds reserved for them, the poorest and most climate-vulnerable countries — had been ignored altogether. And then they stood up and walked out.
The meeting was adjourned. The developing countries were furious. The talks looked as if they would collapse. The gap between the parties was surely too large, and the time in which to bridge it too short. This was already Saturday evening, and many delegates had flights booked for the early hours on Sunday. If enough left, the meeting would not be quorate.
Experienced hands started suggesting that the whole conference could be adjourned and reconvened in January before Biden left office, when tempers would have cooled and maybe the developed countries would have had time to raise their offer. The media were thrilled. “Talks in crisis!” they gratefully filed.
The presidency asked parties to come together. How could the gap be bridged? The developed countries insisted they could not increase their $300 billion offer. This had been negotiated with their finance ministries and another negotiation at this hour was impossible. They were asked if it could be “at least $300 billion.” Not possible, they said.
Colombia’s outspoken environment minister Susana Muhamad got together with Ali Mohamed, Kenya’s climate envoy and chair of the African group. They proposed a “roadmap” to get from the $300 billion commitment to the $1.3 trillion aspiration: a concrete plan that could give them confidence that the developed countries were serious about the latter. We could accept a “work programme,” responded the EU.
The LDCs and SIDS demanded that their reserved proportion of finance had to go in. The other developing countries, anxious not to limit their own access to the money, said no.
Hours passed. At half past midnight delegates, media and NGO observers still standing were called back to the plenary hall. Some minor decisions were approved. The meeting was adjourned. Ministers and negotiators gathered urgently in huddles on stage to examine and fine-tune new text. It looked like an agreement might be close. Then it didn’t.
Finally, at 2.30am, the chair called the conference to order. The presidency had published a new text on the NCQG. He invited the conference to consider the document. And then suddenly he said, “it is so decided” and brought his gavel down. There was a short, stunned silence, and then the room burst into applause. A deal had been done after all.
The new text revealed what had happened. The $300 billion number had become “at least $300 billion.” Countries had agreed to develop a roadmap to the $1.3 trillion. The SIDS and LDCs had not won their reserved proportion, but there was a new goal to triple the money going to specific UN climate funds aimed at them.
COPs do not end when agreement is reached. Countries are given the opportunity to make statements about the deal. The developing ones lined up to say how much they objected to it.
India declared that it had indeed tried to lodge a formal objection before the gavel but had been unconstitutionally ignored by the presidency. It was particularly angry about the clause on counting multilateral development bank flows that derived from developing countries’ capital. This was a clear breach of the UNFCCC principle that it was developed countries that had the obligation to provide finance. It was effectively an accounting trick to reduce the amount owed by the rich nations.
Panama’s special representative for climate change, Juan Carlos Monterrey Gomez, expressed the views of most the room. “1.5C [the UN’s target limit for global temperature rise] was at the intensive care unit,” he said. “It feels like the bed just broke and it fell on the floor. So we’re probably not going to be able to reach 1.5C based on this very low level of finance being provided by the developed world. That means death, that means misery, for our countries.”
He went on: “Developed nations always throw text at us at the last minute, shove it down our throat, and then, for the sake of multilateralism, we always have to accept it, otherwise the climate mechanisms will go into a horrible downward spiral… This is the only space that we have to negotiate and to work towards our common goals. We accepted the text because we could not leave Baku without a text. But we’re not satisfied whatsoever.”
Gomez’s impassioned remarks captured well the current political fragility of the UN climate regime. The spectre of Donald Trump hung heavy over the conference hall. Everyone came to Azerbaijan aware that he is not the only right-wing politician around the world who would be delighted if the multilateral process broke down. There’d no longer be any need to pass difficult decarbonisation policies at home. No more obligations to provide money to poorer countries overseas. By coming to an agreement, however bad, delegates had kept the COP regime alive.
In fact, it turns out that they have done more than that. They have given the next COP a purpose. COP30, to be held next year in Belem, Brazil, has been widely hailed as the “big one”: the “COP of COPs,” as Brazil’s environment minister, Marina Silva, described it, with all world leaders invited. This is because 2025 marks the next moment in the five-year Paris agreement cycle when countries must announce their new, stronger climate targets for 2035. These will tell us whether the world has got back on track to meet its internationally agreed climate goals.
Except this won’t, in fact, happen at the COP. Most larger countries will announce their “Nationally Determined Contributions,” or NDCs, by June or July next year. So we will know what they add up to in aggregate several months before COP30 even begins. And it is unfortunately the case that no one expects them remotely to add up to an emissions trajectory consistent with limiting warming to the UN’s 1.5C or even 2C goals. They will do well to be on track for 2.5C of warming.
And they will barely be discussed at COP30. The Paris regime does not allow for NDCs to be reviewed by other countries, let alone for them to be raised at a COP. The clue is in the name. National climate targets are the responsibility of each country, and it alone. A COP can ask countries as a whole to raise their ambition. But last time this happened, at the equivalent moment in 2021, only one subsequently did so. That was Australia, because it had held an election in the meantime and had a new, more climate-ambitious government.
So what is COP30 actually for? Two weeks ago, before the Baku meeting started, it looked like world leaders would be heading to Brazil to preside over the failure of the global climate regime — the moment when it became clear that 1.5C is out of reach, and 2C probably too. That did not look like something most would wish to do.
But now they have a reason to go. The “roadmap” to the $1.3 trillion goal adopted this week must be prepared, it says, in time for COP30. If leaders in Belem can agree on a realistic and ambitious pathway to over a trillion dollars of climate finance every year by 2035, they will have provided the means to raise the ambition level of the NDCs. We know, they will be able to say, that we are not on track to the 1.5C and 2C goals. But the new financial package we have agreed can help pay for more ambition in the future. We have not failed. A safe climate is still possible.
In this sense COP29 has performed half the job. It has kept the multilateral climate show on the road. World leaders will have to apply the brakes on global warming properly next year. •
