On November 11th, the United Nations Climate Change Conference COP29 began. The President of Azerbaijan, Ilham Aliyev, opened the conference with a strong criticism of Western countries, accusing them of purchasing Azeri gas while condemning its fuel-powered economy. Dubbed the “Finance COP”, COP29’s key aim is to unite 198 parties to set a new global climate finance target. The primary focus shall be on finance flows from the Global North to support the push for climate ambitions in the Global South. However, a significant challenge has become visible in the achievement of the goal, as only 80 state leaders have attended. The most populous countries, and those with the highest role in climate degradation, including the United States, China, India, Canada, Japan, France and Germany have sent no leaders to the talks. By the second day, leaders from African, Central Asian and island nations have placed the spotlight on the alarmingly detrimental consequences of global warming on their people and lands. The President of the Maldives scrutinized the hypocrisy of the large waves of finance given to conflicts around the globe, which are withdrawn in the face of climate adaptation.
Building on the goal of setting a new climate finance target, discussions at COP29 highlight the inadequacy of the previous $100 billion annual commitment set in 2009, which was only reached in 2022, two years after the deadline. As Professor Weikmans argues, it was a symbolic figure without a scientific justification, intended merely to get developing countries to sign the Copenhagen Accord. However, estimates suggest that developing countries require at least five times the current commitment, with current financing gaps projected to reach nearly US$ 400 trillion. At its core, the discussions concern the issue of equity between the postindustrial countries in the Global North, and developing economies of the Global South. A key point of dispute is the question of who has contributed the most to greenhouse gas emissions, and thus who should finance climate mitigation and adaptation. Historically, the United States has been the largest emitter, responsible for 25% of global emissions, followed by the EU and UK with 22%, and China with 12.7%. In comparison, countries like India (3%), Brazil (0.9%), as well as the entire African continent (3%) have contributed relatively little despite their large populations.
Amongst the developing economies of the Global South, climate justice largely corresponds with climate financing to aid the climate transition. In Latin America, this refers to the environmental and ecological debt that is believed to be owed by developed economies of the Global North to adapt and remedy the effects of climate change that have manifested. In Africa, where fossil fuels account for over half of the continent’s GDP and 70% of its exports, transitioning away from hydrocarbons may lead to economic losses. Thus, for these regions, any immediate or far-reaching mitigation targets cannot be implemented without addressing the injustice through financing or compensation. Yet, the Global North has been called upon to fulfil financial pledges, including the $100 billion annual commitment. According to the OECD, the amount actually reaching developing countries in 2019 was only $80 billion. India, for example, has raised issues with the skewed funding which results in the bulk (over 90%) of the financing to be spent on climate mitigation, while the main concern for developing countries is climate adaptation. Global carbon pricing draws criticism in that it also tends to treat essential emissions like electricity generation for consumption in households that cannot afford renewable energy as equal to emissions by private corporations, and thus fails to allocate rights justly between the developed and developing.
Countries in the Global South further take issue with the fact that they are being made to eschew fossil fuels on their development path, which is a challenge that the Global North never had to face. This is heightened as the financial support and capacity building from the latter are lacking. Many countries have come to COP29 with a number previously decided, as Arab countries call for a funding target of $1.1 trillion per year, of which $441 billion must directly be grants from developed country governments. $1 trillion has been the amount agreed upon also by others such as India, some African countries and island nations, but disagreement remains on how much should come from governments with heavy coffers. While both the US and the EU agree that the new target must exceed the previous $100 billion, no firm commitments have been made. The question of who must pay the newly set target has also been controversial at the COP29, as many countries are reluctant to confirm their payment targets until it becomes clear who else will contribute. A multi-layered financing approach has been suggested, combining state funding with contributions from non-state actors, such as multilateral lending institutions and private investors. However, Trump’s re-election in 2024 stands as the elephant in the room as it is expected that US climate finance contributions will be halted under his administration, thus leaving a large void that other donors will struggle to fill. As of 2023, the US provided nearly $10 billion in climate finance, in comparison to the $31 billion contribution by the EU.
As it stands, only a couple dozen countries from the Global North are obliged to pay the UN target, while demands grow for fast-developing states such as China and Gulf Oil states to contribute as well. Beijing has opposed such calls, arguing that it lacks the historical responsibility of the long-industrialized countries like Britain and the US, and that while it invests hundreds of billions of dollars on electrical vehicles and renewable energy internationally, it does so on its own terms. Debates are ongoing about the “burden sharing principles” to determine who would pay and how it must be distributed. Based on the polluter must pay argument, historical emitters must carry the burden, however when prioritizing those that have the ability to pay, wealthier nations with smaller populations such as Liechtenstein or Qatar would be obliged to pay. Developing countries reject these demands, arguing that the Paris Agreement mandates responsibility only for developed nations. This has led to clashes between longtime wealthy states and newer global powers like China and Saudi Arabia. Proposals, such as using numerical standards to determine financial contributions, have been firmly rejected by representatives from Arab, Chinese, and multiple island states.
As negotiations continue, it remains of paramount importance to not only increase the amount of climate financing, but also to ensure that the funding is streamlined in an effective manner towards projects that are necessary and within the right time frame. The financial gap between the Global North and South in climate mitigation and adaptation while balancing the need for economic development for the latter looms over the discussions.
