After intense negotiations spanning two weeks, the 29th UN Climate Change Conference (COP29) in Baku reached a consensus on a new collective quantified goal (NCQG) for climate finance. However, the agreement left developing nations deeply dissatisfied. The pledged figure of $300 billion annually by 2035 is far from the estimated $1.3 trillion needed to effectively address the climate crisis. This significant funding shortfall highlights the gap between the financial commitments of developed countries and the actual resources required by developing nations to combat and adapt to climate change.
Financial Burden on Developing Countries: $5.1 Trillion to $6.8 Trillion Needed by 2030
The Standing Committee on Finance at COP29 acknowledged the immense financial burden on developing nations. Their Nationally Determined Contributions (NDCs), which outline climate action plans, are projected to cost between $5.1 trillion and $6.8 trillion until 2030, requiring annual expenditures of $455 billion to $584 billion. Additionally, adaptation finance needs are estimated at $215 billion to $387 billion annually until 2030, further emphasizing the insufficiency of the $300 billion commitment.
Suryaprabha Sadasivan, Senior Vice President at Chase India, criticized the NCQG for relying heavily on loans and private capital, which could exacerbate the debt burdens of developing nations. She warned that this approach risks shifting the responsibility for climate action onto those least able to handle it, as it offers limited grants or low-cost financing mechanisms.
Insufficient Climate Finance Commitments
The NCQG refers to the financial obligations of developed countries to support climate action in developing nations. The funding is crucial to help them transition away from fossil fuels, reduce greenhouse gas emissions, and adapt to climate impacts. However, the current financing pledge is far below the necessary amount for developing countries to enhance their climate ambitions. These nations are required to submit updated NDCs by 2025, but the lack of predictable and substantial financing hinders their ability to scale up efforts.
UN Secretary-General António Guterres underscored the urgency of climate finance, stating, “COP29 comes at the close of a brutal year—marked by record temperatures and climate disasters—all while emissions continue to rise. Developing nations, overwhelmed by debt and climate disasters, are in desperate need of funding.”
Criticism and Walkouts at COP29
The COP29 final draft mandates that developed countries mobilize at least $300 billion annually by 2035, recommending a mix of public and private, bilateral and multilateral, and alternative funding sources. However, many experts, including Vaibhav Chaturvedi of the Council on Energy, Environment and Water (CEEW), criticized the outcome, calling it “the final nail in the coffin of 1.5°C.” He warned that accelerating mitigation actions without adequate financing is an unrealistic goal.
The decision sparked walkouts by several developing nations, including India and Cuba, who protested the insufficient agreement. Sehr Raheja, Programme Officer at the Centre for Science and Environment (CSE), expressed widespread disappointment, stating, “The developed countries have completely let down the Global South.”
Concerns Over Financing and Accountability
The criticisms of the NCQG include the inadequate financial pledge, the absence of clear targets for mitigation, adaptation, and loss and damage, and the extended 10-year timeline for reaching $300 billion by 2035. Additionally, the agreement lacks provisions for revising the target every five years, which some experts believe will hinder long-term climate goals. Manish Shrivastva, Senior Fellow at the Energy and Resources Institute (TERI), emphasized the growing gap in climate finance needs and questioned the long-term effectiveness of the $300 billion pledge.
In addition to climate finance, COP29 also advanced standards for a centralized carbon market under the UN, aimed at reducing carbon emissions through carbon trading. However, Abinash Mohanty, a climate change expert and IPCC-AR6 reviewer, raised concerns about the lack of robust oversight, which could allow for loopholes and undermine the market’s effectiveness.
Impact on India and Global Climate Action
In India, the COP29 outcomes could influence adaptation-mitigation projects, potentially accelerating the integration of nature-based solutions. However, the lack of substantial and accountable financing from COP29 undermines these prospects. The overall sentiment reflects deep concern over the future of global climate action, underscoring the need for stronger and more reliable financial commitments from developed countries.
