The COP29 Mess: Why We Should Not Be Surprised

Prof. Syed Munir Khasru

Australian Institute of International Affairs
December 4, 2024

Link: https://www.internationalaffairs.org.au/australianoutlook/the-cop29-mess-why-we-should-not-be-surprised/

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The COP29 negotiations in Baku concluded amid walkouts, protests, and an all-too-familiar sense of frustration over unfulfilled climate finance promises. This year’s summit revealed deep-seated issues in mobilising adequate resources for climate action, particularly for developing nations.

 A familiar shortfall in climate finance

Developed countries’ inability to meet their longstanding climate finance pledges reflects structural flaws within the COP framework. The much-celebrated US$100 billion annual commitment that was agreed upon at COP15 in 2009 was only realised in 2022, years past its deadline. Even then, nearly 70 percent of this amount was once again provided as loans. In Africa, up to 80 percent of adaptation financing is sourced from loans or government budgets. 

At COP29, wealthy nations pledged to raise $300 billion annually by 2035. While this marks an increase from previous targets, it is still far below the $1.3 trillion required to mitigate and adapt to climate change effectively. Meanwhile, vulnerable nations such as small island states face climate-induced damages amounting to five to ten percent of their GDP annually. The Group of 77 (G77) has requested $600 billion, with developing countries collectively demanding up to $900 billion in public funding, to address the escalating climate crisis. This highlights a discrepancy between the plans of wealthier nations and the urgent financial needs of the most vulnerable countries.  

The reliance on loans for climate financing exacerbates economic challenges for vulnerable nations. Over the past decade, climate-related debt for least developed countries and small island states has grown exponentially, leaving many nations in a vicious cycle of repayments that consume resources meant for adaptation and resilience. This financial burden intensifies inequities between the Global North and the Global South, undermining the very principle of climate justice. 

Missed opportunities to address fossil fuel subsidies

One of the most glaring failures at COP29 was the lack of progress in redirecting fossil fuel subsidies toward climate finance. Global fossil fuel subsidies currently amount to over $1 trillion annually, while investments in fossil fuel infrastructure continue to rise. These funds could be repurposed to bridge the climate finance gap and support the transition to renewable energy, but the political will to make this shift remains absent.

Despite growing calls from civil society and developing nations, COP29 negotiators failed to deliver a meaningful framework for phasing out subsidies. Wealthy nations continued to focus on private-sector financing and market-driven solutions, which have repeatedly fallen short of addressing the needs of the most vulnerable. This reluctance to tackle fossil fuel dependence reveals the entrenched influence of powerful lobbies that prioritise short-term profits over long-term planetary health. 

Urban and sectoral gaps in climate finance

Urbanisation and sectoral emissions were key themes at COP29, with cities accounting for nearly 80 percent of global energy consumption and over 60 percent of greenhouse gas emissions. The Multisectoral Actions Pathways Declaration emphasised sustainable urban planning and cross-sectoral collaboration, yet it lacked enforceable mechanisms or dedicated funding. As a result, cities in developing countries remain underfunded, unable to implement the infrastructure and resilience measures necessary to adapt to climate impacts. 

Similarly, sectors such as transportation and tourism, which contribute significantly to global emissions, were highlighted without sufficient financial commitments. The Declaration on Enhanced Action in Tourism recognised the need for sustainability but failed to outline practical steps or allocate resources to achieve these goals. The absence of clear financial pathways undermines the potential impact of these sectoral initiatives, leaving many ambitious plans stalled at the conceptual stage. 

A path forward for climate finance

The failures of COP29 indicate the urgent need for systemic reform in how climate finance is mobilised and distributed. Public finance from wealthy nations must increase substantially, with a focus on grants rather than loans to avoid exacerbating debt burdens in developing countries. Adaptation and loss-and-damage funding should be prioritised, ensuring that resources reach the most vulnerable communities without delay. 

Innovative mechanisms such as redirecting fossil fuel subsidies and climate debt swaps can unlock additional funds. Proposals like the Bridgetown Initiative offer practical roadmaps for reorienting global financial systems toward equity and sustainability. Multilateral development banks also have a critical role to play, and their climate financing must be significantly scaled up by 2030 to meet global needs. 

Access to climate finance must also be streamlined for developing nations. Lengthy bureaucratic processes and restrictive conditions have long hindered the effective use of pledged funds. Simplifying access and ensuring transparency can empower vulnerable nations to implement climate strategies more effectively.

Likewise, private-sector involvement remains crucial but must be guided by public oversight to align investments with equity and justice. Additionally, blended finance models can complement public funding, but they must prioritise high-impact projects in renewable energy, sustainable agriculture, and other critical sectors. 

A more accountable future for global climate action

The outcomes of COP29 imply that the existing approach to climate finance is inadequate to address the escalating crisis. An annual fund of $300 billion may partially work if the funds are disbursed on time and in full amount. That, too, if the funds were mobilised as grants, not loans. The reliance on incremental pledges, loans, and voluntary commitments reflects a lack of ambition and a failure to understand the scale of the challenge.

For COP30 to succeed, the international community must embrace transformative changes. Climate finance must become the cornerstone of a more equitable and effective global response, one that prioritises the needs of the most vulnerable while holding wealthy nations accountable for their historical emissions. The world cannot afford another cycle of unmet promises and missed opportunities. It is time for a new vision. One that puts justice, urgency, and accountability at the heart of climate action.