By Dr Satyendra Prasad, Senior Fellow – Carnegie Endowment for International Peace and Climate Lead for Abt-Global
Pacific’s leaders, civil society, climate activists are traveling to Baku in Azerbaijan for the annual UN Climate Conference – COP29. All climate COP’s matter for Fiji and all the small states of the Pacific. This one matters perhaps like no other since the Paris Treaty was agreed to at COP21.
World leaders and the international climate community are meeting against a backdrop of growing frustration by island states of the Pacific on insufficient levels of climate finance flowing through. PNG’s Prime Minister, Hon Marape has gone even further. He is choosing to stay away from COP altogether because of this growing frustration.
COP29 is being held against the backdrop of uncertainties associated with Trump 2.0 Administration assuming office in January 2025 – a few months after COP29 in Baku.
There are many things at play in COP 29 which Pacific’s negotiators will wrestle with. The most significant of this by far will be seeking agreement on a new framework for funding the response to climate change across the Global South.
Finance that matches needs
The means through which the developing countries – countries of the Global South are to implement the agreements and ambition arising from the Paris Climate Treaty is finance. Parties to the Convention need to agree to a new goal on finance that is needed for this. As with many things multilateral this is referred somewhat “clunkingly” as the New Collective Quantified Goal (NCQG).
What is this finance needed to fund the response to climate change? We have an ad hoc framework today where $100 billion annually is the agreed figure. Developed countries are barely providing this level of financing – shared between all developing countries -from South Africa to Indonesia to Tuvalu. Of course small states lose out in this competition.
Small states groupings at the UN estimate that the climate finance that is needed should be well above $1 trillion per annum. Developing states as a group pitch this at a higher level and closer to $5 Trillion.
So the rich and poor countries, large polluting states and zero polluting states, fossil fuel based countries and renewable based countries need to agree to a figure for climate finance. They will need as well to agree on how this these funds are to be made available. Pacific’s ministers and negotiators are in for a difficult fight.
Finance that is reachable
Even if agreement on a new financing framework is secured, as I hope it will be, a key question for Pacific island states is to ensure climate finance is reachable by their communities, by their governments and by the Pacific’s private sector far more easily than it has been to date.
Much of the early climate finance has been locked into titanium-framed solid bureaucratic procedures that puts them well out of reach of our Governments and communities on the frontlines of climate change.
More of the same will be a death sentence to many island states. A sea-change is needed. COP29 can deliver on this. This will involve long hours of conversations by leaders. Organisations like the GCF, the World Bank and development partners will need to implement agreed changes rapidly after they return from Baku. With a good Pacific influencing and negotiating scripts – this is very doable.
Finance that is additional
Often, new financial pledges made by rich countries are simply a repackaging of existing resources. In some countries, this may come from a redeployment of their overseas development assistance (ODA). This is deceitful.
Developing countries and small states, especially, face growing development needs. They are falling futher behind in their SDG’s. The aid budgets that they have access to has already been very restrictive for several years. To take away money from health, education, social services and repurpose it for funding responses to climate change has to be unacceptable. Climate finance needs to be additional to ODA.
Finance that works for small states
Pacific, Caribbean and Indian Ocean small state leaders have their work cut out on this. Small states face unique disadvantages. They may have talented people across their civil service – but they need many many more to design new programs and take charge of shaping financing arrangements. Often the smaller scale of programs proposed by island states are too small for consideration by large funding agencies.
Getting past bureaucratic loops to access climate finance is relatively easy for large countries such as India and Bangladesh. They are too cumbersome for small states that are often living from one climate crisis to next. For such countries, the design, approval and programme commencement should shrink to 6 months or even less – not the present 2-3 years. There should be more space for community focussed small programs – below the $5 million threshold. There should be expanded grant financing components when Governments take concessional climate loans.
In securing outcomes that work for small states, they are often pitched against fellow developing countries who do not share these perspectives. Getting broader consensus for acceptance of the unique challenges that small states face is getting harder – not easier.
Finance that is affordable
Given the scale of financing needed, a lot of action will be on how to bring private finance into the climate space. There is much happening already – even across the Pacific. The scale of finance that the Pacific Island states need is many multiples of what they have access to presently. Between now and 2030, they need to be executing multiple programs in climate start agriculture, in climate proofing their health and education infrastructure, in rebuilding ports, airstrips and airports, enhancing water security at speed. Leave these too late – the costs will escalate.
Across the small states of the Pacific, between now and 2030 this will mean that climate change focussed investment needs will be closer to the $4-5 billion mark. Private sector investments are needed – but they will need to be on terms that are affordable. Operationalising new and innovative financing instruments that keep the cost of finance low and affordable will need to be a far greater part of the conversations in Baku.
Urging USA to continue its support for building climate resilience
There is much anxiety about what US Presidential election outcome means for COP 29 and for progress on climate change. I cannot predict what will or will not happen.
But it is clear as Labasa sunshine to me that Elon Musk will seek to expand Tesla EV vehicles market presence across the World. It is clear that U.S foundations such as Bezos’s Earth Fund will continue to support the Pacific’s ocean-climate-nature ambitions.
There is no reason to think that the U.S Government will not support the expansion of US businesses in the global climate economy – investing in renewables across the World, helping to climate proof agriculture and in building climate resilient infrastructure across the World. The commerce of climate change is likely to become the largest business in the World.
The U.S also will compete for this business. Whether this competition is from inside the tent of the international COP process or from outside that tent is a sovereign U.S decision. A message Pacific’s leaders would do well to communicate unambiguously to the U.S would be that being inside the global climate tent is so fundamentally in the USA’s own self interest.
Urgency at the cliff-edge
In Baku, it may seem that the World is against the Blue Pacific. It will seem to our negotiators, our civil society, our leaders that we are in the wrong in our asks of the global community. We will be made out to be deal breakers. Negotiations will be pushed into the overtime zone.
But Pacific Islanders at COP29 will know how much their communities back home – in Palau, on the highlands of Enga Province, across the atolls on Kiribati depend on them succeeding. They are remembered in prayers. They have the solidarity of millions across countries that they may be pitched against.
There is nothing grey in the universe of climate finance at this stage being so close to losing the fight to stay within 1.5 Celsius temperature increase. The call by Pacific for climate finance that is specific to small states, that has sufficient scale, that is available on speed is just and right.
This is such a high stake COP. The global backdrop is so challenging. The risks of not securing a strong outcome are so high. I extend my best wishes to teams from across the Blue Pacific at COP29.
Dr Satyendra Prasad is a Non Resident Senior Fellow at Carnegie Endowment for International Peace and the Climate Lead for Abt Global. He is Fiji’s former Ambassador to the UN in New York.
