The COP29 Presidency Mukhtar Babayev early Thursday released a draft document intended to serve as the basis for a deal on a post-2025 goal for climate finance for developing countries.
As expected, the text leaves the most contentious issues undecided including who pays, how much and what the structure of the goal should be.
The text has two main options for how the goal would look: the first reflects developing-country preferences, and the second is what developed countries want to see.
Option one includes an annual goal starting from 2025 and running until 2035, while option two is a goal to be reached by 2035, giving wealthy nations longer to ramp up to meet it.
Option one says the finance would come from developed to developing countries – although it also accepts developing countries being “invite[d]” to provide finance “voluntarily” as long as this does not count towards the main goal.
Option two refers to the money coming from a “wide range of sources and instruments, including public, private and innovative sources, from bilateral and multilateral channels”.
It states that developed countries should take the lead but also includes “efforts of other countries with the economic capacity to contribute”, as well as accounting for current bilateral and multilateral efforts, and finance mobilised by all other climate finance providers.
Option one says the goal should include finance provided by developed countries’ governments as well as private finance mobililsed by developed countries’ governments. These are the same categories included in the current US$100-billion-a-year goal, which this goal will replace.
But option two includes a much broader array of finance including innovative sources. It does not specify – but these could be measures like taxes on plane tickets or financial transactions. The word “including” leaves this list of sources open-ended and there are fears this could allow developed countries to include money from carbon markets.
While option one would just have a provision and mobilisation goal, option two would have a mobilisation goal led by developed-country governments, as well as a bigger, broader investment goal.
While all governments agree that only developing countries should be eligible to receive the finance, the extent to which the world’s poorest countries (LDCs) and small island developing states (SIDS) should be prioritised is still not agreed.
LDCs and SIDS want an annual minimum of US$220bn and US$39bn respectively. But in the text, this has been left in square brackets, meaning it is not agreed. Alternative options are phrasing stressing the particular vulnerability of LDCs and SIDs and text that does not mention country groups but instead call for “equitable resource distribution”.
Joe Thwaites, a climate finance expert at the Natural Resources Defence Council said” the text caricatures developed and developing country positions on what the main goal should be. The Presidency needs to propose an option 3 that bridges the two.”
Harjeet Singh, a campaigner from the Fossil Fuel Non-Proliferation Treaty Initiative, said it included options that were good, bad and “some downright ugly”. He expressed concern that there are no sub-goals for cutting emissions, adapting to climate change and for the loss and damage caused by climate change.
Laurie van der Burg, Oil Change International’s global public finance manager, pointed to language that promotes scaling up climate finance from new sources and instruments including “high-integrity voluntary carbon markets”.
“Labelling carbon credits as climate finance – which they are unreservedly not – should be axed from the text or risk creating a dangerous escape route for polluters,” she said.
She also warned that, unlike previous drafts, this draft text does not have an option ruling out counting investments in fossil fuel infrastructure as part of climate finance. “This is fundamentally incompatible with the goals of the Paris Agreement,” Van der Burg noted.
The COP29 presidency said in a statement to media that it did not think presenting a wide range of numbers for the financial goal would have been useful in this version of the draft.
“The next iteration – to be released tonight – will be shorter and will contain numbers based on our view of possible landing zones for consensus,” it added.
As a plenary session – called a “Qurultay” according to local tradition – got underway for countries to give their views on the new texts, the Azeri presidency noted in its statement that COP29 is “now in the endgame”, adding “we believe that a breakthrough in Baku is in sight”.
It said the package of draft texts released this morning – including on issues from cutting emissions to adaptation and gender – had finance at the centre and contained options “to address the key concerns of all groups”.
“Everyone must engage with the texts and with each other so that they are ready to make the ambitious choices we all need,” the presidency added. Updated draft versions are expected on Thursday night.
UN Secretary-General Antonio Guterres told media on Thursday afternoon: “COP29 is now down to the wire.”
“I sense an appetite for agreement. Areas of convergence are coming into focus. But… many substantial differences are still remaining. Success is not yet guaranteed,” he said, calling for “a major push to get discussions over the finishing line”.
Failure is “not an option”, he added. “It might jeopardise both near-term action, and ambition in the preparation of the new national climate action plans, with potential devastating impacts as irreversible tipping points are getting closer.”
Speaking at the plenary, Wopke Hoekstra, the EU’s commissioner for climate action, urged the COP29 presidency to “step up the leadership” after expressing disappointment with a package of texts that he called “unworkable”.
On the new climate finance goal (NCQG), Hoekstra said “we are very far away” from what’s needed for an agreement. He reiterated the EU’s conviction that “everyone who can contribute” funding towards the goal, alongside developed countries – which experts interpret as a way to include China and wealthy Gulf states as donors.
Hoekstra added that public finance should go primarily to address adaptation efforts and to the most vulnerable nations.
Echoing the EU’s position on contributors, John Podesta, the U.S special advisor on climate change, said that making sure “all capable” countries pitch in towards the target is “an essential element of the package.
