Developing nations blast $300 billion COP29 climate deal as insufficient

By Kate Abnett, Valerie Volcovici and Karin Strohecker

BAKU (Reuters) -Countries at the COP29 summit in Baku adopted a $300 billion global finance target to help poorer nations cope with the impacts of climate change, a deal roundly criticized by its intended recipients as woefully insufficient.

The agreement, clinched in overtime at the two-week conference in Azerbaijan’s capital, was meant to provide momentum for international efforts to curb global warming in a year destined to be the hottest on record. Instead it left developing countries frustrated.

“I regret to say that this document is nothing more than an optical illusion,” Indian delegation representative Chandni Raina told the closing plenary session of the summit minutes after the deal was gavelled in. “This, in our opinion, will not address the enormity of the challenge we all face.”

United Nations climate chief Simon Steill acknowledged the two weeks of excruciating negotiations that led to the agreement, but hailed the outcome as an insurance policy for humanity.

“It has been a difficult journey, but we’ve delivered a deal,” Steill said. “This deal will keep the clean energy boom growing and protect billions of lives.”

“But like any insurance policy – it only works – if the premiums are paid in full, and on time.”

The agreement replaces rich countries’ previous commitment to provide $100 billion per year in climate finance – a goal that was met two years late, in 2022, and which expires in 2025.

The COP29 climate conference had been due to finish on Friday, but ran into overtime as negotiators from nearly 200 countries struggled to reach consensus on the climate funding plan for the next decade.

The summit cut to the heart of the debate over financial responsibility of industrialized countries – whose historic use of fossil fuels have caused the bulk of greenhouse gas emissions – to compensate others for worsening damage wrought by climate change.

It also laid bare divisions between wealthy governments constrained by tight domestic budgets and developing nations reeling from costs of storms, floods and droughts.

Countries are seeking financing to deliver on the Paris Agreement goal of limiting global temperature rise to 1.5 degrees Celsius (2.7F) above pre-industrial levels – beyond which catastrophic climate impacts could occur.

The world is currently on track for as much as 3.1C (5.6F) of warming by the end of this century, according to the 2024 U.N. Emissions Gap report, with global greenhouse gas emissions and fossil fuels use continuing to rise.

WHAT COUNTS AS DEVELOPED NATION?

The roster of countries required to contribute – about two dozen industrialised countries, including the U.S., European nations and Canada – dates back to a list decided during U.N. climate talks in 1992.

European governments have demanded others join them in paying in, including China, the world’s second-biggest economy, and oil-rich Gulf states. The deal encourages developing countries to make contributions, but does not require them.

The agreement also includes a broader goal of raising $1.3 trillion in climate finance annually by 2035 – which would include funding from all public and private sources and which economists say matches the sum needed to address global warming.

Countries also agreed on rules for a global market to buy and sell carbon credits that proponents say could mobilise billions more dollars into new projects to help fight global warming, from reforestation to deployment of clean energy technologies.

Securing the climate finance deal was a challenge from the start.

Donald Trump’s U.S. presidential election victory this month has raised doubts among some negotiators that the world’s largest economy would pay into any climate finance goal agreed in Baku. Trump, a Republican who takes office in January, has called climate change a hoax and promised to again remove the U.S. from international climate cooperation.

Western governments have seen global warming slip down the list of national priorities amid surging geopolitical tensions, including Russia’s war in Ukraine and expanding conflict in the Middle East, and rising inflation.

The showdown over financing for developing countries comes in a year that scientists say is destined to be the hottest on record. Climate woes are stacking up in the wake of such extreme heat, with widespread flooding killing thousands across Africa, deadly landslides burying villages in Asia, and drought in South America shrinking rivers.

Developed countries have not been spared. Torrential rain triggered floods in Valencia, Spain, last month that left more than 200 dead, and the U.S. so far this year has registered 24 billion-dollar disasters – just four fewer than last year.