COP29: Different funding strategies emerge for global climate goals
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Well into the first week of the latest UN climate summit in Azerbaijan, there are signs of movement — and hints of the arduous task ahead for diplomats.
Why it matters: Countries at COP29 are in no mood to fork over large increases in traditional public funds to contribute to a new, globally agreed goal for climate finance.
- Instead, countries are discussing a variety of funding sources to jump from the billions to trillions in climate finance.
Studies show that approach is needed for developing nations to adapt to climate change and switch to cleaner-burning energy sources.
- This includes adding in money from institutions such as the World Bank, as well as policies to encourage private-sector money.
Zoom in: Coming up with a large sum of public financing in the midst of inflation concerns, two major regional conflicts and the impending return of President-elect Trump to the White House isn't going to be easy.
- Developing countries, many of which are heavily in debt from previous development loans, are seeking out major new public funding commitments, which would come with few strings attached.
The intrigue: So far, multilateral development banks and some countries have pledged new money, which adds to the existing $100 billion annual developed country target.
- But the sums being mentioned don't get to the scale needed to address the climate challenge.
- For example, a panel of economists released a report Thursday morning finding at least $1 trillion each year is needed to address climate adaptation and mitigation needs in developing countries by 2030. This would increase to $1.3 trillion annually by 2035.
- Still, the commitments so far provide an increase in public finance which could build going forward through these talks and into subsequent rounds, David Waskow of the World Resources Institute told Axios.
- He noted that with the banks' commitment on Tuesday, total climate finance would increase to about $165 billion per year by 2030.
"I think there's an important base there, in fact, for public financing," Waskow said.
Zoom out: At the same time, there has been some action on the emissions-reduction front, despite COP29 being known as the "finance COP."
- On Wednesday, Brazil submitted its new climate plan, known as a Nationally Determined Contribution (NDC), to the UN climate panel.
- It calls for a 59% to 67% emissions cut below 2005 levels by 2035, with a goal of carbon neutrality by 2050.
- It contains plans for reducing deforestation and language referencing the transition away from fossil fuels in the energy sector, which is a reference to the agreement struck last year in Dubai.
In the NDC, Brazil — which will host COP30 next year — also voices support for international discussions around a schedule for transitioning away from fossil fuels, which goes beyond the Dubai deal.
Yes, but: Brazil's NDC doesn't contain goals for reining in its oil and gas production, including the country's plans to expand that sector.
What we're watching: How negotiations on a new climate finance goal progress as crunch time approaches next week.
