COP29 reaches $300 billion climate finance deal

Countries agreed on Sunday to an annual financing target of $300 billion to help poor countries deal with the effects of climate change, with rich countries leading payments, according to a hard-fought agreement at the COP29 conference in Baku.

The new goal aims to replace the previous commitment of developed countries to provide $100 billion annually in climate finance for poor countries by 2020. This goal was achieved two years late, in 2022, and expires in 2025.

Developing countries have criticized the agreement as insufficient, but UN climate chief Simon Steele has hailed it as an insurance policy for humanity.

“It has been a difficult journey, but we have reached an agreement,” Steele said after the agreement was approved.

“This agreement will keep the clean energy boom growing and protect billions of lives. It will help all countries share in the enormous benefits of bold climate action: more jobs, stronger growth, and cheaper, cleaner energy for all.”

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

The COP29 climate conference was scheduled to conclude in the Azerbaijani capital on Friday, but ran into extra time as negotiators from nearly 200 countries struggled to reach consensus on a climate financing plan for the next decade.

At one point, delegates from poor countries and small island states walked out in frustration over what they described as a lack of inclusion, and concern that fossil fuel-producing countries were seeking to water down aspects of the deal.

The summit comes at the heart of the debate about the financial responsibility of industrialized countries – whose historical use of fossil fuels has released the bulk of greenhouse gas emissions – to compensate others for the worsening damage caused by climate change.

It also exposed divisions between wealthy governments constrained by tight domestic budgets and developing countries suffering from the costs of storms, floods and drought.

Countries also agreed Saturday evening on global market rules for buying and selling carbon credits that supporters say could mobilize billions of additional dollars in new projects to help fight global warming, from reforestation to spreading clean energy technologies.

Countries are seeking financing to meet the Paris Agreement's goal of limiting global temperature rise to 1.5 degrees Celsius (2.7 Fahrenheit) above pre-industrial levels — beyond which catastrophic climate impacts could occur.

The world is currently on track for a temperature rise of 3.1 degrees Celsius (5.6 degrees Fahrenheit) by the end of this century, according to the United Nations 2024 Emissions Gap Report, as global greenhouse gas emissions and fossil fuel use continue to rise.

The list of countries required to contribute – about two dozen industrialized nations, including the United States, European countries and Canada – goes back to a list set during UN climate talks in 1992.

European governments have called on others to join them in the push, including China, the world's second-largest economy, and the oil-rich Gulf states. The agreement 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 financing from all public and private sources and which economists say matches the amount needed to address global warming.

Securing the deal was a challenge from the beginning.

Donald Trump's victory in the US presidential election this month raised doubts among some negotiators that the world's largest economy would finance any climate financing target agreed upon in Baku. Trump, a Republican who takes office in January, has called climate change a hoax and promised to once again pull the United States out of international climate cooperation.

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

The standoff over financing for developing countries comes in a year that scientists say will be the hottest on record. Climate woes are piling up in the wake of this extreme heat, with widespread flooding killing thousands across Africa, deadly landslides burying villages in Asia, and drought in South America causing rivers to shrink.

Developed countries were not spared. Heavy rains caused floods in Valencia, Spain, last month that left more than 200 people dead, and so far this year the United States has recorded $24 billion in disasters — just four fewer than last year.