Reflections On the COP29: The Meeting Did Not Match Up to The Huge Expectations

The Brookings Institute hosted a webinar on 17th October 2024 named Meeting the global climate finance challenge. The UN Climate Change Executive Secretary, Simon Stiell, was the main guest speaker. The speakers highlighted climate financing as a major challenge.

Financing climate change: Why the new urgency?

Meeting the global climate finance challenge is a pressing imperative in the fight against climate change, requiring urgent and coordinated action from governments, financial institutions and the private sector. As the impacts of climate change intensify, the need for substantial investment in sustainable infrastructure, renewable energy and adaptation strategies becomes increasingly clear. The challenge lies not only in mobilising sufficient capital but also in ensuring that it is directed towards initiatives that are equitable, effective and aligned with the goals of the Paris Agreement. By fostering innovative financing mechanisms and enhancing international cooperation, we can pave the way for a resilient, low-carbon future that benefits both the people and the planet.

Climate change effects & financing comparisons 

Perhaps one might wonder why the issue of climate financing is urgent. Some facts and studies demonstrate this need for urgency. A recent scholarly article published in Nature Medicine by biologist Colin Carlson estimated that climate change has already killed four million people globally since 2000. And this was just from malnutrition, floods, diarrhoea, malaria and cardiovascular disease. A panellist in a webinar to be addressed later also claimed that 20% of all deaths globally can be traced back to climate change.

It goes without saying that climate change must be treated like a health emergency, even more pressing than the 2020/21 COVID-19 pandemic that sent shock waves through the world economy and triggered the largest global economic crisis in more than a century, according to the World Bank. As a matter of fact, climate change could do more harm if not addressed, including drought, famine, hurricanes, wildfires, floods and so on.

Again, using the COVID-19 pandemic as a reference point, the amount of investment and urgency being put into climate action is not comparable to that of the pandemic. Across different countries, billions were spent in response to COVID-19, including on the furlough schemes for employees and the self-employed, on personal protective equipment (PPE), the test-and-trace scheme and the vaccine roll-out. With climate change posing an even greater health risk, more should be put into climate change mitigation and adaptation measures. Is this the case? A very strong NO! Financing climate action is still an uphill task that requires all persons on earth to pull in one direction in terms of financing. 

Fast-tracking the urgency

There have been numerous key stakeholder meetings, conferences and summits on climate finance since 2015, as countries, international organisations, financial institutions, civil society and private sector actors have worked towards addressing climate change and adequate climate financing for mitigation, adaptation and resilience. 

For example, under the UN, COP22 (Marrakech, 2016) established the Green Climate Fund (GCF), COP23 (Bonn, 2017) focused on climate finance pathways for developing countries and COP28 (Dubai, 2023) touched on accelerating climate finance. The World Bank Group and IMF Annual Meeting, as well as G7 and G20 Summits, have also touched on climate finance. Yet, the climate financing gap is monumental. 

The UNEP Gap Report (2021) estimated that USD 4.3–6.7 trillion per year is needed for global climate action (including mitigation and adaptation) by 2030. However, only an annual average of USD 1.3 trillion has been available as of 2021/2022. Other estimates have put the climate finance demand higher at $8 trillion a year today, rising to $10 trillion a year after 2030. Less developed countries (LDCs), mainly in Africa, attract only 3% of the global climate finance. In light of such startling figures, what do experts say? 

Simon Steill, UNFCCC Executive Secretary, noted that climate finance requires urgency as incremental changes will not achieve much. He thanked developed countries for contributing over 100 billion dollars in climate finance, surpassing the yearly target of 100 billion for the first time and achieving an unprecedented level ahead of 2025. He also noted that the damage from the climate crisis already surpasses that amount. In fact, in an earlier article, Stiell had termed the climate crisis an “economic sinkhole costing developing countries in Africa up to 5% of GDP annually”. So, how can we take the next step to ensure a transition where more countries and companies benefit and where all peoples and communities are genuinely protected?

Stiell suggests ten ways as follows:

1. Debt relief and better financing terms for emerging economies and LDCs. Introducing more climate-related debt clauses is a start, and so is replenishing the World Bank’s International Development Association.
2. Wider reform in global finance architecture. This includes removing fiscal constraints, which are hindering the ability of governments to invest in development and climate change. 
3. Innovative sources of finance. They can include grants or concessional loans that must be made more accessible to those who need it most.
4. More accountability in climate finance. We must make climate cash count, wherever possible, leveraging more private finance and sending signals to financial markets that green is where the gains are.
5. Put in place mechanisms to track and ensure that promised funds are delivered.
6. Develop more ambitious outcomes for the COP and individual countries. 
7. Create a new COP29 goal to address developing countries.
8. Make carbon markets work for everyone
9. Triple renewable energy, and make loss and damage funds to work. For this to work, nations need to understand that one country’s failure to meet renewable energy demands is a failure for all. 
10.  Adopt a game-changing approach to incorporate all countries – “the one that recognises that bigger and better climate finance is entirely in every nation's interest, and can deliver results everywhere”.

Other panellists in the discussion echoed the call for urgency. One panellist observed that the current climate finance infrastructure does not acknowledge the unfairness towards Africa and developing nations. Most notably, G20 countries control and contribute the largest share of climate finance and also produce 80% of emissions while only directing 3% of climate funds to Africa where there is a disproportionately large damage and loss from climate crisis. 

Highlights of COP29

With COP29 having taken place in Baku from November 11^th to 22^nd, 2024, it was a huge disappointment for developing nations. By and large, there were some notable successes and failures. Here are the highlights of the failures and successes of COP29 that could set the agenda for climate action in the next year.     

Successes 

1. Developed nations agreed to triple their climate finance contribution to developing countries by 2035 to stand at $300 billion annually under the New Collective Goal on Climate Finance (NCQG). Input from other sources, including private investment will possibly increase the figure to $1.3 trillion.
2. There was an agreement on carbon markets that finalises the Paris Agreement reached a decade ago. 
3. Thirty countries agreed to reduce methane emissions from organic waste.
4. More than 100 countries agreed to increase global energy storage sixfold.
5. The Loss and damage fund was established to finance loss and damages from climate action with $780 million annually pledged.

Failures 

1. The pledge by developed nations to triple their climate finance contribution was minimal compared to an expected 5.3-5.8 trillion annual contribution needed to implement the Nationally Determined Contributions (NDCs). 
2. Climate finance did not rope in larger emitters such as China and Gulf states but only invited them to make voluntary contributions as they are classified as ‘developing nations’ in the UN climate system. 
3. The meeting did not set a clear path to transition away from fossil fuels as promised by COP28. Instead, the issue of transitioning away from fossil fuels was shunted to 2025 during COP30 in Brazil.

A key development that could affect 2025’s COP30 and even the larger climate action agenda is the re-election of President Trump. In his previous public addresses, President Trump promised to roll back climate action and even withdraw America, the world’s largest emitter, out of the Paris Agreement. Some experts warn that America's withdrawal from the Paris Agreement could add 4 billion tonnes of CO₂ into the environment. 

So, what’s next? 

Based on the views expressed in the discussed webinar, here are a few actionable steps.

1. Organisations and governments of less developed and developing countries need to push for increased representation in the climate finance decision-making table, especially after the disappointment of COP29. 
2. Recipients and beneficiaries of climate finance need to be more intentional in demonstrating the social impact and ROI in such efforts to motivate more investments in that sector.
3. Africa needs to create its own accreditation body to make it easier to access climate finance so that it can be deployed more quickly and better meet local needs.
4. Players in climate finance need to provide more opportunities for participation to ensure that the most vulnerable are more resilient to climate change, e.g., by providing social protection.

If these thoughts are put into action, the climate finance field will be better and prove more effective in climate mitigation and adaptation efforts.