The lights in Baku have barely dimmed, yet the deepening cynicism around the travelling Conference of the Parties caravan of carpetbaggers is already swirling in the dust of COP29’s $300bn climate finance deal.
Billed as a historic moment in the global climate fight, it was met with applause by some and scorn by others, particularly developing nations such as SA, where the gap between climate ambition and delivery looms as wide as the Karoo. The question we must grapple with now is not just whether the deal is enough — it isn’t — but what it means for countries teetering on the edge of climate and economic crises.
Let’s start with the facts. COP29’s headline agreement commits wealthy nations to tripling their annual climate finance contributions by 2035, from the long-overdue $100bn a year. It’s a number designed to impress, but the ink on the paper belies the messy, protracted process behind the deal. Talks ran overtime, developing nations walked out in frustration and the eventual outcome was slammed as “optical illusion diplomacy”. The Indian delegation didn’t mince words, calling the deal insufficient to address the enormity of the climate crisis. It isn’t wrong.
It's hard to argue against critics such as David Buckham, who has slammed the COPs for being a dangerous distraction, a mirage of progress, diverting our attention from finding pressing practical solutions to adapting to a warming planet (“COP29 — a dangerous distraction to appease the Western conscience”, November 21).
For SA this deal is a bitter pill wrapped in sugary promises. If you have any doubts about the economic effects of the pace of climate change, I suggest you sit down with an insurer for a while.
Standard Insurance CEO Johan van Greuning took me through some of the alarming details recently, showing how risk pricing is being forced to adapt to a world where one-in-100-year events become one in 10 or one in five. We are not removed from regions where the effects are unfolding at greater pace and ferocity as this causes the global reinsurers, which backstop the insurance market, to reprice risk across the board.
We are facing intensifying droughts and floods and we’ve pinned our hopes on international climate finance to fund our just energy transition. Yet history offers a sobering lesson: promises made on the global stage often falter in the face of geopolitical reality. The $100bn commitment from COP15 in Copenhagen wasn’t met until 2022, and even then much of it came as loans rather than grants, worsening the debt burdens of countries already struggling under the effects of climate change.
SA is no stranger to this climate finance paradox. The government’s flagship Just Energy Transition Partnership (JETP), an $8.5bn deal struck at COP26 (now $13.9bn), is still mired in bureaucracy, with less than 25% of funds disbursed and only 4% as highly concessional loans. This mirrors the broader global trend: ambitious pledges unfulfilled, ambitious targets unmet. The sooner we realise that we are on our own and start planning accordingly, the better.
This makes the timing of the Treasury’s decision to push ahead with the second phase of its carbon tax — an innovative but contentious policy aimed at reducing greenhouse gas emissions while balancing economic realities — even more alarming. Allowances are shrinking, rates are rising and offsets are being recalibrated, all in an effort to nudge industries towards sustainability. Yet without robust financial support these efforts risk collapsing under the weight of their own ambition.
There’s cognitive dissonance everywhere one looks. Our minister of fisheries, forestry & the environment, Dion George, parroted SA’s support for China in the debate on whether it should contribute funds to assist the developing world financially. While it’s true that COP29 laid bare a truth that the climate crisis is as much a moral-political issue as a scientific one, it’s patently absurd to absolve the world’s second-largest carbon emitter and second-largest economy of any financial responsibility towards the Global South.
Even COP29’s $300bn pledge feels inadequate in the face of what’s truly needed. The UN’s 2024 Emissions Gap Report estimates that $1.3-trillion annually is required to keep global temperature rises within 1.5°C. At the current trajectory we’re heading for a catastrophic 3.1°C increase by the end of the century.
The technical ability to raise these funds exists. A study by the Technical University of Munich revealed that oil and gas companies, swimming in windfall profits from recent crises, could have funded nearly five years of the promised $100bn annual climate finance. But political will remains in short supply, particularly in an era of rising geopolitical realignments and domestic economic pressures.
While SA waits for the promised funds, other nations offer glimpses of what’s possible. Morocco’s Noor Solar Power Station, the largest concentrated solar plant in the world, was built with COP-facilitated financing and partnerships. Kenya, another standout, has leveraged adaptation funds to revolutionise agriculture and water conservation, bolstering resilience against extreme weather.
These examples highlight a critical point: when it flows, climate finance can drive transformative change. But for every Morocco or Kenya there’s a SA, struggling to translate global pledges into local progress.
To dismiss COP29 as a complete failure would be premature. But it looks like next year’s meeting in the Amazon will welcome participants to the jungle with a Guns n Roses riff: “Welcome to the jungle, it gets worse here every day; You learn to live like an animal in the jungle where we play; If you got a hunger for what you see, you’ll take it eventually; You can have anything you want, but you better not take it from me.”
• Avery, a financial journalist and broadcaster, produces BDTV’s ‘Business Watch’. Contact him at Badger@businesslive.co.za.
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