Countries at the COP29 summit tried to make progress on how to raise up to $1-trillion (about R18.2-trillion) in climate finance for the world’s most vulnerable, as political tensions overshadowed the talks and Argentina on Thursday pulled its delegation from Baku.
The success of this year’s UN climate summit hinges on whether countries can agree on a new finance target for richer countries, development lenders and the private sector to deliver each year. Developing countries need at least $1-trillion annually by the end of the decade to cope with climate change, economists told the meeting.
Many countries have said money is essential to setting ambitious climate goals ahead of next year’s COP30 in Brazil. But reaching a deal could be tough at this year’s summit, where the mood has been soured by public disagreements and pessimism about shifts in global politics.
Donald Trump’s election win has cast the future role of the US in climate talks into doubt, and tension between developed and developing nations has bubbled to the surface on the main stages and in negotiating rooms.
“Parties must remember that the clock is ticking,” COP29 lead negotiator Yalchin Rafiyev told a news conference.
The previous annual finance goal of $100bn expires this year. But wealthy countries only met the pledge in full starting in 2022. Early Thursday, a report from the Independent High-Level Expert Group on Climate Finance said the target annual figure would need to rise to at least $1.3-trillion a year by 2035 if countries fail to act now.
A flood situation in South Sudan or Somalia creates more catastrophe than it would in any other developing country
— Habib Mayar, g7+ deputy general secretary
Behind the scenes, negotiators are working on draft texts, but early-stage documents published by the UN climate body show views around the table still diverge widely.
Many Western governments arrived in Baku reluctant to pledge big sums. The likely withdrawal of the US from any future funding deal will raise pressure on delegates to find other ways to secure the finance.
Among them are multilateral development banks such as the World Bank, funded by the richer countries and in the process of being reformed so they can lend more. Ten of the largest have said they would plan to increase their climate finance by roughly 60% to $120bn a year by 2030, with at least an extra $65bn from the private sector.
On Thursday Zakir Nuriyev, head of the Association of Banks of Azerbaijan, said the country’s 22 banks would commit nearly $1.2bn to finance projects that help Azerbaijan transition to a low-carbon economy.
So far the conference — which many global leaders decided to skip altogether — has been marked more by division than unity. Argentina’s abrupt departure on Thursday followed an order from Buenos Aires.
The country's presidential spokesperson said the move would allow Gerardo Werthein, the new foreign affairs minister, to “revaluate the situation, reflect on the position”.
“The minister is withdrawing the delegation in virtue of a whole reform the minister is going to do. There’s not much else to say,” the spokesperson, Manuel Adorni, told a news conference in Buenos Aires.
Argentina’s right-wing President Javier Milei, who has previously called global warming a hoax, was due this week to meet Trump, also a climate change denier. Asked whether Argentina would withdraw from the Paris Agreement, Ana Lamas, undersecretary for environment for Argentina, who led the country’s delegation at COP29, told Reuters: “We are only withdrawing from COP29.”
Observers criticised the decision and said it could hurt Argentina’s hopes of raising future climate cash.
“It will make Argentina, which has been an important voice on environment, look less credible and less reliable in international markets and the international community,” said Oscar Soria, head of civil society group Top Social.
On Friday, a group of conflict-affected countries was pushing at COP29 to double financial aid to more than $20bn a year to combat the natural disaster and security crises facing their populations, a letter seen by Reuters showed.
The group is one of several pitching at the climate talks in Azerbaijan this week for funds to better prepare for the impacts of extreme weather as countries seek to agree a new annual target on financing.
Island nations, for example, argue climate change threatens their very existence as seas rise, while rainforest nations say they need more money to protect their vast carbon sinks. Countries mired in conflict or the aftermath say they have struggled to access private investment, as they are seen as too risky.
That means UN funds are even more critical to their populations, many of whom have been displaced by war and weather. In response, the COP29 Azerbaijan presidency was expected to launch a new “network of climate-vulnerable countries”.
The network aims to advocate as a group with climate finance institutions; build capacity in member states so they can absorb more finance; and create country platforms so investors can more easily find high-impact projects in which to invest, said think-tank ODI Global, which helped the countries create the network.
Burundi, Chad, Iraq, Sierra Leone, Somalia, Timor-Leste and Yemen have already joined the initiative, but all 20 members of the g7+ — a group of conflict-affected nations — have been invited.
“My hope is it will create a real platform for the countries in need,” said Abdullahi Khalif, chief climate negotiator for Somalia, on the sidelines of the Baku talks. The move follows a letter sent by the g7+ to the UN, World Bank Group, International Monetary Fund and COP presidencies last month, and shared exclusively with Reuters, asking for more support.
In it, the group demanded an explicit commitment in any final deal at COP29 on financing for adaptation to climate change that the amount should double to at least a collective $20bn a year by 2026.
While 45 of the world’s least-developed countries have their own UN negotiating group, which includes some of the g7+ countries, conflict-affected states face distinct struggles, advocates said.
“A flood situation in South Sudan or Somalia creates more catastrophe than it would in any other developing country,” said Habib Mayar, g7+ deputy general secretary, who helped co-ordinate the letter.
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