- The many years of international delay on climate action — paralleled by year-after-year of rising emissions and record climate disasters — has greatly increased the price tag on preventing a global climate catastrophe. Today, experts estimate addressing the climate emergency will cost trillions of dollars.
- But who should pay, and how much? This question is expected to top the agenda at COP29, the climate summit, starting Nov. 11 in Baku, Azerbaijan, possibly leading to a new, more ambitious financial target to provide crucial funds to developing countries.
- While wealthy nations are known for pledging large sums to support the alternative energy transition, climate adaptation, and loss and damage, those nations controversially are also known for falling far short on fulfilling those pledges. Wealthy countries reportedly mobilized $115.9 billion for climate action in 2022, still not close to enough.
- Now stepping up are The World Bank, International Monetary Fund, regional development banks, and private financial institutions, who say they stand ready to invest far more (with significant caveats) than G-20 nations ever contributed. How this investing will work, and how fast, remains to be seen, with some distrustful of investment capital’s profit motives.
As 198 nations convene in Baku, Azerbaijan, for the 29th United Nations climate summit, one word will almost certainly dominate COP29 technical negotiations and private discussions: finance.
After two years of record heat, prompting an unprecedented string of extreme weather disasters, there appears to finally be a global consensus that a climate crisis — devastating wealthy and poor nations alike with drought, wildfire, flooding and sea-level rise — can no longer be ignored.
But a key consensus is still needed on how to mobilize the estimated $2 trillion by 2030 needed to rapidly transition national economies to a post-carbon world — fully converting to renewable energy and low-carbon transportation, while compensating countries in the Global South being ravaged by global warming impacts.
“People keep talking about this COP as being the finance COP,” said Andrew Deutz, a finance expert and global policy and partnerships manager with WWF. “But to be honest, from this meeting going forward, every COP will be a finance COP.”
A first significant step in this direction has been the discussion and, perhaps, adoption at COP29 of a new and ambitious financial target aimed at raising funds to support countries affected by the worsening impacts of climate change, known as the New Collective Quantified Goal (NCQG). While the specific details are yet to be determined, the discussions at COP29 could mirror how challenging it will be to find consensus on these new targets.
Leaders have called for a fair and robust NCQG, while civil society has worried that the pace of the negotiations and the current…
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