(Bloomberg) -- Nearly 200 nations are haggling over an international funding deal to help poor countries combat climate change as fraught COP29 talks come down to the wire.
A new negotiating text was provided to delegates at the gathering in Azerbaijan on Friday following overnight attempts to bridge deep differences that had spilled into public view a day earlier. The latest proposal called for rich nations to “take the lead” in providing the $250 billion annually by 2035 through a wide variety of sources, including public finance as well as bilateral and multilateral deals.
The proposal represents a more than doubling of an existing $100 billion annual commitment that expires next year, but it would give countries another decade to reach the new target. The latest draft also called for total funding of at least $1.3 trillion annually — the bulk of it in private financing — by the middle of the next decade.
The plan drew swift condemnation from climate advocates in developing and vulnerable nations who have insisted far more money is needed to deal with the consequences of decades of unchecked greenhouse gas emissions.
It’s “deeply insulting” and “far worse than we expected,” said Lidy Nacpil, an activist from the Philippines with the Global Campaign to Demand Climate Justice. “We’d rather have one more year of fighting on this” and try for a deal at next year’s summit in Brazil, she said, than accept something so terrible now.
Nevertheless, the new plan was a bid by the COP29 presidency to close in on an agreement that could prove acceptable to rich nations expected to do the heavy lifting in raising the money. The conference, formally due to end Friday, is expected to run into overtime as delegates braced for a potentially long night of negotiations.
“There is no deal to come out of Baku that will not leave a bad taste in everyone’s mouth, but we are within sight of a landing zone for the first time all year,” said Avinash Persaud, special adviser on climate at the Inter-American Development Bank.
The host country said it would push on. The $250 billion target “doesn’t correspond to our fair and ambitious goal, but we will continue,” Yalchin Rafiyev, lead COP29 negotiator, told reporters. “We are committed.”
Sources of Finance
Activists criticized the draft because, along with public financing by wealthy nations, it encompasses funds mobilized through multilateral and bilateral deals. There was also no clarity how much of it would come from grants, a demand by some developing nations to ease the burden on their debt-laden economies.
“Developed countries ‘taking the lead’ doesn’t mean they will provide the funding,” said Meenakshi Raman, a Malaysian activist with the non-profit Third World Network.
The new text’s embrace of $1.3 trillion reflects the most credible estimates from a UN-backed group of experts of the total finance necessary each year for developing countries. But even that said the proposal’s smaller government-led target is “too low.”
Leaders of the Independent High-Level Expert Group on Climate Finance said their analysis “should commit developed countries to provide at least $300 billion per year by 2030 and $390 billion per year by 2035.”
Another key element of the negotiation is the US and European Union attempt to ensure rich-but-still-developing countries such as China and Saudi Arabia contribute to the climate financing, a move the nations have opposed.
The latest text attempts to broker a compromise by accounting for these countries’ contributions via multilateral development banks, and potentially through voluntary finance on a bilateral basis. It also calls for additional voluntary funding, without changing their formal status as developing countries.
But that’s unlikely to resolve the issue, said Praveen Kumar a professor at Boston College.
Developing Countries
“Inviting developing countries to even voluntarily contribute toward the climate finance goals is going beyond the Paris Agreement, which will set up a fight as countries air grievances about the new draft,” he said.
Some wealthy nations have maintained that any final finance deal must lay out a pledge that is both ambitious and credible. While developing countries said Friday’s proposal failed on the first count, it might succeed on the second: $250 billion is barely beyond business-as-usual scenarios, according to modeling by environmental groups.
It leaves the door open “to get to a higher number,” said Joe Thwaites, a senior advocate of international climate finance with the Natural Resources Defense Council.
The finance package is one of several measures set to form the broad outcome of the COP29 summit, with separate agreements possible on both mitigating the extent of climate change and adapting to it.
A separate draft document on cutting planet-warming carbon dioxide emissions reaffirms a landmark pledge made at last year’s climate summit in Dubai to transition away from fossil fuels and take other steps. But it does so without explicitly naming the fossil fuels that are the prime driver of global warming.
Saudi Arabia and other Middle Eastern nations have opposed singling out any sector. Some wealthy and vulnerable nations, however, argue more needs to be done to translate last year’s commitment into concrete action.
--With assistance from Alfred Cang and Natasha White.
(Updates throughout with details.)
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