Le texte de l’objectif financier a à peine changé tandis que les économistes estiment que les pays en développement ont besoin de 1 billion de dollars d’ici 2030
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Azerbaijan’s climate fund on backburner
On COP29’s ‘finance day’, the Azerbaijan presidency was expected to unveil one of its flagship – and most controversial – initiatives: a climate fund designed “primarily” for developing countries with money voluntarily put in by fossil fuel producing countries and companies.
“We’ve heard that communities want action not words,” said COP president Mukhtar Babayev back in July when the idea was first floated, calling the fund “a significant step”.
But, when the big day came, the Climate Finance Action Fund (CFAF) all but disappeared from the agenda. A “high level event” to launch the financial mechanism was scrapped, while the presidency put the idea on the backburner.
When Climate Home asked Azerbaijan’s lead negotiator Yalchin Rafiyev about it, he said that the COP hosts have established a working group to “work out a concept that would be workable and acceptable” for donor countries interested in joining the initiative.
He added that it is “a very complex process to establish a new fund” but that they have seen “a great interest” by the potential contributors from developing and developed countries.
A COP29 source who did not want to be named went further, telling Climate Home that the presidency decided to deprioritise the initiative temporarily as it was getting tangled up with the negotiations over the post-2025 finance goal (NCQG), the main outcome of this year’s summit.
The source said that potential donors from developing countries were particularly worried that pitching money into Azerbaijan’s fund now would be seen as a precedent that could be used to push them to contribute to the NCQG as well. On top of this, developed countries might have counted any contributions into the CFAF towards their climate finance share, the COP29 source added.
The CFAF seeks to raise at least $1 billion and should become operational when at least 10 countries commit money to the vehicle, according to the COP29 presidency. It is meant to channel funding “primarily” towards developing countries to help them shift to clean energy, improve energy efficiency and boost climate resilience.
The fund would mainly give out money at commercial lending rates with only a fifth of its revenues being reinvested into a facility providing “highly concessional and grant-based support” to vulnerable countries.
Climate campaigners have reacted positively to the postponement of the fund. They have previously criticised it as a distraction from efforts to make fossil fuel producers pay adequate reparations for the climate crisis they are primarily responsible for.
While the COP29 presidency insists that the fund will go ahead soon, Andreas Sieber, associate director of policy and campaigns at 350.org, said it would be no loss for the planet if it ended up being scrapped entirely.
“The presidency’s fossil fuel fund was a distraction and a greenwashing fund,” he told Climate Home. “Putting money into a fund while expanding fossil fuels essentially means pretending to put out a fire while feeding it more fuel”.
At COP29, Azerbaijan had also been expected to announce a new national climate plan – known as a nationally determined contribution (NDC) – but it has yet to do so.
Still no progress on finance text
Progress on COP29’s headline outcome – the new post-2025 climate finance goal – continues to be incredibly slow.
After pre-COP talks had whittled down the text, negotiators came to Baku with a nine-page text. On Tuesday, they asked the co-chairs to put all the options back in.
The co-chairs went away and came back on Wednesday morning with a 34-page text. Negotiators asked them to go the other way and streamline it but late on Wednesday they sent negotiators a new version with just one page removed.
They will consolidate some more today, focussing on more technical issues like transparency and reporting. Iskander Erzini Vernoit, who follows the talks for Moroccan think-tank IMAL, said the text needs to be “shorter” but include developing countries’ common points.
Government ministers, who are more empowered to make compromises and therefore delete options, will arrive in Baku on Monday. The text needs to be “workable” by then, said Vernoit. COP29 negotiator Yalchin Rafiyev claimed this morning at a press conference that it is already “workable”.
Aside from streamlining, negotiators will discuss some substantial issues behind closed doors today – like human rights, how recipients can directly access funds and issues which stop climate finance flowing.
This morning in Baku, top economists released a well-timed new UN-commissioned report on climate finance.
Nicholas Stern, Vera Songwe and Amar Bhattacharya say that finance talks should focus on mobilising $1 trillion a year by 2030 to developing countries other than China and this should rise to $1.3 trillion by 2035.
To demonstrate their commitment to this, the authors write, “advanced economies” need to triple their existing $100 billion climate finance commitment to $300bn. The rest should come primarily from the private sector and multilateral development banks.
Stern, Songwe and Bhattarcharya add that cooperation between developing countries “is already making a significant contribution and there is great scope for enhanced support and financing from leading developing countries”.
Developing countries have resisted developed nations attempts to widen the contributor base to the finance goal to include countries like China and the Gulf states.
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