COP29 Climate Talks Focus on Financing

COP29 Climate Talks Focus on Financing - The New York Times

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Climate Summit, in Early Days, Is Already on a ‘Knife Edge’

Negotiators agree that trillions are needed to help lower-income countries adapt and cope, but not on who should pay.

The language of world leaders speaking on Tuesday at the United Nations climate summit was diplomatic, but the underlying message was clear: There’s friction over the big issue at the conference.

The negotiations are focused on delivering a new plan to provide developing countries with funds to adapt to a warming world. Ali Mohamed, Kenya’s climate envoy, said there was widespread agreement that cutting emissions and making countries more resilient to storms, floods and heat would require “trillions” of dollars.

But just days into the talks, there were pointed comments from the leaders and squabbling in the negotiating rooms about the details, including exactly how much money should be raised, who should pay, where it should come from and how it should be spent.

“How? Where? By whom?” said Mr. Mohamed, the lead negotiator for the African group of countries. “That’s the discussion that’s currently underway.”

The financing goal is meant to replace an annual target of $100 billion that was set in 2009 and finally met two years late, in 2022.

“For decades, wealthy nations pledged $100 billion annually to support vulnerable countries,” said Prime Minister Gaston Browne of Antigua and Barbuda. “Yet these promises have largely gone unfulfilled.”

Developing countries, including Pakistan, several African nations and a group of small island states, are calling for big countries to raise that commitment to trillions per year.

Many rich countries see climate finance as “a random act of charity,” Mr. Browne said, “not recognizing that they have a moral obligation to provide funding, especially the historical emitters and even those who currently have large emissions.”

Where those funds will come from is a major point of dispute. Many leaders from the developing nations said the world’s richest economies had a responsibility to provide the bulk of the funds.

But the United States and the European Union have indicated they want countries like Saudi Arabia and China, which is now the largest emitter of greenhouse gases, to provide a growing share of funds. Under U.N. agreements written decades ago, those latter countries are considered developing nations, which means they have not been formally called upon to contribute climate aid.

“Reaching a valuable compromise requires sharing responsibilities and overcoming divisions between developed nations and emerging and developing economies,” Prime Minister Giorgia Meloni of Italy said on Wednesday in an address to delegates and leaders assembled in the main conference hall.

In his speech, John Podesta, President Biden’s international climate adviser, said the emerging climate finance deal should include “new contributors.”

Complicating the negotiations is the election of Donald J. Trump to be the next president of the United States. Mr. Trump has called climate change a hoax and has said he plans to pull out of the Paris climate accord.

“Things are on a knife edge,” said Avinash Persaud, a climate change adviser at the Inter-American Development Bank. “It could easily unravel” with an ambiguous agreement that provides no basis for more ambitious action.

Another source of contention was how much of the money should come from governments, largely in the form of foreign aid, and how much should come from private sector institutions like banks and other companies.

Wealthier nations have suggested that in addition to new funds from countries like Saudi Arabia and China, much of the money should come from the private sector.

But a growing chorus of world leaders called for a new series of global taxes on fossil fuels and other polluting industries.

Last week, President Emmanuel Macron of France, Prime Minister Mia Mottley of Barbados and President William Ruto of Kenya proposed levying a fee of 0.1 percent on stock and bond trades, which they said could raise up to $418 billion per year. They also suggested taxing the shipping industry and oil and gas producers, which they said could raise another $290 billion annually.

“The divides in the negotiations are very evident,” said David Waskow, international climate action director at the World Resources Institute. “I don’t think it’s unexpected.”

On Monday, the World Bank and other international development banks announced that they were on track to provide $120 billion per year for low-income and middle-income countries by 2030, up from $74.7 billion last year. The move was praised by the Biden administration, which has been looking for ways to provide more climate finance to poorer countries but has struggled to persuade Congress to spend more.

Those funds are expected to provide the foundation for the new finance deal and be used to leverage additional funds from the private sector.

“In this new framework, it looks like the multilateral development banks will play an enlarged role,” Mr. Persaud said.

Then, there was the issue of debt. Many poor countries are saddled with billions of dollars in debt, making it difficult for them to muster the resources to invest in clean energy, prepare their infrastructure for extreme heat and severe weather, and recover from disasters.

Leaders from developing nations, and the Roman Catholic church, said additional loans would simply perpetuate that cycle. Cardinal Pietro Parolin, the Vatican secretary of state, called on rich countries to “forgive the debts of countries that will never be able to repay them.”

That was echoed minutes later by Prime Minister Shehbaz Sharif of Pakistan. “Climate finance must be grant-based and not add to the debt burden of vulnerable, developing countries,” he said.

Negotiators are expected to come up with an updated draft of a deal by the end of the week. At that point, leaders from major countries will begin another round of lobbying for their preferred outcomes.

“That’s really where the nuts get cracked,” Mr. Waskow said. “We’re talking about high enough stakes and large enough quantities of money that it’s really in the political realm where things will get done.”

Negotiators are expected to reach a deal and wrap up the conference on Nov. 22, though climate COPs tend to go into overtime. One possible scenario, according to several people following the negotiations in Baku, is a final deal that has both a concrete number and a more aspirational figure.

The concrete number, which could be in the range of $300 billion annually, would represent the amount of money that the development banks, the International Monetary Fund and other state-sponsored entities would mobilize to support climate efforts in the developing world.

The larger figure, which could be $1 trillion a year, would include that funding, as well as hundreds of billions of private sector funds that are expected to flow into emerging economies through investments in clean power, infrastructure and protecting the natural world.

Half a world away, in Papua New Guinea, home to the third-largest rainforest in the world, Prime Minister James Marape said his government was trying to halt deforestation, a major source of emissions, but that it needed funding to do so. What funding was currently available, he said in a phone interview, was not easily accessible for many countries.

“Our efforts are not being matched by conservation dollars,” Mr. Marape said. “Our local communities, our Indigenous communities need schools, road access, hospitals. If they want to harvest the trees, we need a better alternative to offer them.”

David Gelles reports on climate change and leads The Times’s Climate Forward newsletter and events series. More about David Gelles

Brad Plumer is a Times reporter who covers technology and policy efforts to address global warming. More about Brad Plumer