By AFP - Agence France Presse
COP29 - Azerbaijan
Climate finance: who is being asked to pay for what at COP29?
“You owe us!” shouted a protest banner at the COP29 summit in Azerbaijan, where negotiations on how much the rich nations most responsible for climate change should pay the poorest are heating up.
COP29's top priority is reaching an agreement to provide the $1 trillion a year that experts say is needed by 2030 for developing countries, but getting there will be hard work.
Countries are deeply divided. Who should pay what and how much are just two of the many obstacles to reaching an agreement by November 22?
Here's a look at what developing countries need and who is helping them foot the bill.
- How much is needed? -
A group of leading economists commissioned by the United Nations estimates that developing countries, excluding China, need $2.4 trillion in climate finance annually by 2030.
In a report published on Thursday, these experts said that two-thirds of this money would be needed to transition developing economies from fossil fuels to cleaner forms of energy.
The rest should be divided between adaptation measures to deal with climate change, disaster recovery funds, and nature conservation.
Of the US$ 2.4 trillion, it is estimated that US$ 1.4 trillion will have to come from developing countries themselves.
But foreign aid will be needed to cover the remaining US$ 1 trillion.
This amount could be covered by grants or zero-interest loans from foreign governments, private investment flows, or money raised from global taxes, according to the report.
- What should governments pay? -
How much comes directly from governments is the crux of the issue for many at COP29, who feel that wealthy donors such as the United States and the European Union are not doing enough.
Amar Bhattacharya, co-author of the expert report on climate finance, said that this figure “would be somewhere in the range of $300 to $400 billion”.
That's at least triple the current commitment, a difficult task for donors facing domestic economic and political crises and the prospect of Donald Trump withdrawing from global climate cooperation.
The cost also continues to rise.
Developing countries are the least responsible for global warming but the most exposed to climate shocks, which are accelerating as the planet warms.
By 2035, foreign donors will need to disburse $1.3 billion a year to meet the needs of developing countries, according to the report.
- How much has been raised? -
Rich nations raised $116 billion in 2022 in climate finance, according to the latest data available from the OECD.
But is the money used to make hotels more sustainable, in one glaring example, really helping poorer countries adapt to climate change?
What about loans that increase national debt?
Developing countries and campaign groups have called for greater scrutiny of the money raised, and efforts have been made to quantify how much each nation donates.
A study by the British think tank ODI ranks progress towards each country's “fair share” based on its carbon footprint, population size, and gross national income.
Based on this criterion, Norway led the pack in 2022, followed by France.
The United States - the world's largest historical emitter - came in second-to-last place among the 23 nations evaluated.
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