COP29: High political level needs to decide financing – 09/29/2024 – Environment

With the start of COP29, the UN (United Nations) climate conference approaching, pressure is increasing to solve a historic problem in the negotiations: unlocking climate financing.

This is the main goal of the event, which starts in November in the city of Baku, capital of Azerbaijan.

And there are two big questions on the table: the value of the new funding target and how the figure will be calculated.

“As we are talking about billions, trillions of dollars, this needs to be decided at a high political level, this engagement is necessary”, he tells Sheet Yalchin Rafiyev, COP29 chief negotiator.

The discussion revolves around the acronym NCQG, an acronym in English for new collective and quantified target.

The Paris Agreement defined that developed countries should transfer at least US$100 billion annually for climate financing to developing nations.

According to the OECD (Organization for Economic Cooperation and Development), this target was only met in 2022, two years late. Rafiyev hopes that COP29 will not only be able to create a new goal, but also ensure that it is implemented.

“During the negotiation process, there are different views, of course. The NCQG definition brings a series of elements: the amount, who will pay, who will benefit from this amount, how long we will have to raise this amount…”, says the azeri.

“[Por enquanto] we do not see any country creating preconditions or barriers. We hope that this constructive spirit continues”, he states.

As important as the goal is working out how this value will be accounted for. There are a number of doubts about this.

For example, whether only donations made by countries will be considered or whether amounts originating from private funds will also be added. Whether lines of credit will be included and, if so, what types of credit. Or whether or not investments by countries in themselves will be taken into account.

It is also necessary to discuss whether the new target will only account for donations and investments made after its definition or will be retroactive. It will also be necessary to decide which countries and/or institutions will have to contribute and with what percentage of the total, as well as which nations or communities will have access to the money and to what extent.

Defining a goal compatible with the socio-environmental challenge, but without clarity about these details, could make the NCQG fail. At the same time, determining all these procedures but not reaching an agreement on the total amount could be as innocuous as the current US$100 billion.

“There is a certain consensus among countries: we need to greatly increase current financing,” he says.

Rafiyev states that the technical discussions are almost finished and that high-level diplomatic efforts will be necessary to make decisions and reach definitions on this matter.

Another obstacle to the negotiations could be the various elections that the world has gone through or will go through before the COP, especially that of the United States, which pits Donald Trump and Kamala Harris face to face.

Trump is openly opposed to COP negotiations and, when president, withdrew the country from the Paris Agreement.

At the same time, in order to be effective, a global climate financing agreement cannot do without a commitment from the United States — which makes some diplomats fear that a Republican victory will put all environmental negotiations in check.

Rafiyev, however, says he is confident in the Americans’ commitment, regardless of the electoral result.

“There has been a significant change in the political landscape of the European Union [com a vitória da extrema direita]but this had no negative impact on our negotiations”, he states.

“In the case of the United States, we believe it will have no impact on the negotiation processes. United States delegates are engaged in the debates”, he adds.

Azerbaijan was the target of criticism, when chosen to host COP29, because it is one of the main oil producers in the world. Baku diplomats, on the other hand, argue that there is no contradiction between exploiting fossil fuels and promoting the world’s major climate event.

On the contrary, they advocate using income from oil and gas to finance the energy transition — the country launched a special fund for oil producers that has this purpose.