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COP29 is ending on Friday in Azerbaijan’s capital, Baku, but there is no deal in sight as negotiators remain deadlocked over climate finance–the summit’s central issue. Dubbed the “finance COP,” this year’s conference was expected to deliver a New Collective Quantified Goal (NCQG) to replace the outdated $100 billion annual pledge by developed nations. Instead, talks have stalled, leaving frustrations high and hopes low.
The NCQG discussions, which aim to set a new funding target for climate action, have become increasingly contentious. Developing nations, led by Kenya’s Climate Change envoy Ali Mohamed, are demanding at least $1 trillion annually to support renewable energy, adaptation, and resilience projects. “No number, no ambition,” Mohamed said, encapsulating the growing dissatisfaction among over 20 nations.
Meanwhile, developed countries, including the EU, insist on expanding the donor base to include wealthier emerging economies like China, further deepening the divide. The negotiations, which began with a nine-page draft text, now span 35 pages, reflecting unresolved debates on both the scale and structure of financing.
A Fractured Landscape on Climate Commitments
Beyond disagreements on the funding amount, the type of financing–grants versus loans–remains a sticking point. Developing countries argue that grants are essential to avoid plunging already vulnerable economies into deeper debt, while wealthier nations advocate for a mix of loans and private sector mobilization.
Multilateral development banks (MDBs) have sought to bridge the gap, pledging to increase annual climate finance from $75 billion to $120 billion by 2030. However, this commitment has drawn mixed reactions, with some viewing it as progress and others criticizing it as inadequate.
Carbon Market Agreement Offers a Glimmer of Progress
While the overall outlook remains bleak, COP29 did achieve a notable breakthrough with the establishment of a global carbon market under Article 6.4 of the Paris Agreement. This mechanism enables countries to trade verified carbon credits, providing a potential revenue stream for climate action in developing nations. COP29 President Mukhtar Babayev hailed the agreement as a “game-changing tool,” though critics argue it falls short of addressing the summit’s core challenges.
Global South’s Growing Frustration
African leaders, including Kenya’s Environment Cabinet Secretary Aden Duale, have highlighted the disproportionate vulnerability of their nations to climate impacts despite their minimal contribution to global emissions. Duale reiterated Africa’s demand for $1.3 trillion in climate financing, calling for grants to ensure sustainable development without exacerbating debt.
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“Africa cannot and will not bear the brunt of this crisis alone,” Duale said, emphasizing the urgent need for equitable financial support.
Guterres Warns of Mounting Consequences
UN Secretary-General António Guterres has also called for immediate action, warning that the global adaptation finance gap could reach $359 billion annually by 2030. He urged wealthier nations to increase adaptation finance to $40 billion by 2025 and contribute to the newly established Loss and Damage Fund.
“These missing dollars are not abstractions–they represent lives, livelihoods, and lost opportunities,” Guterres stressed.
Outlook Remains Grim
As COP29 concludes, the lack of a unified agreement on climate finance casts a shadow over the summit’s outcomes. While the progress on carbon credits is significant, it is insufficient to bridge the financial divide between wealthier nations and those on the frontlines of climate impacts.
With no deal in sight, the conference may end as yet another missed opportunity, leaving critical funding decisions for future summits and vulnerable communities to bear the brunt of inaction.
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