The recently concluded COP29 summit in Baku, Azerbaijan, saw a landmark decision to allocate $300 billion annually to assist developing nations in combating the adverse effects of climate change. While this figure marks a significant increase from the previous $100 billion annual commitment set in 2009, the reaction from the nations most vulnerable to climate change has been one of frustration and disappointment. Many leaders argue that the deal is insufficient to address the severe environmental, economic, and social challenges they face.

Developing nations, including prominent voices from Africa, Asia, and the Caribbean, have expressed discontent over the agreed funding, citing it as far below their projected needs. Representatives from these nations described the negotiation process as imbalanced, with wealthier countries exerting disproportionate control over the final outcome. One delegate from India characterised the deal as a superficial measure that fails to address the root causes or the true scale of the crisis.

The $300 billion fund is primarily aimed at helping nations transition to renewable energy, adapt to climate-induced changes, and recover from damages caused by increasingly frequent and severe natural disasters. However, this sum pales in comparison to the $1.3 trillion requested by developing countries, which they claim better reflects the financial requirements for mitigation and adaptation efforts. This gap in expectations has sparked contentious debates, with smaller nations walking out of negotiations at various stages.

Frustration over lack of fossil fuel phase-out

While the agreement included notable steps, such as revised rules for global carbon markets and the inclusion of high-polluting nations like China in financial contributions, it failed to outline a clear strategy for phasing out fossil fuels. Critics argue that without a commitment to reducing reliance on oil, gas, and coal, even substantial financial contributions will fail to curb rising global temperatures. Countries like Saudi Arabia and India resisted calls for definitive fossil fuel phase-out plans, further complicating negotiations.

The United States and the European Union, among other wealthier nations, touted the deal as a historic step forward. They pointed to the broader inclusion of funding sources, with both public and private sectors expected to contribute. The fund is projected to grow to $390 billion annually by 2035. However, these reassurances have done little to assuage the concerns of developing nations, who remain adamant that the final figure is far from adequate given the escalating impacts of climate change.

Deepening divides within global climate finance

The COP29 negotiations laid bare the deep divisions between wealthy and developing nations in addressing climate change. Wealthy countries argue that the $300 billion pledge reflects a genuine commitment to tackling global warming collaboratively. Yet, for developing countries already grappling with rising sea levels, prolonged droughts, and devastating cyclones, the agreement highlights the persistent inequities in climate finance.

Experts have weighed in on the controversy, with climate analysts noting that while the deal marks progress, it underscores a troubling lack of ambition. They stress that any meaningful solution to the climate crisis will require not only increased financial support but also structural changes in how funds are distributed and utilised.

A path forward or a missed opportunity?

As the dust settles on COP29, the $300 billion deal is being hailed by some as a step in the right direction, while others see it as a missed opportunity for transformative change. The dissatisfaction expressed by developing nations serves as a reminder of the critical need for a more equitable approach to climate finance, one that truly addresses the disparities between nations.

Moving forward, the success of the deal will depend on how effectively the funds are mobilised and whether wealthier nations deliver on their promises. With the climate crisis accelerating, the urgency for tangible and inclusive solutions has never been greater.

  Azerbaijan, Baku, climate change, climate finance, COP29