The COP29 summit concluded on Sunday Nov 24, with a US$300 billion climate deal gavelled through at the last moment—33 hours after the summit had been supposed to conclude. While some delegates gave the deal a standing ovation, delegates of developing nations and small island states criticised it heavily.
The new commitment made by developed nations to provide US$300 billion annually to developing nations by 2035 is three times the value of the previous commitment to provide $100 billion by 2020, a deal which expires in 2025. This sum of $300 billion is also higher than the previous offer of $250 billion, so why were developing nations outraged over this figure?
Indian delegate representative, Chandni Raina, said in the closing session of the summit that the ‘document was nothing more than an optical illusion’ and would ‘not address the enormity of the challenge’ they faced. Other delegates of the developing world, such as Juan Carlos Monterrey Gomez, Climate Envoy of Panama, expressed that they felt compelled to accept the sum ‘for the sake of multilateralism’ although they felt like it was not enough.
Meanwhile, small island nations criticized the host country’s presidency for sidelining them during the talks. Representatives for the Alliance of Small Island States (AOSIS), a coalition of nations threatened by rising seas, such as Samoa, walked out of the climate negotiations after dismissing the $250 billion offer. Cedric Schuter, the Samoan chairman of the AOSIS, explained ‘We came here to this COP for a fair deal. We feel that we haven’t been heard’.
The sum of $300 billion is meant to help less developed countries deal with the effects of climate change, such as adapting to extreme weather events which developing countries and small island states are particularly vulnerable to. It is also supposed to aid their transition to clean energy. However, the deal is $200 billion less than the number called for by a group of 134 developing countries. Independent experts, meanwhile, say the amount required is closer to $1.3 trillion.
Why developed countries are expected to pay developing countries
The Paris Agreement and UN Framework Convention on Climate Change state that climate finance is based on responsibility and justice, on the principle of common but differentiated responsibilities and respective capabilities: those who contributed most to the climate crisis should be most responsible for its solution.
The United States, the E.U, Russia and China account for approximately 60% of global emissions, while the 10 countries in the world most vulnerable to the effects of climate change account for less than 1% of global emissions.
Historically, the US is responsible for the largest share of greenhouse gas emissions. The cumulative amount of carbon dioxide emitted since the start of the Industrial Revolution, beginning in the mid-18th century, is closely tied to the 1.2 ºC of warming that has occurred. Developed countries have historically benefited from such periods of industrial activity, developing their economy at the expense of the climate. However, developing countries have not only been unable to benefit from such industrial activity but are now facing the brunt of the effects that such industrial activity has left.
How the climate finance will be paid
How the climate finance will be paid also poses an additional point of contention. Developing nations requested that government grants, rather than loans or private capital, comprise the majority of the new finance goal. While private investments are a source of climate finance, some consider it unethical since it is a return-seeking finance. Additionally, this private finance has only sometimes been delivered.
Currently, 69% of all climate finance is provided in loans. However, this has exacerbated the debt crisis in climate-vulnerable countries: developing countries will have to return more money than they borrowed, to resolve a global issue that they did not create. Spending money on such interest payments detracts from investments in public health, education and the environment.
Loans issued by international economic institutions such as the World Bank and the International Monetary Fund also often come with stringent conditions. Countries are expected to adopt policies requested by the IMF in exchange for funds, even if these policies result in negative consequences for citizens of a country.
For example, the IMF often imposes austerity policies, enforcing public spending cuts. In Africa, debt service exceeds the total amount of government spending on health, education and social services. In Ghana, Kenya, Malawi, Nigeria, Senegal, Sierra Leone, Tanzania, Uganda, Zambia and Zimbabwe, 8 of 10 countries were advised to cut or freeze public sector wage bills, while all 10 countries were advised to spend less than the global average on frontline workers in health, education and other sectors.
Developed countries also have immense control over decision-making in the World Bank and IMF; consequently, developed countries often use their power as creditors to dictate economic policy in debtor nations. For instance, the US is the biggest shareholder of IMF’s voting shares with a 16.5% share: this effectively gives the US veto power since major decisions require at least 85% approval. Meanwhile, the Group of Seven (G7) and European Union member states cumulatively own more than 50% of the total votes at the World Bank—though they represent less than 13% of the global population. By comparison, African countries have less than 10% vote share in the IMF board, and the 46 countries in sub-Saharan Africa are represented by only two executive directions.
Differing challenges faced by developed and developing nations
The current geopolitical landscape has also resulted in developed and developing nations grappling with different issues. Nazanine Moshiri, senior climate and environmental analyst at the International Crisis Group, explained that while developing nations are struggling with the ‘mounting costs of storms, floods and droughts, which are being fueled by climate change’, developed nations are being ‘constrained by tight domestic budgets, by the Gaza war, by Ukraine and also other conflicts, for example in Sudan’.
The results of the US 2024 election also cast a shadow over the COP29 summit. The United States is the world’s biggest economy, historically the largest emitter of greenhouse gases, and the top producer of oil and gas. However, while the US delegation helped in coming up with the climate finance deal, they were not able to assure that the next administration would honour its commitment to the deal given that President-elect Donald Trump, a known climate skeptic, will return to the office next January. Donald Trump has pledged to withdraw the United States from the global Paris Agreement on climate change, as he did during his first term, from 2017 to 2021, in the white house.
The imminent return of Donald Trump to office has left many concerned that a second Trump administration would reverse years of progress in climate negotiations. Developed nations believed that having the date of the climate finance deal set to 2035 would allow the US to contribute again once Trump has left office. Professor Michal Jacobs, visiting senior fellow at the think tank ODI Global, said that ‘No-one thinks Trump in the White House will be anything but damaging to the multilateral climate regime’, but the agreement is ‘about trying to limit the damage as much as possible’.
Limitations of climate talks
Next year’s climate summit, COP30, will take place in Belém, Brazil. U.N climate summits have been going on since 1995 and some have suggested that it is time to restructure the way climate talks are held. Others, however, like Steven Cohen of Columbia University, noted that even the ‘best-designed U.N Summits can only play a small role in the larger process.’
U.N climate talks, by design, depend on voluntary cooperation among nations with vastly different interests: there exists no global authority that can coerce countries to act in ways that they refuse. Therefore climate change, though a global problem, is one that can only be addressed through global action by governments within their nation states.
Despite the limitations of climate talks, many agree that it is essential to continue to work towards global cooperation. As Simon Stiell, the UN climate chief said: ‘I’m as frustrated as anyone that one single COP can’t deliver the full transition that every nation needs’, but it is important to keep working and ‘show that global corporation is not down for the count.’
