Why the COP29 finance deal is deemed ‘a joke’ and ‘an insult’

Climate activists worldwide criticised the NCQG ministerial text, accusing it of shirking responsibility and shifting the burden onto developing countries to manage the essential $1.3 trillion on their own by 2035. Photo: Bloomberg

COP29 was dubbed a 'finance COP,' with climate-vulnerable countries asking for $1.3 trillion annually. After two weeks of protracted negotiations, developed countries offered just $250bn per year in climate financing to developing nations and LDCs to deal with damage from climate change.

The discussions ran into overtime on the final day, with the developing world ultimately rejecting the proposal. However, the deal was finalised in a sense, as the Baku COP29 presidency, in its final draft released on Friday, claimed that the figure resulted from 'an extensive and inclusive consultation process.'

Fifteen years ago, developed countries committed to a $100 bn annual climate finance target, which they pledged to reach by 2020, but only achieved belatedly in 2022, with loopholes such as non-concessional loans. Expectations from this year's much-hyped climate COP were high, given the escalating impacts of climate change. 

As a result, the $250 bn COP29 annual finance deal, which developed countries will provide by 2035, has angered the global south. Although the developed countries, like Australia, framed the deal as "a genuine attempt," or Germany's climate envoy Jennifer Morgan remarked, "This is not a landing ground yet, but at least we're not up in the air without a map."

Climate activists worldwide described the newly reached deal as a "joke" and "insult" to the people in the global south. 

"This latest draft text on the New Collective Quantified Goal is not just a joke – it's an insult to the people in the Global South living on the frontline of the climate crisis. The $250 billion per year in public finance is peanuts. The Global South must not carry the burden of historic emitters' failure to act," said Tasneem Essop, Executive Director of Climate Action Network International, a network of 1,900 civil society groups. 

"No deal is better than a bad deal – but we are not done yet," she added. 

Climate activists worldwide criticised the NCQG ministerial text, accusing it of shirking responsibility and shifting the burden onto developing countries to manage the essential $1.3 trillion on their own by 2035, further risking the lives and livelihood of millions of people in the climate-vulnerable areas. 

"The NCQG text put forward by the Azeri presidency on Friday afternoon answers an important question formulated this week by developing country diplomats: 'Is this a joke?' they asked. It is, indeed," said Claudio Angelo, head of International Policy at Observatório do Clima. 

In the global south where people are desperately seeking to save themselves and their properties, over and again, from persistent climate risks of cyclones, salinity, floods, heatwaves, landslides or forest fires and other climate change-induced disasters, the developed world's lack of empathy in addressing the crisis they largely caused has deeply frustrated climate activists. 

In response to the $1.3 trillion need, with a strong demand for grant-based finance, the "measly $250 billion" which was pushed as a hybrid of loans and private sector investment, not only fails to deliver on climate ambitions but could also undermine the principles of the Paris Agreement.

M Zakir Hossain Khan, chief executive of Dhaka-based think tank Change Initiative, said that only around 20% of the $1.3 trillion in public funds has been committed by developed countries, covering adaptation, mitigation, and other forms of support where developing countries require approximately $250 billion annually for adaptation alone. 

There's no clarity on how much will be allocated to each LDC, nor is there any assurance of grant-based finance or timely fund delivery. And numbers hardly mean anything unless funds are provided adequately and on time. 

"The Paris Agreement will not be successful due to less priority of top emitters and the failure to address historic injustices. LDCs must unite to assert their rights through measures like carbon tax regimes and tools such as trade and climate fund swaps," Zakir Hossain said. 

Juel Mahmud, a Programme Coordinator at the International Centre for Climate Change and Development (ICCCAD) said the offered deal is unacceptable to G77+China, LMDCs, LDCs, AOSIS, and small island states. 

"The text mentions $1.3 trillion but obligates developed countries to deliver only $250 billion to developing nations by 2035, worsening the situation. Although COP29 was officially set to end today, we anticipate debates and arguments to possibly extend the conference by one or two days," Juel said on Friday. 

The conference was extended to Saturday. As of filing the story, Reuters reports that the European Union, the US and other wealthy countries agreed to raise their offer to $300 billion. However, the report also adds that "It was not clear if the wealthy countries' revised position had been formally communicated to developing countries at COP29, and whether it would be enough to win their support." 

Furthermore, some climate activists observed that the extended climate talks "lay bare the deep inequities" in the multilateral process.

"The latest draft ignores the urgent needs of developing countries and the voices of climate justice advocates. Developed countries must commit trillions, not empty promises—anything less makes them squarely responsible for the failure of these talks and the betrayal of billions across the globe," Climate Activist  Harjeet Singh said in a comment. 

Juel, however, observed a lack of leadership from the COP29 presidency. While they succeeded in event management, they failed in conducting the necessary groundwork, including bilateral meetings and fostering consensus. This failure resulted in two weeks of negotiations without a decision.

"Developing countries had demanded public funding through UNFCCC's official financial entities, but the text prioritises a mixed source of public and private funding, with multilateral development banks favoured as channels," Juel said.

Debates over the balance of adaptation and mitigation funds have been significant even on Friday. The developed world has focused too heavily on mitigation, while the climate-vulnerable countries' demand has been for greater emphasis on adaptation and loss and damage. 

As a result, COP29 risks being dubbed a historic failure. 

"Since COP29 is widely regarded as a finance COP, failure to achieve consensus on finance could lead it to be considered a failed conference," Juel added.