Climate Deal: ‘it Isn’t Nearly Enough, But It’s A Start’

BAKU, Azerbaijan — Countries agreed to a deal early Sunday that asks rich, developed nations to pay at least $300 billion to help poorer countries shift their economies away from polluting fuels, bringing to a close two weeks of contentious talks that threatened at multiple points to fall apart.

It didn’t come easily, or without caustic criticism.

The figure is short of what developing countries had been calling for, and is not in line with the trillions that they’ll need over the next decade. But it was likely the best they could get at a time of geopolitical turbulence and hardening divides between wealthier and more impoverished nations, with a second Donald Trump era looming in Washington.

Developing countries responded with a mix of acceptance and anger.

“This has been stage managed, and we are extremely, extremely disappointed,” Chandni Raina, India’s negotiator, said to the plenary hall after the gavel fell. Calling the sum “paltry” and the deal “nothing more than an optical illusion,” she said her country — the most populous on Earth — “opposes the adoption of this document.”

Tina Stege, the climate envoy of the Marshall Islands, denounced the climate talks as a display of “political opportunism,” then added: “We are leaving with a small portion of the funding climate-vulnerable countries urgently need. It isn’t nearly enough, but it’s a start.”

In the end, it came down to a deal between old and new powers, an unswerving Saudi petrostate and a Democratic U.S. government that has staked its legacy on climate leadership but knows its priorities will be taking at least a four-year hiatus while Trump occupies the White House.

The talks also produced a deal that settles the rules for global carbon markets, a profit-oriented means of raising climate money, after a decade of negotiations. That could help countries meet their global climate targets and deliver money to developing nations if they can overcome issues with shoddy credits that have plagued existing voluntary markets.

But the bigger prize was the new funding goal, and all that came with it. The $300 billion or more will come from public finance and related cash transfers, including money delivered through multilateral development banks from many countries — even developing ones such as China.

That in effect pulled China and other developing nations, which already contribute to the World Bank and other international financial institutions, into helping rich countries meet their new obligations.

The EU and U.S. had pressed for China and other high-polluting, emerging economies to join them as contributors to the new finance target, and that provision allows the EU, U.K. and U.S. to claim a partial victory.

“The new finance goal rightly reflects the importance of going beyond traditional donors like Britain, and the role of countries like China in helping those on the frontline of this crisis,” said British Energy Secretary Ed Miliband.

The deal also opened up the possibility for developing nations such as China to contribute even more, or not, on a voluntary basis without having their status as developing countries reclassified — which also could let both sides claim a win.

“We are not prepared to erase the definitions,” said a Brazilian negotiator, who was granted anonymity to discuss internal deliberations.

The final text package also nodded to an agreement at last year’s climate summit in which countries pledged to move away from using fossil fuels, but this time did it without referring directly to the energy sources that cause climate change. Nor did it lay out actions to accelerate toward that goal, which European and U.S. negotiators had pushed for. That push was rebuffed by Saudi Arabia’s delegation, along with a group of emerging economies that included China and India.

“It's disappointing,” said Miliband. “It's important not to make any bones about it.”

The agreement, and the days of chaos preceding it, tested the ability of oil-rich Azerbaijan to host the crucial climate talks while sparring with European governments and critics of its democracy and human rights record. Next year, another oil producer — Brazil — will take on the challenge, with President Luiz Inácio Lula da Silva hosting the talks in Belém, a port city known as the “gateway to the Amazon.”

Battle lines form

The money battle divided rich countries and poorer ones. Wealthier countries such as the U.S., Canada, the U.K. and Germany grew their economies on polluting oil, gas and coal and have the money to shift to greener sources. In developing nations, by contrast, tens of millions of people still don’t have electricity and government budgets are constrained, often by debt repayments.

But the divide is even more complicated than that. Small islands and dozens of deeply poor countries have contributed few of the emissions warming the planet and yet are highly vulnerable to the heat waves, floods and other disasters that warming inflicts. Then there are oil-rich Gulf states and emerging economies such as Brazil and India, whose greenhouse gas emissions are rapidly accelerating. And China is the world’s largest carbon polluter, a green energy powerhouse and second-largest economy.

If poorer countries don’t have the money to move away from polluting activities, everyone suffers.

“Finance is not a hand-out,” U.N. Secretary-General António Guterres told reporters as the talks entered their final days. “It’s an investment against the devastation that unchecked climate chaos will inflict on us all.”

The finance battle has been a long time coming. And countries have spent the past three years preparing to resolve it at these talks, known as COP29.

The new target replaces a 15-year-old pledge in which richer countries promised to deliver $100 billion annually from 2020 to 2025. They didn’t meet that pledge until 2022.

Since then, the costs of climate-fueled disasters and the money needed to shift entire economies away from polluting energy have dramatically accelerated. Developed countries now need roughly $1 trillion each year in external funding through 2030 to meet their climate targets, according to a study by U.N.-backed experts. Public-related finance flows should account for $300 billion until 2030 — in line with where the talks landed. That figure needs to increase to at least $390 billion a year by 2035, the study says.

Yet an early draft of the new proposal caused an uproar in the convention halls on Thursday for being full of options or missing sections entirely. Developed countries offered no new figure. Privately, European diplomats called the package “empty,” “not helpful,” “unserious” and, in one instance, “shit.”

Things did not get much better from there.

Even after POLITICO reported on Monday that the European Union had discussed an annual finance target of $200 billion to $300 billion, developed countries refused to name any number or range they would be willing to offer, or to disclose details of their internal negotiations. Their reluctance to put money on the table prompted accusations from many developing countries that they weren’t negotiating in good faith.

Meanwhile, the U.S. delegation — just two months away from having a new president who rejects the reality of climate change — maintained a quiet presence. When nearly a dozen countries held a press conference Thursday to announce they would set “ambitious” new climate targets by February, American officials showed up even though the U.S had dropped its participation in the initiative.

“You can either get things done or you can take the credit,” a senior U.S. official told POLITICO.

They’ve been equally mum on the new finance target, saying only that they were pushing for something ambitious but achievable.

U.S. officials have tried to put their best spin on Washington’s reluctance to stake bolder positions in public. On finance, they’ve said they’re negotiating for a deal they can eventually contribute to — whenever an American president wants to do so.

“I think we were an important voice for ambition in these negotiations,” John Podesta, Biden’s senior climate adviser, told reporters after the deal landed Sunday.

Others at the talks have had a saltier take on the American posture. The U.S. officials have “behaved as if they have got more influence than they have when they have only got weeks left in power,” said one European diplomat who was granted anonymity to speak freely.

The Europeans, in turn, said $300 billion was as high as they could go. But even among the EU delegations, some diplomats wondered if leaving it until the final days of the summit to discuss a specific target was the right way to go.

“Why, why, why would you wait till two days before crunch time to say a number?” one senior European diplomat said on Saturday afternoon. “I don’t think we’ve been handling this well.”

Developing countries say outside funding is necessary for them to meet their national climate targets and harden their defenses against a growing onslaught of extreme weather. If the ultimate purpose of these talks is to get countries to take increasingly stronger action to lower their planet-warming pollution, then money is the thing that drives them forward.

“Mitigation is in our interest because we can't adapt to a world of 3 degrees or 2.8 forever,” said Ali Mohamed, climate envoy of Kenya, which currently chairs the Africa Group of negotiators. “However, that requires investment, that requires support.”

A proposal offering $250 billion finally dropped on Friday afternoon, to much criticism from the poorer countries and vulnerable island states. The next offer from wealthy governments was a $300 billion take-it-or-leave-it proposal Saturday that landed with a thud on the more than 100 developing countries.

In a closed-door meeting Saturday afternoon meant to allow countries to hash out their differences, a group of the world’s poorest countries, known as the LDCs, said they were temporarily leaving the negotiations because they hadn’t been included.

“We don’t think as LDCs we have been consulted when these versions were drafted,” said Jiwoh Emmanuel Abdulahi, environment minister for Sierra Leone.

The bloc of small island nations echoed that sentiment.

“We feel as though we’re left with nothing from this COP,” Samoan natural resources minister Cedric Schuster, representing the Alliance of Small Island States, told other countries in the meeting. “Is this how we treat the countries with the moral high ground in the process, who stand to lose the most and have already lost so much?”

The final agreement contained a small but crucial difference: Wealthy countries would offer at least $300 billion.

“I had hoped for a more ambitious outcome … to meet the great challenge we face,” Guterres said after the summit ended. “But this agreement provides a base on which to build.”