COP29 launches in Azerbaijan aiming to renew climate financing goal unmet for majority of past decade

Monday marked the start of the 29th Conference of the Parties (COP29) in Baku, Azerbaijan, where representatives from around the world are gathering to discuss and negotiate solutions to the climate crisis. 

At the forefront of this year’s negotiations is the New Collective Quantified Goal on Climate Finance for developing countries. 

The goal builds on a previous commitment made at COP15 in Copenhagen, 2009, when developed countries pledged to mobilize US$100 billion per year in climate financing for developing countries by 2020 — a deadline that was later extended to 2025. 

However, between 2009 and 2024, wealthy countries met this target only once, in 2022. Even then, the funds primarily took the form of loans rather than the grants intended as compensation for centuries of climate damage caused by industrialization in the Global North. According to a recent report by the Organization of Economic Cooperation and Development, loans presented the lion’s share of public climate finance in 2022, at 69 percent — most with interest — while only 28 percent were actual grants.

Negotiations in Baku this year will also attempt to activate the Loss and Damage Fund, another initiative intended to compensate developing countries for climate impact caused by industrialized countries. 

The establishment of the fund at Egypt’s COP27 marked a historic achievement as it was a coherent mechanism for holding industrialized nations accountable. The fund was officially launched the following year in Dubai’s COP28 with an initial $300 million contribution.

Yet its operations continue to be stalled by political maneuvering from wealthy countries. The latter have long resisted the initiative, fearing it could lead to legal liabilities. Eventually, the fund was temporarily placed under the World Bank’s oversight, though concerns remained about the United States influence over it.

Resistance from wealthier countries extends beyond funding — they are also pressing to widen the pool of contributors and narrow the list of recipients eligible for funding. Tensions surfaced between developed and developing countries most affected by climate change during 2022’s negotiations for the establishment of the fund, over contributor and recipient designations. Under pressure from wealthy countries, negotiators agreed to limit compensation to “particularly vulnerable” nations rather than the most vulnerable, effectively restricting eligibility to a limited number of states, especially island countries which are impacted by environmental disasters on an annual basis.

Simultaneously, wealthy countries are advocating to reclassify certain countries from developing to developed status, seeking to move countries like China and Gulf states — classified as developing in the 1990s climate talks — into the same category as Europe and the US, broadening the base of contributors and reducing the number of funding recipients.

Developing countries, meanwhile, are pushing to raise the funding target above $100 billion, given growing financial needs on the ground, now estimated to be around $1 trillion annually, according to Debbie Hiller, a policy lead at the United Nations Framework Convention, the UN arm negotiating agreements to limit climate change.

Beyond compensation, the conference aims to renew global efforts to limit fossil fuel consumption and stabilize global temperatures. 

The World Meteorological Organization predicted this year that there is an 80 percent likelihood the world’s temperature will exceed pre-industrial levels by 1.5 degrees celsius for at least one of the next five years, which would mean approaching the long-term climate goals set in the Paris Agreement, which aims for the same increase but over decades. The report warns that between 2024 and 2028, the 1.5C threshold may be breached in at least one year, amplifying risks tied to extreme climate events.

The conference is also under growing criticism from scientists and activists on what they described as concerns regarding Azerbaijan’s rights record. In April, Azerbaijani authorities arrested human rights and climate justice advocate Anar Mammadli, who now faces extended imprisonment on what Amnesty International described as bogus charges.

Azerbaijan, a leading global oil producer since 1899 that expanded production in recent years, faces criticisms of using the summit to greenwash its image. A BBC report said that the chief executive of the Azerbaijani COP29 team Elnur Soltanov — also deputy energy minister and a board member of the national energy company — was leveraging his position to organize discussions around potential fossil fuel deals in Azerbaijan, after he was caught discussing "investment opportunities" in the state oil and gas company with a man posing as a potential investor.

US government data shows that the Azerbaijani economy is heavily reliant on the sale of oil and gas, with the sector contributing to over 90 percent of its export revenues and accounting for more than half of its state budget. 

And while Global North countries press fossil fuel-dependent states to cut production and shift toward clean energy, the EU signed a deal in 2022 to double its gas imports from the country, to reach 20 billion cubic meters annually, by 2027.