In the wee hours Sunday at the United Nations climate talks, countries from around the world reached an agreement on how rich countries can cough up the funds to support poor countries in the face of climate change.
It's a far-from-perfect arrangement, with many parties still deeply unsatisfied but some hopeful that the deal will be a step in the right direction.
World Resources Institute president and CEO Ani Dasgupta called it “an important down payment toward a safer, more equitable future,” but added that the poorest and most vulnerable nations are “rightfully disappointed that wealthier countries didn’t put more money on the table when billions of people’s lives are at stake.”
The summit was supposed to end on Friday evening but negotiations spiraled on through early Sunday. With countries on opposite ends of a massive chasm, tensions ran high as delegations tried to close the gap in expectations.
What was the finance deal agreed at climate talks?
Rich countries have agreed to pool together at least $300 billion a year by 2035. It’s not near the full amount of $1.3 trillion that developing countries were asking for, and that experts said was needed. But delegations more optimistic about the agreement said this deal is headed in the right direction, with hopes that more money flows in the future.
The text included a call for all parties to work together using “all public and private sources” to get closer to the $1.3 trillion per year goal by 2035. That means also pushing for international mega-banks, funded by taxpayer dollars, to help foot the bill. And it means, hopefully, that companies and private investors will follow suit on channeling cash toward climate action.
The agreement is also a critical step toward helping countries on the receiving end create more ambitious targets to limit or cut emissions of heat-trapping gases that are due early next year. It’s part of the plan to keep cutting pollution with new targets every five years, which the world agreed to at the U.N. talks in Paris in 2015.
The Paris agreement set the system of regular ratcheting up climate fighting ambition as away to keep warming under 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels. The world is already at 1.3 degrees Celsius (2.3 degrees Fahrenheit) and carbon emissions keep rising.
What will the money be spent on?
The deal decided in Baku replaces a previous agreement from 15 years ago that charged rich nations $100 billion a year to help the developing world with climate finance.
The new number has similar aims: it will go toward the developing world's long laundry list of to-dos to prepare for a warming world and keep it from getting hotter. That includes paying for the transition to clean energy and away from fossil fuels. Countries need funds to build up the infrastructure needed to deploy technologies like wind and solar power on a large scale.
Communities hard-hit by extreme weather also want money to adapt and prepare for events like floods, typhoons and fires. Funds could go toward improving farming practices to make them more resilient to weather extremes, to building houses differently with storms in mind, to helping people move from the hardest-hit areas and to help leaders improve emergency plans and aid in the wake of disasters.
A $300B a year deal for climate cash at UN summit sparks outrage
The Philippines, for example, has been hammered by six major storms in less than a month, bringing to millions of people howling wind, massive storm surges and catastrophic damage to residences, infrastructure and farmland.
“Family farmers need to be financed," said Esther Penunia of the Asian Farmers Association. She described how many have already had to deal with millions of dollars of storm damage, some of which includes trees that won't again bear fruit for months or years, or animals that die, wiping out a main source of income.
“If you think of a rice farmer who depends on his or her one hectare farm, rice land, ducks, chickens, vegetables, and it was inundated, there was nothing to harvest,” she said.
Why was it so hard to get a deal?
Election results around the world that herald a change in climate leadership, a few key players with motive to stall the talks and a disorganized host country all led to a final crunch that left few happy with a flawed compromise.
The ending of COP29 is "reflective of the harder geopolitical terrain the world finds itself in,” said Li Shuo of the Asia Society. He cited Trump's recent victory in the US — with his promises to pull the country out of the Paris Agreement — as one reason why the relationship between China and the EU will be more consequential for global climate politics moving forward.
Developing nations also faced some difficulties agreeing in the final hours, with one Latin American delegation member saying that their group didn't feel properly consulted when small island states had last-minute meetings to try to break through to a deal. Negotiators from across the developing world took different tacks on the deal until they finally agreed to compromise.
Meanwhile, activists ramped up the pressure: many urged negotiators to stay strong and asserted that no deal would be better than a bad deal. But ultimately the desire for a deal won out.
Some also pointed to the host country as a reason for the struggle. Mohamed Adow, director of climate and energy think tank Power Shift Africa, said Friday that “this COP presidency is one of the worst in recent memory,” calling it “one of the most poorly led and chaotic COP meetings ever.”
The presidency said in a statement, “Every hour of the day, we have pulled people together. Every inch of the way, we have pushed for the highest common denominator. We have faced geopolitical headwinds and made every effort to be an honest broker for all sides.”
Shuo retains hope that the opportunities offered by a green economy “make inaction self-defeating” for countries around the world, regardless of their stance on the decision. But it remains to be seen whether the UN talks can deliver more ambition next year.
In the meantime, “this COP process needs to recover from Baku,” Shuo said.