The $300bn deal for rich countries to help poorer nations struck at the UN climate summit early Sunday was only reached through frantic diplomacy, including a high-level meeting the night before in a VIP room of the Baku stadium.
The meeting of ministers from both wealthy and developing nations included Colombian climate minister Susana Muhamad; Kenya’s Ali Mohamed; Brazil’s Ana Toni, Ed Miliband from the UK and Germany’s Jennifer Morgan, those aware of the late night Friday gathering told the FT.
It took place as the countries gathered for the UN COP29 summit remained gridlocked over the size and shape of a landmark deal to provide money to developing countries hit by the worst effects of climate change.
But it also came against the backdrop of a separate battle for the inclusion of an explicit reference to next steps in the transition away from fossil fuels agreed at the last year’s UN summit in Dubai, to strengthen the pledge.
This was blocked by Saudi Arabia and Russia, and was only given an indirect reference in the final outcome, maintaining the status quo.
However, fossil fuel reliant nations’ failed in their push for a reference to “transition fuels” — taken to mean gas — when the overall agenda item was postponed after objections from a Latin American and Caribbean nations alliance, Switzerland, the Maldives, Fiji, Canada and Australia.
The cohort of ministers who met behind the scenes ultimately forced a finance deal that few countries were happy with, but many feared would be even harder to secure with Donald Trump in the White House and major Western economies under pressure.
It followed two weeks of intense diplomacy between western negotiators and Chinese officials in a successful bid to get Beijing on side to contribute voluntarily.
The ministers sought a compromise to ensure poorer nations could access enough cash to deal with climate change, while being acceptable to electorates in richer countries worried about inflation and stretched budgets.
Almost 200 countries had accepted the proposal for wealthy nations to take the lead in providing at least $300bn a year by 2035 for developing nations. It remained far short of the $500bn the G77 countries said they needed, but was improved from an initial $250bn offer.
But at 3am Baku time, India was the only holdout, according to two delegations. The country was concerned about both the sum and issues over how the finance would be counted.
“Everyone was trying to call Modi but he was not picking up his phone,” said one negotiator. The EU was among those that had “high level contact” with Delhi late on Saturday night, an EU official confirmed.
After the COP29 presidency quickly gavelled the agreement, it sparked fury from India. “This has been stage-managed,” Indian negotiator Chandni Raina said. “We cannot accept it.” The objection, followed by a series of other developing nations, was noted.
The talks had earlier almost collapsed after a group of about 80 countries vulnerable to climate change walked out of a critical meeting. The final plenary was suspended multiple times to allow informal talks between countries, with ministers and heads of delegations huddled in groups in the giant meeting room, poring over potential compromises.
The new proposals included a key aspect of the ministers’ talks on Friday night: a plan to bridge the gap between the lower figure rich countries were willing to stump up and the $1.3tn economists say is needed in international climate finance for the developing world,
Called the “Baku to Belém Roadmap to 1.3T”, the Azerbaijani and Brazilian teams each leading COP29 and COP30 had the job of finding how to scale up finance.
There was also a promise to look at the goal again in five years, a special mention of the needs of low-lying islands and the poorest countries, plus a concession that the amount should be specified as “at least” $300bn.
According to European officials, adjusting this figure for inflation — which could cut more than $30bn from the total — helped bring on board the finance ministries from developed nations.
Ralph Regenvanu, climate envoy for Vanuatu, reflected the view of small island nations that the final commitment was “not enough”.
“Based on our experience of such pledges, we know they will not be fulfilled,” he said, a reference to the previous $100bn finance goal set more than a decade ago and reached two years late,
But Ryan Neelam, director of public opinion and foreign policy programme at the Lowy Institute think-tank, said developing nations knew the “political direction of many [western] countries was not going in their favour”.
If they failed to secure a deal, it was “going to probably be a tougher discussion in future COPs about financing”, he said.
The final finance agreement relied only partly on grants-based financing from richer nations, but also a long list of other “innovative” financing.
This meant “first-loss” instruments, where the public finance institutions agree to bear the first losses of an investment to drum up private sector interest, appeared alongside proposals for guarantees, local currency financing and foreign exchange risk instruments, as well as possible levies such as shipping or airline taxes, to be determined.
This range of options acknowledged the “systemic shift” needed in the financial system to pay for climate change, said Rob Moore, a former UK climate finance negotiator, now at think-tank E3G.
In the closing hours of COP29, Brazil’s Marina Silva promised that next year’s summit in the city of Belém, at the mouth of the Amazon, would rebuild trust among countries.
EU climate commissioner Wopke Hoekstra told the FT he expected global diplomacy to remain tough, but the breakthrough at COP29 should “move the needle” for the next summit.
“We are living in exceptionally difficult times as a global community. A win at this COP is essentially a win for geopolitics.”
Climate Capital
Where climate change meets business, markets and politics. Explore the FT’s coverage here.
Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here
Source link
