US$250b for climate financing from wealthy to developing nations is low: Grace Fu on COP29

BAKU, Azerbaijan – The proposed amount of US$250 billion (S$336 billion) a year by 2035, to be given by developed nations to developing countries as part of a trillion-dollar climate finance goal, is a low figure, said Minister for Sustainability and the Environment Grace Fu on Nov 23.

She added that she stands with the Alliance of Small Island States (Aosis) and the Small Island Developing States (Sids) to ask for a larger amount from richer nations.

The Republic is part of both groupings.

Ms Fu spoke to the media in a wrap-up interview at her hotel in Baku near the end of the UN climate change summit (COP29), before her return to Singapore.

The summit was supposed to end on Nov 22 but lasted longer, with a final plenary and outcome expected on Nov 24.

As a “finance COP”, the main aim of COP29 is to set a climate finance goal that will help developing countries – which have contributed less to climate change – decarbonise and fund measures to limit the impacts of floods, typhoons and heatwaves.

In the latest proposal on the finance goal, released on the afternoon of Nov 22, developed countries proposed taking the lead to channel US$250 billion per year by 2035.

This amount will come from a wide variety of sources, including public and private, multilateral funds and alternative sources of funding.

According to international media reports in the afternoon of Nov 23, sources said wealthy nations are backing a higher commitment of US$300 billion, after much backlash over the US$250 billion proposal from developing countries, the Global South and civil society.

But this will only be verified once COP29 releases a revised proposal.

Currently, the US$250 billion is the proposed core of the finance goal. The aim is to raise at least US$1.3 trillion per year by 2035, with this amount achieved by scaling up finance from all public and private sources. 

According to the Paris Agreement, developed nations like the US, Japan and Australia are obligated to channel climate finance to developing nations.

The proposed amount by richer countries was met with backlash from Aosis, the Africa Group and other developing countries.

In a statement on Nov 22, Aosis said it is deeply disappointed with the proposal, adding that it basically asks developed nations “how low can you go?” on climate ambition.

The proposed US$250 billion a year by 2035 “is no floor, but a cap that will severely stagnate climate action efforts... Sids for instance receive a mere 1 per cent of climate finance. Even with a floor in the (climate finance goal), we will still be the least recipient, as will the least developed countries”, noted Aosis in a statement.

The groups of states added that the draft proposal ignored the vulnerable countries’ requests for at least US$39 billion allocated to Sids and at least US$220 billion for least developed countries.

“We cannot be expected to agree to a text which shows such contempt for our vulnerable people,” added Aosis.

Ms Fu said: “The US$250 billion, I think, is low... But the negotiations are ongoing, so I don’t want to pre-empt the outcome.”

Overall, it has been a “difficult, long week” of climate negotiations, she noted, adding that she was hoping that negotiations on the amount of the climate finance fund could have started earlier.

COP29 started on Nov 11, but the ministers usually arrive in the second week of the summit to hold high-level meetings and land agreements on outstanding issues.

“We hope that the structure (of the finance goal) doesn’t get unravelled as we go into the last moment of the negotiation, to get to an agreed position,” said Ms Fu.

She added that unlike previous years, COP29 did not receive a specific direction from the recent Group of 20 (G-20) summit in Brazil.

On Nov 18, the G-20 failed to rescue stalled climate talks in Azerbaijan by boosting funding for developing countries struggling with global warming.

G-20 members, which are divided on who should pay, did not make such commitments, saying only that the trillions of dollars needed would come “from all sources”.

Ms Fu also noted that the collaboration between the US and China at this climate summit was different from COP28 in Dubai.

President-elect Donald Trump is expected to pull the US out of the Paris Agreement – as he did before – and may also withdraw from the UN Framework Convention on Climate Change, under which COPs are convened.

“So these two (aspects) were voids that parties have to work with, and I think the difficult discussions and negotiations to land on common points were harder than before,” said Ms Fu.

“Going into the next COP, I think it will have a different reality as far as the political will to proceed, and there will be other issues that COP30 has to deal with,” she added.

Ms Fu noted that the focus of COP29 had been on finance, and other issues had not received the attention they deserved.

Among new draft texts released on Nov 22, Dubai’s COP28 landmark deal for countries to transition away from fossil fuels was not mentioned in two key climate mitigation-related documents.

A draft document related to the “just transition” included the phrase “transitioning away from fossil fuels in energy systems”.

The “just transition” initiative aims to ensure that the goals of the Paris Agreement are achieved justly and equitably.

The European Union had warned countries against backsliding on the pledges made in 2023 regarding fossil fuels. 

Ms Fu said: “We really don’t want to see backtracking, so we’d like to see the decisions that have been made in the past enshrined and forming the basis of future negotiations.”

Looking towards COP30 in Brazil, she added that there will be more focus on adapting to climate impacts.

Adaptation has often been overshadowed by discussions on reducing carbon emissions at COPs.

“We would like to play an active role in finding new ways of financing adaptation, which has always been quite difficult to monetise and make it commercially viable for the private sector,” she said.