Wealthy countries back raising COP29 climate deal to $404 billion, sources say

BAKU - The European Union, the United States and other wealthy countries at the COP29 climate summit have agreed to raise their offer of climate funding to US$300 billion (S$404 billion) per year by 2035 to help developing nations grapple with climate change, sources told Reuters on Nov 23, after a previous proposal was dismissed as insultingly low.

The summit had been due to finish on Nov 22 but ran into overtime as negotiators from nearly 200 countries – who must adopt the deal by consensus – tried to reach agreement on a climate funding plan for the next decade.

A US$250 billion proposal for a deal, drafted by Azerbaijan’s COP29 presidency on Nov 22, was

panned by developing countries as insufficient.

It was not clear if the wealthy countries’ revised position had been formally communicated to developing countries at COP29, and whether it would be enough to win their support.

The COP29 talks have laid bare the divisions between wealthy governments constrained by tight domestic budgets and developing nations reeling from the soaring costs of storms, floods and droughts fuelled by climate change.

Past failures to meet climate finance obligations have also made developing countries mistrustful of new promises.

The new goal is intended to replace developed countries’ previous commitment to provide US$100 billion in climate finance for poorer nations per year by 2020. That goal was met two years late, in 2022, and expires in 2025.

Five sources with knowledge of the closed-door discussions said the EU had agreed it could accept the higher number. Two of the sources said the US, Australia and Britain were also on board.

A European Commission spokesperson and an Australian government spokesperson both declined to comment on the negotiations. The US delegation at COP29 and Britain’s Energy Ministry did not immediately respond to requests for comment.

With no formal update yet of the deal draft from the COP29 presidency, the mood was tense among negotiating groups.

“There is no clarity on the way forward. There is no clarity on the political will that we need to get out of this,” said Panama’s lead negotiator Juan Carlos Monterrey Gomez.

Three negotiators described the mood in the room as angry.

Sierra Leone’s environment minister Abdulai Jiwoh declined to comment on the US$300 billion figure, saying: “We’re still working on the number with other parties.”

Pushing for US$390 billion

Ms Marina Silva, Brazil’s minister of the environment and climate change, had said on Nov 22 that the Amazon rainforest nation – which is set to host 2025’s COP30 climate summit – was pushing for US$390 billion annually from developed countries by 2035.

“We cannot leave Baku without a decision that lives up to the challenge we are facing,” she said via a translator. “We need to reach $300 billion by 2030, then $390 billion by 2035 so we can achieve this goal.”

Delegates were awaiting a new draft text of the deal on climate finance on Nov 23 after negotiators worked through the night to bridge wide gaps in their positions.

Deal also needed on details

Any deal would require agreement on more than just the headline amount.

Negotiators have worked throughout the two-week summit to address other critical questions on the target, including who is asked to contribute and how much of the funding is on a grant basis, rather than provided as loans.

The roster of countries required to contribute – about two dozen industrialised countries, including the US, European nations and Canada – dates back to a list decided during UN climate talks in 1992.

European governments have demanded others join them in paying in, including China, the world’s second-biggest economy, and oil-rich Gulf states.

The recent election of Donald Trump – who has called climate change a hoax – as US president has cast a cloud over the talks in Baku. Trump, who takes office in January, has promised to again remove the US from international climate cooperation, so negotiators from other wealthy nations expect the world’s biggest economy will not pay into the climate finance goal during Trump’s impending four-year term.

A broader goal of raising US$1.3 trillion in climate finance annually by 2035 – which economists say matches the sum needed – was included in the draft deal published on Nov 22, and would include funding from all public and private sources.

Poorer countries have warned that a weak finance deal at COP29 would undercut their ability to set more ambitious targets to cut the greenhouse gas emissions causing climate change. REUTERS