The landing of a fragile deal

After two weeks of deliberations, and an extra day, COP29 finally reached a deal in the wee hours of Sunday morning. But it was not the deal Africa and other vulnerable regions hoped for. The rich countries – the historical polluters most responsible for the climate crisis – focused almost completely on shifting responsibility to other growing economies.

But developing countries worked with partners to realign the global financial system to tackle climate change, represented by the $1.3 trillion goal in 2035. In the end, COP29 delivered a down payment of $300 billion a year by 2035.

As Avinash Persaud, a climate finance expert, put it, “It was hard fought over, but at $300 billion per year, we have arrived at the boundary between what is politically achievable today in developed countries and what would make a difference in developing countries.”

The Baku deal will, however, only work if this money is primarily allocated to help vulnerable countries become more resilient to climate change.

Down payment on a climate debt owed to the most vulnerable

Not the deal most hoped for, but the COP29 consensus provides a chance to continue fighting climate change. This deal is essentially a floor, not a ceiling, said a commentator. A down payment on funds due to vulnerable countries to build resilience. The work is now cut out to ensure the developed nations deliver $1.3 trillion in climate action by 2035. All eyes are now trained on Nationally Determined Contributions (NDCs) that are due in February, as the road to COP30 in Brazil, which has been described by host President Lula as a “turnaround” COP, starts in earnest.

Africa leading the charge

With rich countries slow to rise to the occasion in Baku, a new leadership group emerged in Baku, and African nations and others from the Least Developed Countries (LDCs) and Small Islands Developing States (SIDS) led the charge. Kenya and Sierra Leone, in particular, were the leading lights, working with others like Columbia to push for a better deal from Baku. Kenya’s climate envoy, Mohamed Ali, who also chairs the African Group of Negotiators, and Sierra Leone’s Minister of Environment, Jiwoh Abdulai, pressured the COP presidency to deliver a better deal.

“We must have inclusive approaches so that no parties are left behind. As the African Group, we are prepared to reach an agreement here in Baku, and indeed, we must reach an ambitious agreement in all respects, but we are not prepared to accept things that cross our red lines,” Ali offered as the negotiations dragged on.

“LDCs remain committed to the COP process, but the developed world needs to show good faith, leadership and commitment to this process. They have to pay their climate debt, which is in the trillions,” said Jiwoh.

Rohey John Manjang, Gambia’s minister of environment, called out the rich nations over what she termed a deliberate attempt to delay climate justice and block economic progress for Africa

“This COP has shown how developed countries want to shirk their climate finance responsibilities to vulnerable countries. It is sad that after months of negotiations, they have waited till the last official day of COP to table a dismal figure, leaving no sufficient time for deliberations amongst parties, and to make it worse, the figure is shockingly too low,” she said.

Bearing the weight

The Baku deal was widely described as “a betrayal,” “insufficient,” and “an optical illusion.” Representatives from the Alliance of Small Island States (AOSIS) and the Least Developed Countries (LDCs) walked out of the talks in protest but later returned. A “No Deal is Better Than Bad Deal” greeted the next-to-final text, with climate groups urging negotiators to walk out rather than accept a bad deal.

Climate finance expert Faten Aggad put it boldly: “It is in the interest of our countries to know when to walk out. A no deal is better than a deal that commits African countries to what is undeliverable without serious climate finance. We cannot bear the weight of the historical responsibility alone. We need to draw a line in the sand.” Solid numbers backed the #PayUsNow call:

(i) Mitigation: no less than $300 billion annually in grant-equivalent finance
(ii) Adaptation: no less than $300 billion annually in grant-equivalent finance
(iii) Loss and damage: no less than $400 billion in grant-based finance

Unruly, complex Article 6: A watershed moment

Climate experts waged a valiant fight against a flawed and unchecked carbon markets framework at COP29 in Baku. However, the adopted Article 6 risks facilitating “cowboy” carbon markets at a time when the world desperately needs a “sheriff”. Governments approved a concerning package, a weak one, that could hinder rather than help emissions reduction.

While some countries fought and pushed hard for transparency and unaccountability under article 6.2, the gains were minimal reflecting a preference for quick fixes over long-term and much needed solutions.

Experts warned that the adoption of Article six without discussion was a means to bypass consultations with States and departed from the Paris Agreement’s party-driven process.

“The fast-tracking of this decision raises serious concerns about the prioritising of carbon markets over other, more effective climate solutions and other pending decisions on climate finance, without the necessary transparency and due consideration of justice issues and negative human rights impacts,” UN experts warned. “There are founded concerns that carbon markets allow polluters to continue to pollute, while distracting from the need to address the direct causes of climate change, through phasing out of fossil fuels.”

Isa Mulder, a policy expert at Carbon Market Watch, said the outcome of Baku leaves the framework for Article 6.2 dangerously loose and opaque, tailor-made for those pushing to turn it into a free-for-all.

Backtracking on COP28

The COP Presidency deferred the final decision on the UAE Dialogue to the mid-year talks at Bonn and COP30 after parties failed to reach consensus on the text on the global stocktake, with Saudi Arabia raising contention on language on transitioning away from fossil fuels.

G20: No time to lose

G20 leaders at the Rio summit (November 18-19, 2024), while reaffirming their commitment to strengthening multilateral climate action, supported calls for a strong finance deal at COP29 in Baku, including more climate cash flows to developing countries. The Rio Declaration recommits to the COP28 Dubai consensus for countries to transition away from fossil fuels and triple renewable energy.

The summit, however, did not offer concrete numbers for the new climate finance goal (NCQG), only outlining the need to rapidly and substantially scale up climate finance from billions to trillions from all sources.

Host Brazil President Luiz Inacio Lula da Silva criticised developed countries for falling short of their promise to deliver $100 billion of climate financing annually to developing countries by 2020. He urged G20 leaders to accelerate their national climate targets, calling on them to reach net zero climate emissions five to 10 years ahead of schedule.

“We have to do more and better. There is no time to lose,” Lula said.

The G20 also announced an alliance to combat hunger and poverty around the globe.

Africa’s permanent seat at the big table

The Rio G20 summit was Africa’s first at the big table after the African Union (AU) was given a permanent seat earlier this year. The seat was long overdue, said Raila Amolo Odinga, former prime minister of Kenya and candidate for Chair of the AU Commission, reflecting Africa’s growing importance and the severity of its crises. But representation alone is not enough, he cautioned, as it must translate into substantial financial support and tangible benefits for local communities bearing the brunt of a climate crisis they did not create.

“Africa needs substantial financial investment and technical support to unlock its vast potential in renewables. To this end, the continent’s development must be central to the global push to triple renewable energy production by 2030. The world’s largest economies have a responsibility to dismantle the entrenched structures that keep Africa and other developing regions impoverished. The path forward is clear: wealthy G20 countries must move beyond rhetoric and provide sustainable, long-term climate financing and concessional loans to help the Global South close the current funding gap,” he said.

South Africa takes over the G20 presidency from Brazil

South Africa will over the next year be the G20 Presidency from December – becoming the first African country to chair the group of 20 major economies.

“As South Africa, we undertake to advance the work of the G20 towards achieving greater global economic growth and sustainable development. We will work to ensure that no one is left behind,” President Cyril Ramaphosa said in Rio. “We will use this moment to bring the development priorities of the African Continent and the Global South more firmly onto the agenda of the G20.”

Analysts said that this presidency presents a unique opportunity to reform global economic governance by integrating sustainable finance into the conversation on debt vulnerability, particularly in Africa. It also provides a critical platform to advance the reform of global debt governance by aligning debt treatment initiatives with climate resilience and sustainable development goals.

Proposed tax on billionaires gets G20 leaders’ support

G20 leaders rallied behind the Rio declaration to tax the wealth of super-rich individuals to fight widening inequality. The declaration text doesn’t offer a specific tax rate or range. However, estimates indicate that a two per cent tax on the wealth of the super-rich could generate $250 billion annually, to be invested in combating inequality and funding a green transition. This elite group of ultra-wealthy individuals comprises around 3,000 people whose combined assets total approximately $15 trillion – five times more than the GDP of Africa, which has a population of about 1.4 billion.

Biden pledges $4 billion to IDA

US President Joe Biden pledged a $4 billion US contribution to the International Development Association (IDA) – the World Bank’s concessional fund – at the G20 summit in Rio. This is up from the $3.5 billion contribution that the US previously made. Norway also pledged a 50 percent increase in its IDA contribution to NOK 5 billion ($451 million), as did Denmark, a 40 per cent increase to DKK 3.3 billion ($461 million).

The IDA fund, which provides mainly grants and very low-interest loans to low-income countries, is replenished every three years. A pledging conference for donor countries will be held on December 5-6 in Seoul, setting the stage for the next cycle starting in July 2025. At the IDA 21 summit in Nairobi in April, African leaders called for a robust IDA replenishment of $120 billion, up from the $93 billion made during the December 2021 cycle.