What Is At Stake After COP29

Climate change is expected to make every season more intense, and extreme weather often brings in its wake floods, storms, cyclones, heatwaves, landslides and more. These extreme weather events don’t just lead to immediate devastation but also have far reaching consequences on health, agriculture, air quality, food security, livelihoods.

India needs trillions of dollars to adapt to the effects of climate change, which is probably why its representatives were so disappointed with the way a new global finance goal was adopted at last month’s annual climate change conference in Azerbaijan. The Indian delegation had called the newly adopted sum to be disbursed to developing countries to cope with climate change as ‘paltry’.

Many developing countries (which have historically contributed the least to climate change) have expressed their disappointment at the outcome, and questions are being raised on whether the world is still on track to control global warming and whether the spirit of multilateralism exists anymore.

Despite a tripling of the climate finance to be given to developing countries from $100 billion to $300 billion, why have these questions come to the fore? An IndiaSpend explainer, as 2024 comes to a close.

Not all hot air

The year just ending is set to be the warmest year on record as per early predictions. This was already reflected in individual instances in India. For example, October 2024 was recorded as the hottest October in the last 124 years; Mumbai recently recorded its hottest December day in 16 years, and Delhi recorded its highest rainfall in 88 years in the month of June.

While India may have recorded an overall ‘normal’ monsoon this year with 8% more than usual rainfall, it was marked by large monthly and regional variations. For example, June saw deficit rainfall but the other monsoon months saw surplus. There was also wide variation in the rainfall received in the different parts of the country.

Further, some of this rainfall at individual stations was received in intense spells and over short durations. This led to one of the biggest disasters of 2024--the landslide in Kerala’s Wayanad in July, which killed at least 200 and buried entire villages.

A cruel summer led to over 40,000 heatstroke cases and over 100 deaths owing to heatwaves. Cyclone Fengal in late November led to devastation in Tamil Nadu, Kerala and Sri Lanka as well.

As for the world, it experienced an average of 41 extra days of dangerous heat in 2024 due to human-caused warming, a new report by World Weather Attribution and Climate Central found. Climate change intensified 26 of the 29 weather events (studied here) that killed at least 3700 people and displaced millions. The report warns that every country needs to prepare for rising climate risks to minimise deaths and damages in 2025 and beyond.

If extreme weather can affect a large country like India to this extent, its impact on small island nations is catastrophic, threatening their very survival. That is why the annual climate conference, a Conference of Parties (COP) to the Kyoto Protocol and Paris Agreement, is significant.

The Paris Agreement is a legally binding international treaty on climate change that was adopted by 196 countries at COP21 in 2015. In the COPs, unlike in other UN bodies, every nation has equal heft, which means that big and small countries, developed and developing countries, have the same rights.

This conference has brought about landmark moments such as at COP28, where the world agreed that fossil fuels were indeed causing climate change and vowed to transition away from them. Also, a historic fund was created at COP27 to help countries coping with climate change-induced losses.

What happened at COP29

The headline is that the developed countries agreed to triple climate finance to be distributed to developing countries by 2035.

Developing countries were to receive $100 billion every year by 2025. This finance goal however was met only once, in 2022, leading to distrust and concerns on part of the developing nations.

As per the Paris Agreement, countries were supposed to agree on the next finance goal that will come into effect from 2025 onwards, taking the $100 billion as the floor and raising it suitably as per the needs of developing countries. This new corpus is called the New Collective Quantified Goal on Finance or NCQG. India was one of the few countries in the world to put a number to this goal, demanding that the developing world be given around $1 trillion per year, beginning 2025.

Developing countries require about $5.8-5.9 trillion up until 2030 in order to meet their climate goals and comply with what they had promised as per the Paris Agreement, according to the United Nations’ Framework Convention on Climate Change’s (UNFCCC) own estimate.

However, developed nations kept them guessing right until the end, and the final text carried the figure of $300 billion to be mobilised by developed countries (they will take the lead) annually by 2035. Countries also agreed to work on a ‘Baku to Belem roadmap’ wherein there is a commitment to channel $1.3 trillion of climate finance to the developing world each year.

While the final text was shared with member countries, host Azerbaijan did not give members a chance to formally record their objections, and the decision was adopted in the early hours of November 24.

India objected strongly. Chandni Raina, advisor in the Department of Economic Affairs, described the manner in which the deal was adopted as ‘unfair’ and ‘stage-managed’. Raina called the $300 billion sum ‘too little and too distant’. She labelled it ‘abysmally poor’, ‘paltry’ and an ‘optical illusion’--a far cry from the $1 trillion developing countries need every year to cope with the warming world.

The group of 45 Least Developed Countries called the NCQG outcome as ‘a betrayal of the world’s most vulnerable’.

“The LDC Group is outraged and deeply hurt by the outcome of COP29,” the group said in a statement. “Once again, the countries most responsible for the climate crisis have failed us. We leave Baku without an ambitious climate finance goal, without concrete plans to limit global temperature rise to 1.5°C, and without the comprehensive support desperately needed for adaptation and loss and damage. This is not just a failure; it is a betrayal.”

So what went wrong?

The devil lies in the fine print.

“As with the previous goal, developed countries will take the lead on mobilizing finance,” said World Resources Institute in its analysis of COP29 outcomes. “Unlike the previous goal, however, the new agreement recognizes ‘the voluntary intention’ of countries to count all climate finance flowing through multilateral development banks (MDBs) toward achievement of the goal. This is a notable shift.”

It pointed out that the agreement also slightly refines the Paris Agreement's language from encouraging developing countries to voluntarily "provide...support" to voluntarily "make contributions".

Shorn of verbiage, vulnerable countries might have to foot their own climate bill.

Also, adding credence to what the developing countries are saying, much of the $300 billion was going to be mobilised anyway under existing commitments without any extra effort, an analysis by the Centre for Global Development shows.

Besides, the new finance goal has not taken inflation into account. If we factor in inflation, the value of this amount in the next 10 years could be even less, at around $175 billion to $217 billion depending on the rate of inflation. Even the earlier $100 billion had not accounted for inflation, recorded Carbon Brief.

“One of the principles agreed upon in the Kyoto Protocol is that of Common But Differentiated Responsibility (CBDR),” said Runa Sarkar, professor of economics at the Indian Institute of Management, Calcutta. “This principle has been diluted over the years and by the time we got to COP29, it was completely taken away. The $300 billion is inclusive of flows from a China or an India, both considered developing countries, so that principle has been eroded.”

Sarkar believes there were glimpses of situations where the COP29 process did not seem entirely democratic--as for example the way the decision on Article 6 was adopted without any discussion.

“It was also about saving face, because Baku wanted to come back with something, but in the process of having some successes, what it did was not recognise the importance of the NCQG for arriving at the next climate goals. This is all contingent on what every country promises as their new goals next year,” said Sarkar.

By February 2025, all countries are supposed to submit their revised climate action plans. Countries like the UK, UAE, Brazil and most recently, the United States have announced their revised plans. While there is no word on India’s revised plans yet, a weak climate finance goal is likely to affect the next round of planning. In other words, when there is no money on the table, developing nations will find it hard to cut their emissions and transition to net zero.

Climate activist Harjeet Singh, who is also Global Engagement Director at the Fossil Fuel Non Proliferation Treaty Initiative, said in an X post on November 27, “Without sufficient finance, developing nations will have low mitigation ambition in their updated national climate action plans, in 2025. This trajectory puts us on course for over 3°C of warming, a level of devastation the world cannot afford.”

Singh has demanded that this deal be junked and a new finance deal should be pushed for at next year’s COP.

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