Against the highly charged geopolitical backdrop of today’s world, the best possible outcome of an international conference might be “better than expected but less than hoped for.”

This certainly applies to the UN COP29 Climate Conference that has recently concluded in the Azerbaijani capital Baku. The COP29 Conference opened with high hopes for a new international commitment to finance climate action in the developing countries and concluded with an agreement on $300 billion in annual pledges until 2035.

UN Secretary General António Guterres described the agreement as “a base to build upon” and stressed the need for the commitments made at the COP29 “to be honoured in full and on time” and “quickly” and “in cash.”

Raw figures for international climate action financing should not lead us to jump to conclusions, even if they add up to an overall increase. A sum of money only acquires significance when compared to previous sums for the same purpose and, more importantly, the current and future needs for climate action.

The New Collective Quantified Goal, or NCQG, of $300 billion will replace the $100 billion per year bequeathed from the Copenhagen Climate Summit in 2009. This commitment was reaffirmed at the Paris Summit in 2015. That same summit imposed a stricter and more binding commitment from the developed countries to meet their pledges without shortfalls or delay from 2020 to 2025. However, the targeted funding arrived two years late, according to a report released last May by the Organisation for Economic Cooperation and Development (OECD).

Independent organisations such as Oxfam have challenged the commonly used methodology for calculating financial flows, citing such problems as double counting and the blurring of lines between climate action and other sectors. Moreover, the original financing target has been mired in ambiguity since the outset. Many developing countries were at first under the impression that it would consist of grants and long-term concessional financing. It turned out to be a mixture of various kinds of financing, predominantly loans.

When it was first introduced, the $100 billion figure seemed substantial. The international community was not yet aware of the significant financing gaps that would need to be bridged to reduce greenhouse-gas emissions and implement measures to mitigate their devastating effects on lives and livelihoods.

Having recently contributed to several reports on climate financing, I can only describe it as insufficient, inefficient, and unfair.

Its insufficiency has been underscored by successive reports from the Independent High-Level Expert Group on Climate Finance. The group’s Co-chairs Amar Bhattacharya, Vera Songwe, and Nicholas Stern, issued a statement advocating a financing target set at $1.3 trillion annually until 2035 directed towards the developing countries apart from China.

The NCQG agreed on in Baku falls far short of this and even below the minimum need for concessional public financing, which the group estimated at $390 billion annually. This shortfall will necessitate the larger and faster mobilisation of funds, with easier access, improved quality, and reduced costs.

The foregoing observations reaffirm that the financing problem is not just about insufficiency but also about the inefficiency mentioned above. Efficiency refers to how easily and quickly the developing countries can access financing. This process, in reality, has often taken months if not years.

The third problem, unfairness, is manifested in several ways. Climate financing is concentrated in certain countries while others are neglected. It is biased towards fields related to mitigation, such as new and renewable energy projects, and less attentive to adaptation needs, such as coastal protection, combating desertification and deforestation, and adapting water and agricultural systems to climate impacts. One of the most glaring violations of the principle of fairness is the burden placed on the developing countries, which are forced to incur high-cost debts to address crises they did not cause.

So, what can the developing countries do?

They can stop relying on benefactors that do not rain down gold and silver or generous concessional financing, and instead they can strengthen mechanisms for accountability, transparency, and follow-through.

They can avoid putting excessive faith in assumptions that private investments will flow to all aspects of climate action. In fact, they will continue to target the sectors that offer the highest returns at the lowest risk, such as renewable energy. Adaptation-related sectors currently receive less than three per cent of private climate funding.

They can revise their strategies for mobilising public financing for climate action. According to the UK newspaper the Financial Times, private climate financing increased from $14 billion in 2021 to only $22 billion in 2022.

They can accelerate efforts to develop carbon markets, especially given the amendments the COP29 introduced to Article 6 of the 2015 Paris Agreement on Climate Change, which should facilitate the process. The carbon credit market is expected to grow to $250 billion by 2030.

They can start preparing now for the COP30 Conference in Brazil by implementing action programmes to revise and update the NDCs (Nationally Determined Contributions) because the current models are outdated and unsuitable for attracting the necessary investment.

Finally, they can strengthen their capacities to operate in an increasingly fragmented world in which national negotiating teams are often cut off from one another.

Two important upcoming conferences will offer opportunities to test their abilities to harmonise on points on the international agenda.

The first is the 16th Conference of the UN Convention to Combat Desertification that will take place in Riyadh next month. The second, scheduled to take place in Spain in June, is the 4th International Conference on Financing for Development, an event that only takes place every ten years.

This article also appears in Arabic in Wednesday’s edition of Asharq Al-Awsat.

* A version of this article appears in print in the 28 November, 2024 edition of Al-Ahram Weekly