How to win at Cop29: A trillion-dollar war chest for the planet

Finance is the focus of the climate summit in Baku as nations consider how to pay for goals agreed in Dubai

According to the UN, countries made no progress over the last year in reducing global emissions from the burning of fossil fuels. Sean Gallup / Getty Images

How to win at Cop29: Making deals in the shadow of Trump

A successful UN climate change summit starting on Monday would hand the world a trillion-dollar green war chest on the scale of the Marshall Plan and put money aside to deal with catastrophes that can no longer be stopped, officials and campaigners say.

Negotiators at the finance-focused Cop29 summit in Azerbaijan face the task of putting wars, economic strains and the incoming Donald Trump presidency aside to agree a 197-country deal on funding the green agenda agreed in the UAE last year.

Under pressure to hand over the cash sought by developing countries, the rich world is eager for rising economies, banks and private lenders to pay their share of a climate bill covering everything from wind turbines and solar farms to flood defences and disaster clean-up.

But "if there's not a huge effort by developed countries to put something more substantial on the table, I don't see that these emerging economies are going to come through on a question of principle," said Matthew McKinnon, a former adviser to UN chief Kofi Annan and head of climate policy group Aroha.

By contrast, a big pledge would be "a signal that the international community is committed to move to another level of ambition," he said. "If we level up the ambition by an entire quantum, from $100 billion to $1 trillion or above, then that would set a very significant bar for the global economy to work behind".

How many zeroes?

The current $100 billion benchmark dates back to 2009, when a deal was struck to provide the 12-figure sum annually for poorer countries to go green. A 2020 deadline was missed, widening the funding gap and damaging trust in the UN process.

Cop29's key task is to agree a new target, known as the New Collective Quantified Goal. Ideas for picking a number include adding up the expected costs of eco-friendly policies, or putting aside a share of the rich world's GDP. Island nations are among those asking for a sum in the trillions.

With a five-yearly deadline looming in 2025 to submit new national green plans, there is "always quite a significant push" from countries reliant on international support to have assurances of funding, said Rob Moore, a former British negotiator on climate finance.

One estimate put on the table by UN development officials this week is that $890 billion will be needed next year, rising to $1.5 trillion a year by 2029. They said this would amount to a similar share of GDP as was spent by the United States to rebuild Europe from the ruins of 1945 via the Marshall Plan.

A suggestion by the Arab Group of countries is to fix the figure at $441 billion per year to be provided by rich countries, with the aim that private investors join in and bring the total to more than $1 trillion. Under this proposal, loans would not count unless a favourable interest rate is offered.

Cop28 President Dr Sultan Al Jaber, the UAE's Minister of Industry and Advanced Technology, has called for a finance deal that "meets the size of the challenge". He told delegates at pre-Cop talks in Baku that funding should "target the most vulnerable first" to help them prepare and recover from climate-related disasters.

Who pays?

The size of the cheque is not the only thing up for negotiation. Diplomats will also have to agree to a deadline, rules on where the money goes, such as possible sub-targets for funding emissions cuts and disaster preparation and recovery, and crucially who is expected to pay.

Under UN rules the world is split into lists of developed and developing countries drawn up in 1992, with advanced nations expected to pay the climate bill – but now arguing that others should chip in to reflect their wealth and carbon footprint in 2024.

The UAE pledged $100 million to a disaster fund set up at Cop28, while South Korea has offered to contribute to the new goal. But rewriting the UN rule book would be a "big leap forward" from what countries have agreed in the past and perhaps "a bit premature for this Cop", Mr McKinnon said.

Cop29 will open at a time when "resources are being drawn away for the crisis in Ukraine, the crisis in the Middle East," he said. "This is not a moment when the world economy is sitting there with a huge amount of money just wondering what to spend it on."

Mr Moore said moving towards a deal could mean traditional donors boosting funding in exchange for an "acknowledgement that the global economy has changed". "There needs to be an earnest offer on the table that is a significant improvement on what exists at the moment," he said.

With some "creative thinking", Azerbaijan's Cop29 team could find ways for willing countries to contribute without reopening the Paris Agreement, he said. Proposals include setting criteria for who should pay, or asking for contributions from countries "in a position to do so".

Loss and damage

A further dispute is whether the new goal should include the costs of recovery when a climate disaster strikes, known as loss and damage in UN jargon. Some negotiators say the fund is for preventing such disasters and that their costs cannot be anticipated in advance.

The issue is likely to be "subject to very heated debate", but whether loss and damage is included in the main finance deal or not, Cop29 as a whole "needs to ensure that it is providing adequate assurance on the response to loss and damage in financing terms", said Mr Moore.

Arab Group negotiators say the new deal should cover emissions cut (mitigation), disaster preparation (adaptation) and loss and damage, as well as technology transfer, capacity building and transparency. Small islands want a percentage carved out for disaster recovery.

Lien Vandamme, a campaigner at the Centre for International Environmental Law, said it "makes a lot of sense" to have a sub-goal for disaster relief now that a specific fund exists for that purpose, making "clear that loss and damage finance is integral to climate finance".

"We see this underfunding of the fund, which needs to be addressed," she said. "The best resourcing strategy is making sure that loss and damage is addressed, together with mitigation and adaptation, under the climate goal that is to be decided at Cop29."