After a 12-day negotiation marathon at the 29th United Nations Climate Change Conference ( COP29 ) in Baku, Azerbaijan, the attending parties finally reached a deal concerning climate finance for the coming decade, with the developed countries promising to raised US$300 billion a year by 2035 to help developing countries fight climate change. This amount, however, falls short of the original target of at least US$1.3 trillion a year during the same period that all the parties were hoping to raise.

Closing the deal was not easy. Target amounts were undecided even on the final day of the conference, last Friday, at which time the summit’s draft text resolution document had placeholding ‘X’s in the spots where dollar amounts were to be and tensions, and frustration were high as people involved in the negotiations lamented the lack of progress and feared a permanent stalemate. However, a deal was reached early Sunday morning after frantic negotiations.

Given the large financial resources needed to limit the global temperature rise to under 1.5 degrees Celsius above the pre-industrial level in accordance with the Paris agreement and the persisting funding gap, mobilizing more climate finance from both public and private sectors has always been a focal point for every year’s COP.

This year is no exception. Expected by the public to be “the finance COP”, one of the key agendas for COP29’s attending parties was to come up with an updated international climate finance goal based on the current “US$100 billion per annum to developing countries” goal, which was made in 2015 and achieved in 2022. 

A new commitment of climate finance is crucial at COP29 not only because a credible target and plan will help to cement the trust between developed and developing countries to go together along the low-carbon emission pathway, but also because the COP this year marks what is considered a key middle point – 2024 is the end of the first decade since the Paris agreement was signed, and next year will be the starting point of a new decade-long race for climate action into 2035.

This key document laying out climate financing ambition is officially known as the CMA 6 agenda item 11( a ): New Collective Quantified Goal on Climate Finance, or NCQG for short. It supposed to state the amount that developed nations need to provide to developing nations for climate mitigation and adaptation purposes annually from 2025 to 2035.

The NCQG estimates that the climate finance needed to fulfil developing countries’ nationally determined contributions – national-level commitments to reduce their greenhouse gas emissions as part of climate change mitigation – to be at US$455 billion to US$584 billion per year, and adaptation finance needs are estimated to be between US$215 billion and US$387 billion annually, up until 2030.  

Given this estimate of funding gap, even the NCQG’s dollar number for developing nations has been upscaled from US$100 billion to US$300 billion, many representatives think it is not a sincere resolution to the climate crisis. Chandni Raina, a negotiator for India expressed her disappointment at the final amount agreed upon, saying: “This, in our opinion, will not address the enormity of the challenge we all face.”

While this long-waited financial commitment may not be up to the standard of some people’s expectations, COP29 has made some encouraging progress. For example, leading multilateral development banks have pledged up to US$170 billion of climate finance by 2030, including US$120 billion towards low- and middle-income countries, and US$50 billion for high-income countries. In addition, the legacy of a governing architect for a global carbon crediting mechanism from 2015 is also set to be operationalizable.

Next year’s COP30 will be held in Belém, Brazil, with the “Baku to Belém Roadmap to 1.3T” initiative launched by the presidencies to further scale up climate finance to developing countries.