Will COP29 address historical debt or fuel more broken promises?

The pressure is on for COP29 to compel developed nations to finally fulfill their climate finance commitments, prioritising grants over loans and addressing loss and damage, to support vulnerable countries facing escalating climate impacts

The impacts of climate change are worsening year by year, with no part of the world immune from its devastating consequences. In September 2024, severe flooding in Nepal engulfed Kathmandu and adjacent districts, triggering landslides and washing away homes, leaving hundreds dead and thousands displaced. Earlier, between March and June, India and Pakistan experienced record-breaking temperatures and prolonged heatwaves, paralysing daily life and leading to widespread deaths and hospitalisations. Meanwhile, hurricanes have ravaged the Caribbean and the southern United States since mid-2024, and Canadian wildfires have scorched unprecedented areas of forest. These disasters illustrate an alarming trend: Climate change is no longer a distant threat, but an immediate crisis, disproportionately impacting the most vulnerable regions and populations.

As COP29 approaches, the question remains: Will developed nations finally deliver on their climate finance commitments, or will the world witness yet another failure at the cost of millions of lives?

Failure to Deliver Climate Finance Despite Warnings

In October 2024, the UNEP released its latest Emissions Gap Report, confirming that even if countries fully meet their current climate pledges to cut emissions by 2030, global temperatures are still projected to rise by 2.6°C by the end of the century. This trajectory will push the planet past several dangerous tipping points, threatening food security, public health, and biodiversity. The gap between current global emissions and the reductions needed to limit the temperature rise to 1.5°C is widening. This failure is largely due to inadequate financial support from developed countries. Without enhanced financial resources for developing nations, the world’s most vulnerable communities will be left defenseless against worsening climate impacts.

The Nationally Determined Contributions (NDC) Synthesis Report synthesising contributions from 195 parties, released shortly after the UNEP report, reiterates that many developing nations’ climate commitments remain contingent upon undelivered climate finance. It stresses that without significant increases in mitigation ambition and funding, the world is on a trajectory for even higher emissions, estimating that total global greenhouse gas (GHG) emissions in 2030 will only be about 2.6% lower than in 2019—far from the reductions required to stay on track for the 1.5°C target. Developing nations, which have contributed significantly fewer emissions historically, are being hit hardest by climate change, yet they are receiving little support to implement the necessary mitigation and adaptation measures.Developed countries often highlight their $100 billion annual climate finance target, first set in 2009, but delivered two years later than the original 2020 deadline, as evidence of their commitment to global climate action. However, an OECD report admitted that, in 2022, as in previous years, a majority of public climate finance — 69%, or $63.6 billion — was provided through loans. A portion of this lending was on market terms rather than concessional. In contrast, grants represented just 28% of the total, amounting to $25.6 billion, while equity investments were significantly lower at $2.4 billion. These loans contribute to the mounting financial crises in these nations, turning what should be reparations into another tool of exploitation.

Developing countries have long called for a redefinition of climate finance that prioritises grants over loans and eliminates the harmful debt cycle. Grants from multilateral climate funds, like the Green Climate Fund (GCF), the Adaptation Fund and the new Fund for responding to Loss and Damage (FRLD), are essential for ensuring that climate action does not push vulnerable countries further into financial distress.

New Climate Finance Goal: Who Pays, Who Receives, and How Much?

The New Collective Quantified Goal (NCQG) —the new financial target set to replace the outdated $100 billion goal in 2025 — is to be finalised at the COP29 climate conference in Baku this month. 

Developing nations—such as those in Africa, the Arab Group, and India—are calling for at least $1 trillion annually in public finance to help reduce greenhouse gas emissions and manage the impacts of climate impacts. As the article highlights, while developed countries agree that public finance should form a key part of the NCQG, they remain vague on the size of this commitment. Their position, strongly advocated by the United States, is that achieving the necessary scale of climate finance requires structuring the NCQG as a multi-layered global investment goal. This approach would encompass not only private sector investments in clean energy and resilience measures—most of which still heavily favor wealthy nations and a few emerging market economies—but also include domestic efforts already underway in developing countries, despite inadequate support from rich nations for adaptation and addressing loss and damage.

Whereas, the research by the advocacy group Oil Change International, published in The Guardian, shows that wealthy countries could generate $5 trillion annually through a combination of wealth and corporate taxes, as well as a crackdown on fossil fuels. The report estimates that a wealth tax on billionaires could raise $483 billion globally, while a financial transaction tax could generate $327 billion. Additionally, taxes on sales in sectors like big technology, arms, and luxury fashion could bring in $112 billion, and reallocating 20% of global public military spending would be worth $454 billion. Ending fossil fuel subsidies could free up $270 billion in public funds in wealthy nations and about $846 billion globally, while taxes on fossil fuel extraction could generate $160 billion in rich countries and $618 billion worldwide.

Another major point of contention in the NCQG negotiations is the question of who should contribute and who should receive. Developed nations have been pushing to broaden the base of contributors to include wealthier developing countries, like China, the Gulf States and other emerging economies like India. This approach undermines the principle of common but differentiated responsibilities and respective capabilities (CBDR-RC), which is central to the UNFCCC framework. Developing countries and civil society stress that industrialized nations, as historical polluters, should bear the primary responsibility for climate finance. Meanwhile, China and other emerging economies reject mandatory contributions, emphasizing that developed nations must meet their obligations before placing demands on others.

As the author mentioned to The Hindustan Times, “wealthy nations, whose prosperity was built on over 150 years of fossil-fuelled industrialization, cannot simply start counting the emissions from the 1990s. They bear a historical responsibility for driving climate change, and it’s time they acknowledge that debt. Climate finance for developing nations is not charity or business investments—it’s a matter of reparations. The burden of this crisis should not be shifted onto those barely responsible for causing it.”

While developed countries contend that emerging economies should contribute due to their growing wealth and emissions, they cannot ignore their historical responsibility for climate change—a core tenet of climate justice that makes them primarily accountable for financing climate action. Despite this, developed nations continue to expand fossil fuel use while pushing for broader contributions from the Global South, placing the bulk of the responsibility on others. 

On the other hand, China, for example, has made significant voluntary contributions, including $45 billion for climate action between 2013 and 2022. Similarly, the United Arab Emirates (UAE) and South Korea have contributed to the Fund for Responding to Loss and Damage (FRLD) and the GCF, respectively. 

Complicating negotiations further, developed countries are attempting to limit public finance to the nations they deem most vulnerable—those categorised as least developed countries (LDCs), small island developing states (SIDS), and fragile states. While framed as a way to improve the focus and effectiveness of climate finance, many developing nations view this as a divisive strategy aimed at excluding larger developing economies from receiving necessary support. This tactic threatens to weaken unity among developing countries, just as it did during the final phases of the NCQG negotiations and the creation of the loss and damage fund at COP28.

There is also growing disagreement over whether the NCQG should include funding for loss and damage. Developing countries, supported by civil society, argue that loss and damage must be treated as a third pillar of climate finance alongside mitigation and adaptation. Their advocacy led to the establishment of the Fund for Responding to Loss and Damage (FRLD) at COP27, which is now a part of the UNFCCC’s financial mechanism. However, wealthy nations continue to resist the inclusion of loss and damage in the NCQG, citing the Paris Agreement’s exclusion of such support. Given the escalating climate-related disasters, this stance is increasingly untenable.

Will COP29 Restore Trust?

Climate finance is not just about future projects; it is a matter of reparations for decades of environmental damage caused by the Global North. A 2023 study published in Nature Sustainability highlights the vast carbon inequalities between the global North and South. According to the study, the United States, Europe, Canada, Israel, and other wealthy nations have overshot their fair share of the remaining carbon budget, with the global North set to overshoot by a factor of three by 2050. This atmospheric appropriation comes at a steep cost: these nations owe approximately $192 trillion to undershooting countries by mid-century, equating to $940 per capita annually. The calls for reparations and compensation for causing the climate crisis are growing louder, but the question remains whether COP29 will finally begin to address this glaring injustice.

The credibility of developed countries hangs by a thread. The promises of climate finance made at previous climate conferences have repeatedly fallen short, treating climate action as an investment rather than a matter of justice. Developing nations have waited too long for the reparations they are owed. If the rich world continues to fail in delivering adequate, accessible, and transparent climate finance, COP29 risks becoming yet another chapter in the long history of broken promises. The future of global climate justice hinges on whether developed nations can live up to their responsibilities or whether their inaction will plunge the world deeper into the climate crisis.

Harjeet Singh is a climate activist and the Global Engagement Director at the Fossil Fuel Treaty initiative. He co-founded a social impact organisation, Satat Sampada. He tweets at @harjeet11. Views expressed are personal.

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Harjeet Singh

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