X marks the spot: How power and compromise led to COP29’s $300 bn climate finance outcome

The COP29’s climate finance deal reveals power struggles and lingering inequities

Developed nations arrived at COP29 in Baku, Azerbaijan, with the same inscrutable expression they wear at every climate negotiation—a poker face that betrays nothing until the final moments. For developing countries, this familiar stance often signals trouble: a prelude to backroom deals that secure incremental wins for rich nations while sidelining the urgent and existential needs of vulnerable communities.

This year, the long-promised $100 billion climate finance goal was tripled to $300 billion—a headline-grabbing figure that, on closer examination, came laden with caveats. The package blended public and private finance. A far cry from the $1.3 trillion in public finance that the G77+ China group had previously demanded. Compounding the frustration was the inclusion of a voluntary call for developing countries to contribute.

“After so much of the world going in for elections in 2024 and flailing national budgets since after COVID, 2025 was always going to be a year of austerity. In light of that, the paltry pledge of $300 billion a year by 2035 is not surprising,” said Professor Runa Sarkar, IIM Kolkata.

As the conference drew to a close, the question loomed larger than ever: Was COP29 a victory or another missed opportunity? The answer, as always, lies in a tangled mix of perspectives and the unresolved reality of climate injustice.

A slow start

“They [developed countries] are not putting their cards on the table.” This is what delegations and experts from developing nations kept repeating throughout the two wells of COP29. This was to be the “Finance COP”. And yet, even before the summit began on November 11, all indications were that it would be anything but, largely because of the disinterest shown by the big hitters in participating with the same robust energy they had in COPs past. This COP had no big leaders, and hence no big voices — which has helped move negotiation logjams in the past. To add to the uncertainty, Argentina walked out in the first week. This lack of political will quickly turned into the most concerning issue for civil society groups.

That, and of course, the lack of a New Collective Quantified Goal (NCQG) number in COP29’s climate finance text — which was what everyone was most keen to see. The NCQG replaces the $100 billion climate finance goal that had been set for developed nations to pay to the developing world.

But iteration after iteration, there was an X in place of where the number should have been. It also wasn’t clear how this money was to be paid. Through public finance, which would include grants? Or through private finance? Would there be a multilayered-approach to the finance? When does the money actually start flowing and from where? The answers to these questions were whispered and speculated in the long corridors of Baku Olympic Stadium, but never stated as fact until the last couple of days of the summit. More on that later. The first mystery that needed to be solved was why there was no NCQG number at the Finance COP. Countries had a whole year to calculate a number. So who had not done their homework?

We found out in the first week itself that G77 + China had indeed proposed an NCQG number of $1.3 trillion per year in public finance. The climate finance need of trillions from the billions being discussed earlier was first announced in the New Delhi Declaration of Leaders under India’s G20 presidency. India had also submitted a proposal of $1 trillion in climate finance to the UN in March this year. This was ambitious, especially considering the developed countries had struggled to pay the previous $100 billion goal only in 2022, even though it had been set in 2009 in Copenhagen. But it is important to note here that this was not a random number, unlike the $100 billion, which had been sprung up as a surprise on developing nations, all those years ago.

The $1.3 trillion was a number based on analysis and after a thorough calculation of the needs of the developing world. So there was a number to start the negotiations with. Despite this, the X remained in subsequent iterations of the climate finance text. This was being interpreted in two ways — either the developed countries had come to the finance COP without a number in mind, or this was a well-thought out strategy to tire the other side out until their (lowball) number was finally accepted out of sheer exhaustion and the lack of time. And this is exactly what happened.

Former United States special presidential envoy for climate, John Kerry had declared at COP28 that the US had no money for climate finance. The US also pledged a paltry $17 billion to the Loss and Damage Fund last year despite being the richest country globally. Kerry, instead, said climate finance can be found from groups such as Glasgow Financial Alliance for Net Zero (GFANZ), a coalition of financial institutions. Developed countries also pushed to include carbon markets as a part of climate finance, which saw major pushback from developing countries at COP29. Mohamed Adow, founder and director, Power Shift Africa, called carbon markets a “dangerous distraction and a wolf in sheep’s clothing”.

However, a deal on government-to-government carbon markets was agreed on at COP29. Experts remain wary of the agreement, with Isa Mulder, policy expert, Carbon Market Watch, calling it ‘dangerously loose and opaque, tailor-made for those pushing to turn it into a free-for-all’. Meanwhile, the adoption of Article 6.4 rules on removals risk repeating the inadequate measures of the voluntary carbon market that guarantee permanence. But the narrative of “private finance should be climate finance” had already been set by Kerry, and so the mystery of $X trillion in the draft texts was an easy one to solve.

The iteration journey

In two weeks, the climate finance text was whittled down from 34 pages to 22 pages to 10 pages and finally 6. The first and longest iteration was filled with options from different countries, which meant that not a lot of work had been done on cutting down the text since it was last looked at in Bonn, Germany in July 2024. The $1.3 trillion figure was in several of the options, with the words ‘at least’ added before it. The length of the text aside, this seemed to be a good start for developing countries.

There was also mention of grant-based concessional finance mentioned in the options, which was another positive for poorer nations. The NCQG options also included $1 trillion (put forth by India), and $2 trillion. But while successive iterations showed movement on the language around $1.3 trillion, the sentences mentioning the latter two figures remained as is. This could be interpreted as negotiations going back and forth on $1.3 trillion, while the other numbers would probably be deleted in later iterations. The X for the main NCQG text, however, remained, with no mention on the type of finance this would be.

If COP28 was chaos, filled with cancellations of press conferences that were also scheduled at the last minute, COP29 was eerily quiet. Apart from the expected flurry of activity whenever iterations of the draft text were released, there wasn’t much to do except wait and watch. By the end of the first week, restless media tried to understand why things were moving so slowly. The issues were known—developed countries wanted to expand the list of climate finance donor countries to include China; there was pushback from the developing world on strong references to mitigation being linked to the NCQG; linking carbon markets to the NCQG was also unacceptable to the G77 + China and LMDC. But everyone wanted to understand what would end the logjam.

“We have been seeing for years and years at COP that when there is big contestation around an issue—this year it is finance—then that issue tends to hold up other issues. It is like a hostage taking of other issues. So if we don’t move forward on finance, we will potentially see its impact felt in the other negotiation areas,” said Tasneem Essop, executive director, Climate Action Network (CAN). The other texts under negotiation at COP29 were the Mitigation Work Programme (MWP) and the Just Transition Work Programme (JTWP).

But soon after, some details emerged that indicated movement on one of the issues — that of expanding the climate finance donor base— which is a list of developed countries primarily responsible for giving climate finance under the Paris Agreement.

Avantika Goswami, Programme Manager for Climate Change, Center for Science and Environment, India, said, “On the contributor base question, we have heard that developed countries are starting to back down somewhat and have softened their earlier very hardline position that the base must be expanded. China may have shown some willingness to report its existing voluntary climate finance provisions from developing countries under Article 9.2 . And that may have to some extent helped pacify some of the developed countries. We’ve also heard that developed countries have realised that pushing hard on the contributor base expansion is a very bad look for them and it’s hurting them in their relationships so they may have taken a step back. Again this is conjecture and it might change through the course of this week, we have a wait and watch situation.”

Negotiations are also dependent on optics. No one wants to be portrayed as the bad guy. But the war of optics had already made the US the villain of the developed world seeing how it is currently in a state of limbo with no indication of its future in climate action. The villain of the developing world was not China, but Saudi Arabia, which was accused by the western media of blocking negotiations. China was sitting in between, with everyone from the UN to Germany asking it to step up on its climate leadership. China is already a climate leader.

On November 12, Chinese Vice Premier Ding Xuexiang said China has provided more than Yuan 177 billion ($24.50 billion) of climate finance since 2016, supporting developing countries’ efforts to cope with climate change. China stepping in and ending the finance logjam would undoubtedly earn the country goodwill from both the developed and the developing world.

The final countdown

After three iterations in the first week, the second week had a slow start. COP attendees didn’t see a new version of the text until Thursday. Members of the Indian delegation whom CarbonCopy spoke to were cautiously optimistic, but the uncertainty of what the developed countries’ NCQG number would be was a problem. They [developed nations] are trying to come up with creative ways to dodge paying the climate finance bill, sources alleged. This was evident in the iteration released on Thursday where the phrase “absorptive capacity”, which asked developing countries to bring in policies incentivising private finance and creating a fertile ground for investment—yet another attempt to make way for more private finance. But the X remained.

Some experts were pragmatic about the final NCQG number. “How to expect $1 trillion to come as low-cost, interest-free grants. For negotiations it is okay, but practically we don’t expect that to happen,” said Vaibhav Chaturvedi, Senior Fellow at Delhi-based Council On Energy, Environment and Water (CEEW).

“What could end up happening is the EU [on behalf of the developed nations] saying $300 billion dollars. The developing world is clearly saying $1 trillion. Somewhere in the between you say $500-600 million dollars. It is always the incentive of the [COP] presidency and everyone else to show success. So they may say ‘$500 billion, which is 5 times compared to the earlier floor of $100 billion. This is not as good as what the developing world is asking but it is still a success’,” Chaturvedi added.

The G77 + China along with LMDCs and the ADG saw what was to come and quickly changed strategy. They would accept a $600 billion public finance figure and would work towards a larger quantum subsequently, they all said.

Then came Freaky Friday. A draft text was released early evening and it sent shockwaves across the venue. The X was finally replaced with the number. It was $1.3 trillion per year, but the catch was that this was the number that climate finance had to scale up to by 2035. Even worse was that the $100 billion goal was replaced with a $250 billion goal, which was not just public finance, but also private, bilateral and multilateral, including alternative sources. Even more troubling was the line “Invites developing country Parties to make additional contributions, including through South–South cooperation, to or supplementing, the goal set forth in paragraph 8 above.” For the developing world, the worst case scenario was now in play.

This became known as “a bad deal” by the civil society.

A late night press conference by Brazil on Friday night gave attendees an idea of what is to come in the final text. Brazil’s minister of the environment and climate change, Marina Silva, invoked the numbers of an Independent High Level Expert Group (IHLEG) report that had been released at COP29 a few days earlier. “The IHLEG report states we need $300 billion per year by 2030 and $390 billion by 2035. This is a reality that has to be understood. It is a form of kick-starting the process of achieving $1.3 trillion per year by 2030. Developing country resources will be working in a catalytic manner only, but not to replace the commitment by developed countries as written in the Paris Agreement,” she said.

This is 300

Friday night ended with news that a closing plenary would be held on Saturday at 10am—a day after COP29 was to officially end. That time came and went but the uncertainty of what is to happen with the text remained. Will developing countries reject the $250 billion? Would they ask for more or would they walk out? “No deal is better than a bad deal” was the chant heard throughout the venue. Whispers of developing country negotiators pushing for $300 billion and trying to keep a mention of Article 9.1 of the Paris Agreement — which places the obligation to provide financial resources on developed countries — began doing the rounds.

It was down to the wire. Text had to be gavelled, flights had to be taken. It was only just before midnight that the final text arrived. Developing nations were to get $300 billion but as mobilised finance — through public, private and other sources.

“What is disappointing is that, first, this is the sum total of all financial flows. Had this been the total (concessional) public finance flows, it would have sent the developing world a signal that there was scope for crowding in more finance leveraging these flows and using them as risk mitigators. Second, there is no discussion around debt forgiveness although it was an important issue on the table. Third, there is no earmarking of what these flows will be for, no focus on additionality and my concern is that most of these will go the mitigation way, leaving the voiceless to bear adaptation costs. Fourth, the reassurance of flows of funds over a decade later does not inspire any confidence. Finally, deliberations for the way forward lack specificity on how to get to the goal of USD1.3 trillion, while talking of imposition of taxes, which is a step in the wrong direction. Thus, the lack of focus on the details leads to a sense of distrust among the parties and does not bode well for future COPs,” explained Sarkar.

The controversial sentence inviting developing countries to contribute to climate finance now ended with the word “voluntary”, to appease angry and tired delegates from developing nations. The text also launched the “Baku to Belém Roadmap to 1.3T” — aimed at scaling up climate finance to developing countries through “grants, concessional and nondebt-creating instruments, and measures to create fiscal space, taking into account relevant multilateral initiatives as appropriate.” But the rest more or less remained the same.

Lost chance

Despite criticism, the outcome brought mixed reactions. The good news? An agreement was reached. Multilateralism may have still survived. The bad news? With insufficient funds allocated to support transitions in developing countries, expectations for ambitious Nationally Determined Contributions (NDCs) remain low. The reluctance of developed countries to step up where it matters, remains.

Sehr Raheja, program officer, climate change, Centre for Science and Environment (CSE), said, “The call by developed countries for ambitious NDCs was heard frequently at this COP, but the means of implementation to enable high ambition in NDCs does not really seem to have matched the needs. Apart from the quantum of finance, the lack of sub-goals for mitigation, adaptation,loss and damage; the too long timeline of 10 years (“by 2035”) and reduced emphasis on grants and grant equivalent finance have made this outcome a rather weak one. It feels like a totally missed opportunity — NCQG was a chance to course-correct and provide finance to enable necessary climate action in this critical decade. That chance has been lost.”

Compounding the challenges, COP29 failed to provide clarity or consensus on pivotal issues, including the Global Stocktake (GST) and the UAE Dialogue along with the Just Transition Work Programme and the Mitigation Work Programme. These unresolved questions now hang over the climate agenda, leaving much work to be addressed at the Bonn Climate Conference in a few months.

Optical illusion

From rushing the discussions on Article 6 to claiming an early win at the start of the two-week long summit to observers calling the process in the second-week opaque, the Presidency was accused of not following transparent processes.

At the closing plenary of COP29, India voiced its strong dissatisfaction with how the final text was negotiated and adopted, delivering a fiery intervention just before the document’s approval. India’s negotiator Chandni Raina accused the Presidency of having “stage-managed” the procedure. She also said that the host has not followed inclusivity on various incidents, along with not letting India share its statement—as requested by the country—prior to any decision on the text adoption.

“India does not accept the goal proposal in its present form. The amount that is proposed to be mobilised is abysmally poor. It is a paltry sum. It is not something that will enable conducive climate action that is necessary for the survival of our country. This document is nothing more than an optical illusion. We oppose the adoption of this document,” said Chandni Raina, while making her intervention at the final plenary.

COP29 chief negotiator Yalchin Rafiyev refused to answer questions about climate activists being jailed, saying he was focused purely on efforts, “to agree and adopt important decisions on climate action”.

A local told CarbonCopy that the day COP29 ended, everyone in Baku celebrated because they could now go back to their lives as schools, universities and offices were ordered to operate remotely to avoid congestion on the road and metro.

Looking ahead, COP30 in Brazil is already being referred to as the “NDC COP,” where the second round of the GST will also commence. Yet, without robust financial commitments to back new pledges, COP30 will face an uphill battle to restore faith in the process and deliver meaningful progress.