Rich countries agree to raise climate finance offer to $300bn a year – sources
Negotiators have told our reporters on-the-ground that rich countries have agreed to up their offer on the crucial issue of climate finance. Read the full story from Adam Morton, Fiona Harvey and the rest of the team here.
Major rich countries at UN climate talks in Azerbaijan have agreed to lift a global financial offer to help developing nations tackle the climate crisis to $300bn a year, as ministers met through the night in a bid to salvage a deal.
The Guardian understands the Azeri hosts brokered a lengthy closed-door meeting with a small group of ministers and delegation heads, including China, the EU, Saudi Arabia, Brazil, the UK, US and Australia, on key areas of dispute on climate finance and the transition away from fossil fuels.
It came as the Cop29 summit in Baku, which had been due to finish at 6pm Friday, dragged into Saturday morning. A plenary session had been planned for 10am but did not eventuate.
The developing world reacted with anger to a draft $250bn climate finance target on Friday, dismissing it as a “joke” and far below the amount that is needed to help the poor shift to a low-carbon economy and adapt to the impacts of extreme weather. It prompted a diplomatic effort behind the scenes to increase the offer from developed nations.
Multiple sources said the EU and several members of the umbrella group of countries including the UK, US and Australia had indicated they could go to $300bn in exchange for other changes to a draft text released on Friday.
The Guardian understands that the UN secretary general, António Guterres, was ringing round capitals to push for a higher figure. Japan, Switzerland and New Zealand were understood to be among the countries resistant to the $300bn figure late on Friday.
A $300bn offer would still fall well short of what developing countries say is necessary, and would likely still draw sharp criticism if included in an updated text expected later on Saturday. But with some ministers booked to leave Baku in the hours ahead, countries face a decision on what they are prepared to accept.
Several ministers from rich nations have argued that a deal may be easier now than next year, when Donald Trump will be US president and right-wing governments could be returned at elections in several countries, including Germany and Canada, and they do not want to make a commitment they cannot meet.
Claudio Angelo, from Observatório do Clima in Brazil, said rich countries had “clearly arrived to ditch their obligations”. “After three years of negotiations the first time we ever saw quantum in the text was yesterday,” he said.
He said $300bn in grant funding was “way, way below” what developing countries needed. “Remember, many of them are already in deep debt,” he said. “To have climate finance as the current text proposes will only entrap those countries more.”
According to the draft text of a deal circulated on Friday, developing countries would receive at least $1.3tn a year in climate finance by 2035, which is in line with the demands most submitted in advance of this two-week conference.
But poor nations wanted much more of that headline finance to come directly from rich countries, preferably in the form of grants rather than loans. They said the offer of $250bn coming from rich countries, with few safeguards over how much would come without strings attached, was much too little.
Key events
Dharna Noor
Meanwhile dozens of activists gathered in the Cop29 halls on Saturday afternoon, holding signs that said “pay up or shut up and “trillions not billions.”
The protestors called on developing countries to “hold the line” if they do not win a deal that represents their interests.
“No deal is better than a bad deal,” they chanted.
At a media huddle after the protest, climate activist Brandon Wu from the NGO ActionAid said: “The reason that we’re saying no deal is better than a bad deal is not just because of the number. A bigger number with the text that we have right now is just a bigger empty promise.”
The new text, he said, aims to address some of activists’ concerns. But “it’s not good enough,” he said, because it doesn’t call for enough finance to be “provided” instead of “mobilized”.
In UN climate jargon, mobilized finance can include private sector co-investing with governments. My colleague Fiona Harvey wrote earlier this afternoon about the difference.
Patrick Greenfield
Ministers and their staff are trying to get into a crucial meeting between heads of delegations here in Baku, which still has not begun. Only ministers/heads of delegation and a member of staff are allowed. I am waiting outside with Guardian colleagues and the rest of the world’s media.
Some staff have left their possessions inside but UN security is not letting anyone else in the room. Representatives from Malawi, Russia and elsewhere are stuck outside. Colombian environment minister Susana Muhamad just tried unsuccessfully to get an advisor through.
There’s a lot of waiting around and chaos in Baku, and it does not sound like much is being resolved in the meantime.
A representative from Mali, the only one in the room, just had a lengthy back and forth with security about whether he’d be allowed back in if he went to the toilet. In the end, the conclusion was that he would be.
The UN climate chief Simon Stiell has had to come outside and tell security to get on with it. “The meeting will not start until everyone is ready,” those waiting outside are told.
Dharna Noor
Party delegates are deep in negotiations at the Cop29 conference center.
Outside a meeting room, Panama’s special representative for climate change, Juan Carlos Monterrey Gomez said his mood had changed in the past two hours of negotiations.
“I thought we were getting a deal about 2 hours ago,” he said. “Now I don’t even know what’s happening, I don’t think no one knows what’s happening.”
He said rich countries have failed to put forth an acceptable goal for climate finance. A draft text released yesterday placed the figure at $250bn by 2035, and he said the nations have not budged.
“It’s still $250 which is just ridiculous,” he said “It feels like we just wasted the past two hours.
Even if the goal increases to $300bn by 2035 – an increase to which the Guardian learned developed countries have agreed — he said that would not be enough. If the goal is that low, he said, countries should agree to meet it sooner.
“ I cannot tell you what we’re going to accept or not,” he said. “But if they want to go low then they also need to reduce the timeframe.”
Climate finance is a key issue for Panama, he said. Developed nations “must pay” to help the global south cope with climate damages.
“It’s their responsibility. They must pay for it. We are the victims of this and it just keeps getting kicked and kicked and kicked.
EU minister excoriates “geopolitical power play by a few fossil fuel states”
Fiona Harvey and Damian Carrington
It’s getting heated at Cop29 and German foreign minister, Annalena Baerbock, has excoriated “geopolitical power play by a few fossil fuel states”.
“We are in the midst of a geopolitical power play by a few fossil fuel states. Their playing board is the backs of the poorest and most vulnerable countries. We as a European Union will not accept a deal that comes at the expense of those who suffer most from the effects of climate crisis.
“We will not allow the most vulnerable, especially the small island states, to be ripped off by the few rich fossil fuel emitters who have the backing, unfortunately, at this moment of the President [of Cop29].
“Climate finance and CO2 reduction are closely linked. We, as the EU, therefore increased our financing commitments until 2035. We are continuing to work on building bridges. We are living up to our responsibilities, including as historical CO2 emitters.
What we are seeing here is the last stand by the old fossil fuel world. What we need now are conditions across continents for climate justice, for viable climate financing and for continuation of the path we took in Dubai [when nations agreed to ‘transition away from fossil fuels”, making clear, there’s a vast majority of countries from all around the world believing that climate justice is in the benefit of all and that the strong shoulders carry the heaviest burden.”
Oil-rich Saudi Arabia is a persistent obstructor of action to cut the burning of fossil fuels at UN climate summits. It’s been described as a “wrecking ball” at Cop29. It usually works behind the scenes. But on Thursday, Albara Tawfiq from the Saudi delegation told delegates at Cop29: “The Arab group will not accept any text that targets any specific sectors, including fossil fuels.”
Adam Morton
No surprises here, but the draft text released on Friday included what can be read as confirmation that the Australia-Turkey stand-off over who will host Cop31 in 2026 will not be resolved in Baku and will be pushed into next year.
The countries both announced their bids to host two years ago, and the public and private lobbying has escalated in recent weeks. Australia says it wants to host the event in partnership with Pacific island countries.
The Australian climate change minister, Chris Bowen, stopped in Ankara on his way to Azerbaijan to try to persuade his counterpart, Murat Kurum, to step aside. And the issue was raised during a meeting between the Turkish president, Recep Tayyip Erdoğan, and the Australian prime minister, Anthony Albanese, on the sidelines of G20 in Brazil last week.
Australia is understood to have the support of at least 23 of the 29 members of the Western European and Others Group that will decide where the event is held, including the UK, US, Germany, France and Canada, but Turkey has doubled-down on its campaign. Its representatives have pointed to Australia’s substantial coal and gas exports – it is the third-biggest fossil fuel exporter – and suggested a federal election due by May next year raises uncertainty over the Australian bid.
Bowen responded publicly this week, telling the Guardian that “clarity would be good for everyone involved” – a diplomatic way of urging the Turkish to exit the race – and pointing out only six of 29 Cops have been held in the southern hemisphere. The last Cop in the Asia-Pacific was Bali in 2007.
None of this has moved the needle. The draft text released Friday said a decision should be made no later than June, when diplomats hold a mid-year climate meeting in Bonn, but it is possible it may not be made until the world reconvenes in Belém, Brazil for Cop30.
Spotted just now by my colleague Adam Morton, the EU commissioner Wopke Hoekstra, the US climate envoy John Podesta, the UK’s net zero secretary of state Ed Miliband, and Australia’s Chris Bowen are seen here deep in urgent conversation in the corridor at Cop29.
Hallo, this is Bibi van der Zee, taking over from my colleague Ajit Niranjan. Everything is still on hold in Baku as the conference waits for a new draft text, following a wholesale rejection of the terms offered in the last one. The enormous gap between what developing countries have asked for and what developed countries are prepared to offer is very far from being bridged.
In theory there will be a final plenary later today, but in practice who knows? We’ll be bringing you all the updates as they come.
If you’re looking for a heartwarming story away from the frustration, boredom and tension of high-level climate negotiations, my colleague Patrick Barkham has a touching piece on a 12-year-old girl in Slovenia who is helping to bring back singing cicadas to the UK.
Take a minute to tune out of Cop coverage and read it here.
The new buzzword at Cop29 is “transformational” adaptation
Fiona Harvey
Adaptation often gets overlooked, but the new buzzword at Cop29 is “transformational” adaptation.
What this means is taking a holistic view of adaptation, and making sure it is addressed systematically by countries, instead of approaching it on an ad hoc, project by project basis.
So for instance a country could take steps to overhaul its urban planning system to ensure that new buildings are not being constructed in areas vulnerable to flooding, or change its land use policies to ensure that forests are kept standing, which can protect against mudslides and flooding, and wetlands are intact, to hold more water when rains come, which can protect against drought.
Some forms of adaptation can also help to reduce emissions, and some emissions reduction techniques can also help with adaptation. For instance, helping people in poor countries to use solar cookstoves can reduce their dependence on firewood – which cuts emissions and helps keeps forests standing.
I spoke to Eamon Ryan, the Irish environment minister who is co-chair of the adaptation work here at Cop29, ahead of the draft texts which are now being argued over.
“As we can already see, devastating climate change is coming, even if we stop emissions tomorrow,” he said. “So we need to prepare. And we need to do that particularly in developing countries, because they are the ones being hit most and they are least able to prepare. Many of them also have very small emissions.”
Adaptation had often been an afterthought at Cops, he added. “This whole process has tended to focus on emissions, rightly in some ways, but hasn’t put adaptation centre stage.”
The most vulnerable countries are most in need of finance for adaptation, but most climate finance has gone towards middle income countries or those already able to adapt.
Adaptation is not one of the most controversial issues at Cop, as most countries agree it should have more focus. The issue of “transformational adaptation” has also caught people’s imagination, Ryan said. “It’s a more radical, a more systemic approach,” he said. “We need to progress that. We need to ensure that is now worked on. I think it’s going to be quite big in future.”
He said it was important for Cop29 to recognise the vital role of adaptation in tackling the climate crisis. “Our job is to make sure we keep it centre stage,” he said.
Patience appears to be wearing thin in the final stages of negotiations. Speaking about the just transition work program, which tries to help countries move to a cleaner and more resilient future while decreasing inequalities, German climate envoy Jennifer Morgan said:
“The EU, along with the most vulnerable countries, small island states, the least developed countries as well as countries from Latin America and all other developed countries have clearly stated that the current text is unacceptable.
We do not understand why the presidency is tabling a text in the end game that does not even attempt to balance interests.”
Patrick Greenfield
An agreement on carbon markets has all but been agreed, new texts indicate. They are at the draft decision stage, meaning that they are “not 100% but, like, 99%” ready to go, according to Carbon Brief’s Simon Evans.
The deal will set out the rules for country-to-country carbon trading and provides for the creation of a regulated global market to meet Paris targets, although technical rules for how this works will be sorted out in 2025.
If you would like to read more about what this all means, we prepared an explainer at the start of Cop29 on the good, the bad and the ugly of carbon markets.
Climate campaigners do not appear to have been impressed by the prospect of a higher finance target of $300bn.
Jasper Inventor at Greenpeace said the money that rich countries are understood to have agreed to overnight was “still not enough.”
“We are running out of time and a much better deal quickly needs to be put on the table to match the urgent and escalating needs of developing countries,” he said.
Mohamed Adow, director of Power Shift Africa, said the overall number is “effectively meaningless” because it doesn’t say who should pay.
“Where will the pressure be to deliver that number if it’s not clearly stated to come from the rich world?” he asked.
Adow said:
Developed countries here are trying to unpick the delicate balance agreed in the Paris Agreement. They want to remove any responsibility from themselves to provide climate finance and instead just have everyone making voluntary contributions to the pot. That would be a fundamental re-writing of the entire UN negotiation process and rip up previous COP agreements.
Rich countries have caused the climate crisis. Ever since the first COP it has been recognised that they owe a climate debt to the countries of the global south, to help them cope with the climate crisis they have created. They must not be allowed to dodge that responsibility.
Fiona Harvey
As Cop29 grinds on, something to look out for is how much finance is “provided”, and how much is “mobilised”.
They might sound like the same thing, but not at a Cop. Finance that is provided comes from developed country governments or publicly funded institutions in the form preferably of grants, and highly concessional loans – loans at very low rates of interest.
Finance that is mobilised can include private sector co-investing with governments.
So the EU provides about $30bn of climate finance every year – but it mobilises a further $7bn through private sector co-investing.
Poor countries, quite reasonably, want their climate finance in the form of grants, to avoid getting further into debt. But some countries are deeply reluctant to provide money in this way. France, for instance, through its AFD (Agence Francaise de Developpement) historically provides nearly all its climate finance in the form of loans.
The reasoning behind this is that it gives recipient countries more incentive to spend the money in the most efficient way, and gives the providing country some form of accountability over how the money is spent. (It is also treated differently in the developed country’s own budgets and accounting.) The big downside is that it counts towards debt for developing countries, which is why many rich countries are more willing to talk about grants, and deals such as “debt for climate swaps”.
It’s also important to note that the habit of preferring loans is not confined to developed countries – China also provides most of its “south-south” cooperation in the form of loans, on which developing countries are currently paying more than $300bn a year in interest alone.
At Cops, there are no hard and fast definitions of climate finance. That is partly in order to give both donors and recipients some degree of flexibility. It is also because there is little agreement on what such a definition should be. If climate finance had to be defined, several participants told the Guardian, this Cop would have to go on for months longer rather than (hopefully) mere hours.
What definitions there are go back to the 1992 UNFCCC, the Paris agreement of 2015, and decisions of various Cops in between.
For instance, article 11 of the UNFCCC states: “A mechanism for the provision of financial resources on a grant or concessional basis, including for the transfer of technology, is hereby defined. It shall function under the guidance of and be accountable to the Conference of the Parties, which shall decide on its policies, programme priorities and eligibility criteria related to this Convention. Its operation shall be entrusted to one or more existing international entities.”
And in the Cancun accords of 2010, paragraph 98 states: “Recognises that developed country Parties commit, in the context of meaningful mitigation actions and transparency on implementation, to a goal of mobilizing jointly USD 100 billion per year by 2020 to address the needs of developing countries; 99. Agrees that, in accordance with paragraph 1(e) of the Bali Action Plan, funds provided to developing country Parties may come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources; from Decision 1/CP.16.”
Damian Carrington
Social media boosters for Azerbaijan’s authoritarian regime are working the weekend, praising President Ilham Aliyev for his “strong political will” which “played a decisive role in our success today”.
That will confuse the delegates at Cop29, who remain a long way from any success, and who also remember Aliyev’s extraordinarily undiplomatic statements at the start of the summit. He doubled down on oil and gas being a “gift from God” and then accused France of brutal suppression and killings in the Pacific island region.
France, which has supported Armenia in its conflict with Azerbaijan, then cancelled the attendance at Cop29 of its top climate official. Countries hosting Cops usually put aside bilateral disagreements in order to act as neutral brokers in the negotiations.
The Guardian revealed in October an army of apparently fake social media accounts boosting Azerbaijan’s hosting of Cop29 .
The hidden $100bn issue
Our reporters Dharna Noor and Patrick Greenfield have hit upon a problem that makes the sums of money on the table at Cop29 considerably smaller than people may first think.
The proposed text on climate finance released at Cop29 makes no mention of inflation. This makes a massive difference to the scale of finance being discussed.
In 2009, developed countries agreed that by 2020, they would collectively mobilize $100bn per year to support developing countries’ decarbonization and adaptation plans. US dollar inflation was 20.6% in this time period.
But when monitoring contributions, inflation was not taken into account, the OECD confirmed to the Guardian. As a result, the target became easier to meet over time, though countries met it late.
The Cop29 draft texts released on Friday set a new proposed finance goal: $250bn by 2035. But they will not rise over time to keep pace with inflation.
This has a very big impact on numbers, as the analysis shows below.
$100bn in 2009 dollars would equal $145.3bn today if we adjust for US inflation in this time period.
Returning to the proposed $250bn target, that becomes $345bn if we assume the average annual inflation rate of the US of 2.38% over the last 15 years, according to a back-of-the-napkin calculation from my colleague Patrick Greenfield.
“Agreeing a figure of $250 billion mobilised per year by 2035 would not only be inadequate but shameful. Adjusted for inflation, it represents virtually no increase in public finance from developed countries beyond the $100 billion commitment made 15 years ago,” Salomé Lehtman, project and advocacy advisor at Mercy Corps, said.
And $390bn annually – the number proposed in a study by top academics as fair and in line with the Paris agreement – would in 2035 be $538bn in today’s money, assuming the same rate of inflation.
“Targets will need to adjust for inflation over time,” Amar Bhattacharya, the executive secretary of the UN’s independent high-level expert group on climate finance and co-author of the study, told the Guardian.
Put another way, the proposed $250bn target for 2035 is really a $197.6bn target, assuming the same inflation rate. This means the target is not even a doubling.
“The proposed climate finance goal in the latest text is an embarrassment,” said Collin Rees, a manager at the climate justice NGO Oil Change International, who shared calculations from the IMF with the Guardian.
Dharna Noor
As we await new Cop29 draft texts on Saturday morning, I chatted to Thoriq Ibrahim, climate, energy and environment minister for the Maldives, who is leading negotiations for the small island nation.
Yesterday’s drafts were “totally unacceptable,” he said.
The $250bn goal put forth for climate finance was “absolutely not at all adequate,” he said, and “barely an improvement” on the $100bn goal set in 2009.
“If you look at the $250 billion with inflation, it’s almost same goal,” he said.
Rich countries have privately agreed to up the goal to $300bn, the Guardian learned this morning.
The minister said he could not comment on whether that figure would be acceptable until it is officially on the table.
But the number is not the only concern for vulnerable countries, he said. Small, vulnerable island nations have said they must be allocated at least $39 billion a year to cope with the costs of the climate crisis.
No such provision was in yesterday’s draft text, Ibrahim noted.
“We raised this concern with the presidency,” he said. “They listened, they said that they will be talking with the rest of the groups.”
Upon the release of yesterday’s text, activists said that “no deal is better than a bad deal” and said they had heard growing calls for a walkout.
Ibrahim declined to comment on their remarks, but said: “We want to [leave] this Cop and go home with an acceptable, agreeable outcome, but one has to be on the table.”