This article presents a detailed analysis of a draft document related to the post-2025 goal for climate finance. It is being updated throughout the day and an edited version will be sent out each evening as a newsletter. You can sign up here.
Unraveling the Disputes in Climate Finance Goal
Developing-Country Preferences vs. Developed-Country Demands
Early on Thursday morning, the COP29 Presidency released a draft document aiming to serve as the basis for a deal on the climate finance goal. As expected, the most contentious issues like who pays, how much, and the goal structure remain undecided. The text offers two main options. Option one involves an annual goal starting from 2025 and running until 2035, reflecting developing-country preferences. Option two is a goal to be reached by 2035, giving wealthy nations more time to ramp up. India and donor countries have given up on the Just Energy Transition Partnership, as stated by a German official. Option one stipulates that finance would come from developed to developing countries, with developing countries also being "invited" to provide finance voluntarily, as long as it doesn't count towards the main goal. Option two refers to money coming from a "wide range of sources and instruments," including public, private, and innovative sources. It emphasizes that developed countries should take the lead but also includes efforts of other countries with economic capacity to contribute. There is a concern that option two could allow developed countries to include money from carbon markets as it leaves the list of sources open-ended.While option one only has a provision and mobilisation goal, option two has a mobilisation goal led by developed-country governments and a broader investment goal. The extent to which the world's poorest countries (LDCs) and small island developing states (SIDS) should be prioritized is still in dispute. LDCs and SIDS want an annual minimum of $220bn and $39bn respectively, but this is left in square brackets in the text, indicating no agreement. Alternative options focus on stressing the particular vulnerability of LDCs and SIDS or call for "equitable resource distribution" without mentioning country groups.Climate finance experts have different views. Joe Thwaites from the Natural Resources Defense Council said the text caricatures developed and developing country positions and the presidency needs to propose option 3. Harjeet Singh from the Fossil Fuel Non Proliferation Treaty Initiative said the text includes good, bad, and "some downright ugly" options and is concerned about the lack of sub-goals for cutting emissions, adapting to climate change, and addressing loss and damage. Laurie van der Burg, the global public finance manager at Oil Change International, pointed to language promoting scaling up climate finance from new sources and instruments including "high-integrity voluntary carbon markets" and warned that labelling carbon credits as climate finance should be removed to avoid creating a dangerous escape route for polluters. She also noted that this draft text does not have an option ruling out counting investments in fossil fuel infrastructure as part of climate finance, which is incompatible with the goals of the Paris Agreement.