COP29: How to finance global climate action?

The UN Climate Change Conference is the annual meeting of the parties to the United Nations Framework Convention on Climate Change (UNFCCC), known as the Conference of the Parties (COP). The focus of this year's 29th World Climate Conference (COP29) is climate finance. A new target for climate finance, the New Collective Quantified Goal (NCQG), is to be adopted. The negotiations on climate finance deal with the question of how countries can be supported in financing their climate action, including mitigation efforts and the necessary adaptation to climate change, with the help of the NCQG. That much is clear: Far more funding is needed than the 100 billion US dollars per year agreed to date.

The most important negotiating points on climate finance

The need for climate financing in developing countries is enormous. The necessary investments can only be provided to a limited extent through public climate finance. The redirection of financial flows, including from the private sector, is essential. Public funds and suitable framework conditions are important in order to catalyse public and private investment on a significant scale for climate action and redirect investments that are detrimental to climate action (for example, ending subsidies for fossil fuels).
The world has changed since the UN Framework Convention on Climate Change was adopted in 1992 and the division of states into developed countries and developing countries (Annexes to the Framework Convention on Climate Change) laid down therein. More countries are now in a position to make financial contributions, as we can see from the existing support that, for example, China provides.
The preliminary negotiations on the NCQG are proving difficult. The unresolved points for negotiation include the amount of funds that developed countries provide and mobilise; the donor base, i.e. which countries contribute; and the sources of funds, i.e. public grants, (subsidised) loans and funds from the private sector.

Furthermore, questions regarding access to funds, the time frame, and the review dates of the NCQG are controversial. A balanced outcome for the climate finance target is important in order to create trust among the signatory states and to spur ambitious climate change mitigation and adaptation measures.

More efforts needed to reduce greenhouse gases

More efforts are urgently needed in view of the lack of progress in reducing global greenhouse gas emissions: In 2023, greenhouse gases with a climate impact of 57.1 gigatons of carbon dioxide were emitted worldwide, according to the latest Emissions Gap Report by the UN Environment Programme (UNEP EGR 2024). With an increase of 1.3 percent compared to 2022, this is a new high in global emissions. The baseline situation regarding global efforts to reduce greenhouse gases has therefore not improved since last year's COP28 in Dubai.

The COP28 conference sent a strong signal with concrete targets on renewable energy, energy efficiency, phasing out fossil fuels in energy systems, halting deforestation and promoting a circular economy and sustainable lifestyles. However, resolutions alone do not increase ambition; they must also be implemented. The negotiations at the COP Subsidiary Body meeting in Bonn in June this year (SB 60) have also shown that it will be difficult to agree on an ambitious signal for the reduction of greenhouse gases at COP29.

New climate action plans must be aligned with the 1.5 degree target

At COP28, ambitious targets were also set for the new national climate action plans, the so-called Nationally Determined Contributions (NDCs), which all signatory states must submit by February 2025: It was decided that these new plans should be aligned with the goal set out in the Paris Agreement of limiting the temperature increase to 1.5 degrees Celsius. The new targets should be significantly more ambitious than the existing targets, cover all greenhouse gases, sectors and the entire economy and outline an absolute emissions reduction target. The new NDCs must also show how the goals formulated at COP28 will be implemented in practice.

In the energy sector, for example, this means that a tripling of renewable energy capacities and a doubling of energy efficiency must be achieved globally by 2030. It is also crucial to move away from fossil fuels. An NDC aligned with 1.5 °C should explicitly refrain from developing new coal, oil and gas production and reduce existing production. In addition, the abolition of subsidies for fossil fuels should be credibly presented in the NDCs. Investing in ambitious national climate action plans and their implementation are key negotiating points on the way from COP29 to COP30 in Belém (Brazil) next year.

Ambitious signals for the new NDCs at COP29 would also send a strong message to business and investors and thus help to trigger the necessary investments.

UBA involved in COP negotiations

COP29 will take place in Baku, Azerbaijan, from 11 November 2024. It is scheduled to end on 22 November 2024. The President of the UBA, Prof. Dr. Dirk Messner, and other UBA experts are part of the German delegation, supporting the German Federal Government and the EU in the negotiations and also organising events on-site themselves. In particular, they are involved in negotiations on NDCs, the implementation of the global stocktake completed last year, science, agriculture, ACE (Action for Climate Empowerment), transparency and raising ambition.