COP29: Nations Agree On $300bn Annual Climate Fund

At the COP29 summit in Baku, global leaders have agreed on a new climate finance target of $300 billion annually by 2035 to aid poorer nations in combating climate change impacts. The agreement, reached after prolonged negotiations, has sparked mixed reactions: while some view it as a meaningful step, others argue it falls short in addressing the full scale of the climate crisis.
This financing plan builds on the previous $100 billion annual goal, first met in 2022, which is due to expire in 2025. Its purpose is to bolster vulnerable nations in managing the devastating effects of climate change, including storms, floods, and droughts, often driven by the historic emissions of industrialised countries.
UN Climate Chief Simon Stiell emphasised the urgency of global climate finance, warning that climate disasters are increasingly driving up living costs worldwide. Stiell praised the agreement as an “insurance policy” for humanity, aiming to sustain the clean energy transition and protect lives. However, he cautioned that its success hinges on timely and full contributions.
Despite this achievement, criticism has emerged. Chandni Raina, representing the Indian delegation, dismissed the agreement as an “optical illusion,” arguing it inadequately addresses the severity of the crisis. “This, in our opinion, will not address the enormity of the challenge we all face. Therefore, we oppose the adoption of this document,” she stated.
The agreement paves the way for next year’s climate summit in Brazil’s Amazon rainforest, where countries will outline the next decade’s climate action strategies. The summit highlighted ongoing tensions about the financial responsibility of wealthier nations—whose historical fossil fuel use has largely contributed to climate change—to support affected developing countries. These debates underscore the divides between developed countries, bound by fiscal constraints, and developing nations, which bear the brunt of climate-related costs.
The group of nations committed to climate finance includes around two dozen industrialised countries, such as the U.S., Canada, and EU members, as originally designated during 1992 UN climate talks. Recently, European nations have advocated for expanding this list to include emerging economies like China and wealthy Gulf nations. Although the agreement encourages voluntary contributions from developing nations, it stops short of mandating their involvement.
The deal also introduces a broader target of raising $1.3 trillion annually by 2035, combining public and private sector funding. This figure, economists suggest, aligns with the amount needed to mitigate global warming effectively. Additionally, new guidelines were set for a global carbon credit market to fund climate initiatives, including reforestation and clean energy projects, through the sale and purchase of carbon credits.