The 29th Conference of the Parties (COP29), a U.N.-led forum for international stakeholders to meet and negotiate on climate policy, drew to a conclusion last month in Azerbaijan with the announcement of a new climate finance target. No surprise there, as the main point of these gatherings is for governments and other groups to make splashy announcements about climate policy deals.
At COP26, for instance, South Africa announced it had reached an $8.5 billion deal with several foreign governments for a Just Energy Transition Partnership (JETP), the first of its kind. Two years later, at COP 28, a deal was struck to operationalize a Loss and Damage Fund. Lauded as a historic achievement, the Fund would be seeded with contributions from rich economies and the money would be used to compensate lower-income and vulnerable countries for losses and damages incurred as a result of climate change.
The expectation entering COP29 was to hammer out a blockbuster deal on climate finance. But the conference came to a bumpy end, going past its scheduled end date as negotiators wrangled over details and wording. At one point vulnerable nations, including a group of small developing island nations which are at the forefront of climate change risk, staged a walkout.
These groups were unhappy with the amount pledged as well as the slow pace of progress on climate finance, and they are also the ones that can least afford to wait another for rich countries to sort out their financial commitments. Meanwhile, Saudi Arabia worked to undermine proceedings by refusing any deal that involved the phasing out of fossil fuels. This marks a reversal from previous commitments, which just goes to show how these agreements announced to much fanfare are not actually all that durable.
In the end, it was agreed that developed countries would pledge $300 billion in annual climate finance for developing countries. Not now, but by 2035. Not only is this figure regarded as insufficient, but as is typical with these kinds of deals (see Paris Agreement and the United States) the commitments are not binding in any real sense.
As Saudi Arabia showed with regards to its position on fossil fuels, countries can under-deliver or back out of their end of the bargain without suffering significant repercussions. Often this is achieved by making the wording on the agreement so vague that everyone can agree in principle, but without going into a level of detail that would require difficult decisions. And without specific details, a broad agreement to increase climate finance to $300 billion a year a decade from now doesn’t tell us much about how it will actually work or what it will do.
The Loss and Damage Fund helps illustrate this point. Although branded as a historic achievement when it was first unveiled a few years back, exactly how it will function remains a work in progress. While the Fund is expected to begin disbursing money next year, with only a bit more than $700 million dollars pledged to date, the immediate impact it can have in vulnerable countries is limited.
The Just Energy Transition is another example. Despite being unveiled three years ago, translating the laudable ambition of the JETP into actionable policy on the ground in South Africa has encountered numerous practical obstacles. A similar Just Energy Transition deal announced for Indonesia has also been slow to take off.
In the end COP29 did provide a shaky platform for the usual stakeholders to make splashy announcements. In the process it also highlighted the limits of international climate finance agreements, as countries increasingly look inward to their own domestic interests and these complex, multi-stakeholder negotiations become more fraught and contentious. Many countries, including in Southeast Asia, have begun turning to simpler bilateral deals.
In Indonesia we have seen the UAE, China, and South Korea begin investing in a range of bilateral clean energy projects, from solar farms to solar panels to batteries, and I don’t think these have much connection to climate finance agreements being struck at COP. Rather, I think they are in the geopolitical and economic interests of the parties involved, and so they move forward.
And while there is a valid case that international forums have a role to play in setting the larger agenda and establishing broad normative goals, given the ever-shrinking window of opportunity the world has to tackle climate change there isn’t a lot of time to keep wrangling over the finer points of largely unenforceable international agreements.