As the dust settles from COP29 in Baku, we are left to ponder the mixed success of this so-called finance COP. 

COP29 refers to the 29th annual Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC). It is a global summit where countries, organisations, and stakeholders convene to discuss and negotiate actions to combat climate change. The size and complexity of the event are only second to that of its reason for existence: Climate Change. COP 29 gathered about 55.000 participants in total with approximately 18.000 participants from delegations representing about 200 negotiating parties. 

Timidly celebrated as an important stepping stone by a few, and virulently criticised as a shameful missed opportunity by most, the outcomes of COP29 serve as a stark reminder of the daunting challenge ahead of us, and the increasing difficulty of conducting fair multilateral negotiations in a world torn apart by power politics.  

Perhaps in the face of meagre advances and widespread disappointment, avoiding a full collapse of negotiations, which would cast further doubts on the relevance of COPs, remains the only source of satisfaction. 

Although the final COP 29 agreement covers more than a compromise on climate finance, we will mainly concentrate on this central and strategic element.  

A fragile compromise on finance 

At its heart, COP29 was meant to address climate finance—how to fund the urgent and escalating costs of mitigating and adapting to climate change. The negotiations on the so-called New Collective Quantified Goal (NCQG) were aimed at replacing the previous commitment from developed economies to provide USD 100 billion annually to developing economies to address climate mitigation and adaptation. In contrast, the NCQG is to additionally cover “Loss & Damage” already incurred by developing economies, a financial element fiercely negotiated at COP 27 in Sharm El Sheikh. 

The resulting agreement on the NCQG sets a target of USD 300 billion annually by 2035, a figure dwarfed by the USD 1.3 trillion estimated as necessary by the Independent High-Level Expert Group on Climate Finance (IHLEP), launched in COP 26 to provide an impartial perspective on climate finance needs. 

While this compromise has been understandably considered by the more fragile and climate-exposed parties as “offending” and “shameful”, it is also important to figure out how irreconcilable are the perspectives of respectively funding and receiving parties. 

If the USD 1.3 trillion expectation of developing economies finds legitimate roots from the independent assessment from the IHLEP, the low figure of USD 300 billion annually should probably be considered as the maximum figure that would be politically defensible for developed economies, especially in a context of a likely withdrawal of the United States from the Paris Agreement and the embattled financial situation of the European Union. 

As if numbers were already not speaking sufficiently by themselves, the divide in negotiations also derives from very diverging views on the nature of the funding.  

Developed economies also introduced a fundamental twist in the negotiations by extending the sources of funding from originally grants only, to include other sources of finance such as loans and private sources. While loans will irremediably aggravate the already critical debt crisis from many countries of the Global South embattled in their fight against climate impact, private investment is in turn legitimately considered a highly uncertain and unpredictable source of funding. While strongly watering down the already weak funding commitment from developed economies to the Global South, it also conveys the uncomfortable perception that the climate woes of the Global South are perhaps cynically seen as a business opportunity for developed economies. 

Finally, while Mr. Mukhtar Babayev, the President of the COP 29, and incidentally a former executive of SOCAR, the State Oil Company of Azerbaijan, was heavily criticised for his poor leadership leading to chaotic negotiations throughout the process, many delegations from the Global South were left with the bitter perception that negotiations were intentionally kept opaque and eventually staged. 

“Transitioning away from fossil fuels”; perhaps, but stunningly imperceptibly 

A year ago, during COP 28 in Dubai, the COP process was, in full respect of the usual “COP dramaturgy”, on the brink of total collapse until the very end over the extremely symbolic issue of including specific wording linking climate change to fossil fuels. 

At the last minute, Sultan Al Jaber, President of COP 28, and also incidentally President of the Abu Dhabi National Oil Company (ADNOC), finally conceded a timid but how important inclusion in the final text of the need to “transition away from fossil fuels”. 

While this highly imprecise statement was considered a major step forward in the global fight against climate warming, therefore also dubbed as “the beginning of the end of fossil fuels”, COP 29 saw an unexpected retreat on the fossil fuel front. Under the veto from Saudi Arabia, supported by a few petro-monarchies and oil-rich countries, the inclusion of any such wording was blocked from reaching the final agreement text. 

Fossil fuels interests are pushing back, echoing the “drill, baby drill” rallying cry from the future US administration, oil majors, as if galvanised by an upcoming new gold era of deregulation, are all individually denouncing their earlier emission reduction commitments and scaling back their investments in clean and transition infrastructures. 

A growing North-South divide  

 While COP 29 did not primarily focus on climate mitigation - which will come back to the fore next year at COP 30 in Belem, with countries required to submit revised NDCs by February 2025 - it was still generally disappointing, given the perceived lack of ambition for more aggressive emission reductions. An alarming finding considering the increasingly severe impacts of climate warming on our societies, including now in developed economies. In Europe, the dramatic floodings in Valencia (Spain) last month were the last of a longlist of increasingly frequent severe climate events occurring throughout Europe over the last years. 

But perhaps the most critical outcome of COP 29 resides in the growing mistrust between negotiating parties, which vastly reflect a broadening divide between rich countries and developing economies, generally dubbed, and already referred above, as the Global South. While the progress of future COPs can only result from a restored mutual trust in such a multilateral negotiation process, the thinly veiled failure of COP 29, was also marked by a resounding absence of the political leaders from key negotiating parties such as, US, EU, China, France, Germany, and India to name a few.  

In that respect, COPs constitute both a driver and an indicator of the state of multilateralism, and their outcomes, a reflection of the evolving World Order. Beyond the obvious climate emergency, the restoration of high profile successful COPs is also essential for preserving a credible framework for future multilateral negotiations. This can only be achieved if leaders from both the Global Noth and South, beyond making more ambitious promises, collectively deliver tangible actions that fully acknowledge the essential principle of “common but differentiated responsibilities”. 

The stakes are particularly high for the European Union, in its growing challenges to maintain its strategic autonomy, which might feel increasingly isolated in a fragmented world where the United States is set to scale back to a rather isolationist stance. 

The road to COP 30 

The scale of the challenge facing COP 30 Presidency in Brazil has dramatically increased as a consequence of COP 29 failures. 

First, it will assume responsibility for the many additional thorny agenda items left open in COP 29 for resolution in COP 30. They constitute additional areas of discontent and disagreement, adding complexity and harming the wider negotiations. 

But most importantly, it will need to rebuild the eroded and now largely damaged trust in the UNFCC process; a trust which is a pre-requisite for ensuring countries continue participating in good faith, and crucial to brokering meaningful consensus in multilateral forums.  

The unthinkable retreat regarding fossil fuels reference, resulting from a bare lobbying of Saudi Arabia against a previously adopted consensus, needs also to be vigorously addressed to restore credibility in the process. 

In the run-up to COP 30, the agenda remains deeply challenging, the UNFCC process is more discredited than ever, and the world is increasingly fragmented. Meanwhile, the climate alarm has been snoozed far too many times.  

This leaves Luiz Inácio Lula da Silva, President Lula, with an extremely narrow path to success. A success that has become more than vital for our collective future. President Lula will certainly capitalise on the peculiar geopolitical profile of Brazil: a strong supporter of multilateralism, a founding member of the BRICS, an oil- producing country with high environmental ambitions, and an equal partner to both Unites States and China. All of this will hopefully enable him to assume the delicate role of acting as a neutral broker between the Global North and the Global South.