Finance Underpins Everything, Says COP29 President Designate

Negotiations on the new climate finance goal at the next UN climate conference in Azerbaijan will be an opportunity to unlock funds and build trust between the parties, COP29 president designate Muktar Babayev said on Thursday.

Addressing the opening segment of the two-day Copenhagen Climate Ministerial, he said COP29 comes at a complex moment when the world has seen the first one-year period of global average temperature 1.5 degrees Celsius above the pre-industrial reference period (1850-1990).

"Vulnerable communities are facing one crisis after another due to the rising temperatures. These communities must be in the front and centre of our mind when we meet in Baku," he said.

"Finance underpins everything and is a critical enabler of climate action," Babayev said.

He said many are losing trust in the UNFCCC process due to the 'growing gap in their needs and what's available' and urged all to work tirelessly to mobilize resources.

"Finance is at the heart of climate negotiations this year. The negotiations on a New Collective Quantified Goal on climate finance are an opportunity to set a new path, unlock funds and build trust between the parties," Babayev said.

Other sources of finance, such as taxation and fossil fuel subsidy reform, are on the table to bridge the gap. In 2022, public financial support for fossil fuels hit a record high of $1.7 trillion globally, according to research by global think tank International Institute for Sustainable Development.

All parties will be empowered to raise their ambitions if a clear and strong signal is sent, that more public and private finance will be allocated to climate targets, Babayev said.

In parallel to mitigation, countries need urgent progress to adapt to the escalating impacts of climate change, but implementation depends on finance, he said.

The Copenhagen ministerial meeting is the first major climate gathering since COP28 in Dubai in December and an opportunity for climate leaders to set expectations and priorities for COP29 in Azerbaijan in November.

The discussions will have a strong focus on the next climate finance goal – the biggest issue on the COP29 agenda -- and the next generation of national climate plans that all countries are required to update by early 2025.

Developing countries, including India, are calling for $1 trillion a year to support their climate plans. Rich countries have yet to deliver on their commitment to provide $100 billion to developing countries to deal with climate impacts.

"The finance battle looms large ahead of COP 29," said Farooq Ullah, senior policy advisor at IISD.

"To meet this challenge, governments must now look at all forms of resource mobilization, including the domestic reform of public finances and leveraging private finance, as well as redirecting all harmful finance in line with the Paris Agreement," he said.