COP29 Challenges: Bonn Talks Stall On Climate Finance Progress

Countries made little progress in finding common ground on the crucial issue of climate finance at the mid-year UN climate talks in Bonn, Germany, even as floods, extreme rains, and brutal heatwaves upended lives and livelihoods in several nations.

Negotiators will now have to work exceptionally hard to achieve success at the UN climate conference (COP29) in Baku, Azerbaijan, where the world will reach the deadline to agree on the New Collective Quantified Goal (NCQG).

The NCQG is the new amount that developed nations must mobilize annually starting in 2025 to support climate action in developing countries.

Some wealthy nations argue that countries with high emissions and higher economic capacities, such as China and petro-states that classify themselves as developing countries under the Paris Agreement, should also contribute to climate finance.

Developing countries, however, cite Article 9 of the Paris Agreement, which states that climate finance should flow from developed to developing nations.

Developed countries want the funds to prioritize nations most vulnerable to climate impacts, such as the least developed countries and small island developing states. Developing countries assert that they all deserve support.

Developing nations also demand clarity on what constitutes climate finance, insisting that development finance should not be counted as climate finance and that funds should not be provided as loans, as has happened in the past.

Climate policy experts at the think tank E3G said the Bonn talks have left a steep path ahead, and an escalation in political dialogue will be crucial for achieving a breakthrough in negotiations.

The independent think tank Centre for Science and Environment said differences between developed and developing countries on the NCQG have deepened instead of converging, signaling a long and arduous path to an agreement at Baku.

Developing countries made clear demands for grant-based and concessional financing for climate action and highlighted that the financial system creates a 'disenabling' environment for finance to flow to them.

The G77 and China bloc remained united in its demands and upped the ante in its statement at the closing plenary, saying they 'cannot go beyond COP29 without defining the NCQG' and that there is a need to 'move from conceptual to concrete discussions'.

However, developed countries chose to focus on distractions such as the expansion of the contributor base for the NCQG.

"Several developed countries continued to call for the provision of climate finance to be extended beyond just developed countries to include certain developing countries as well, arguing that this would have the new climate finance goal reflect 'new economic realities'," said Sehr Raheja, programme officer for climate change at CSE, who attended the Bonn talks.

Regarding the 'quantum' of the NCQG, the Like-Minded Developing Countries, Arab Group, and African Group have suggested amounts ranging from $1.1 to 1.3 trillion per year. However, developed countries did not engage meaningfully on the issue of quantum, nor did they propose their own amounts.

Tasneem Essop, Executive Director of Climate Action Network International, said the outcome of the Bonn climate talks reflects a decades-old fight to get rich nations to meet their obligations and support developing countries in taking action to address the climate crisis.

"Until that deadlock is broken, all other issues (such as mitigation and adaptation) will be held hostage," she said.

Developing countries have put proposals for the new climate finance goal on the table, but developed countries have refused to engage on how much public money they are willing to provide. This is despite climate finance being key to staving off climate catastrophe and a legal obligation under the Paris Agreement and the UN Framework Convention on Climate Change, said Mariana Paoli, Global Advocacy Lead at NGO Christian Aid.

"This failure by rich countries is a symptom of their lack of political leadership. The poorest and most vulnerable and marginalized people need financial support today," she said.

Sindra Sharma, Senior Policy Advisor at the Pacific Islands Climate Action Network, said finance is a critical enabler of ambitious climate action.

"Achieving the implementation of 1.5 degree-aligned Nationally Determined Contributions (NDCs) requires trillions in public finance from developed to developing countries." she said.

Countries are required to submit their third round of NDCs 9 to 12 months before the UN climate talks in Brazil next year.

NDCs are national climate plans to achieve the goals set out in the 2015 Paris Agreement, including limiting global warming to well below 2 degrees Celsius and preferably to 1.5 degrees Celsius compared to the 1850-1900 average.