Cop29 in Baku, what the new draft on climate finance says (but above all what it doesn’t say).

ROMA – As can easily be imagined, given the progress of the first ten days of negotiations at the twenty-ninth United Nations World Climate Conference (Cop29), the disagreement between the governments. With less than two working days left before the scheduled end of the summit. This is the beginning of the article by Andrea Barolini, director of Valori.it , news on ethical finance and sustainable economy.

From trillions to trillions. And as can easily be imagined, the “step forward” is what was essentially “dictated” at the beginning of the week by the Heads of State and Government meeting in Rio de Janeiro, Brazil: moving from billions (billions of dollars) a trillions (trillions) regarding the main objective of COP29. That is, to create a new collective quantified objective in order to finally allocate the capital necessary to deal with the mitigation of climate change, adaptation to it and compensation for the losses and damage suffered by the nations most affected but least responsible for global warming.

Ten pages, we talk about thousands of billions but without other indications. The draft is ten pages, but still has 46 square brackets (indicating points of disagreement) and a series of options on all relevant points. In other words, apart from accepting the G20 indications on the need to multiply the quantumnothing has yet been decided on the rest. Neither who will have to pay, nor who will be part of the audience of those who will have to receive, nor in what way such capital will have to be allocated (whether through grants or loans).

The heart of the problems from paragraph 22. It is clearly visible starting from paragraph 22, the heart of the problems. The governments explain that the decision to create the Ncqg (i.e. the New quantified collective objective on climate finance) and that it will be necessary to reach «thousands of billions of dollars per year, starting from 2025-2035» (a rather wide range of time). Adding an interesting detail, which probably represents a concession to developing countries: the fact that the mechanism, whatever it is, will have to be non-debt inducing. That is, it must not encourage the indebtedness of the nations that will benefit from it.

The trick to get around the problem of China’s status. It is then confirmed that the money needed for the demolition will have to end up in the cauldron of greenhouse gas emissions, and for adaptation to the impacts of climate change, both for the loss and damage. However, there remains no indication precise number also regarding what rich countries will have to pay out. Paragraph 23 indicates that “developed nations will have to guarantee at least X billion dollars per year”.

The paragraph dedicated to emerging countries. As regards the contribution that could be granted by those States which, to date, are still considered developing, but which have in fact recorded gigantic growth in recent decades (this is mainly the case of China), paragraph 24 seems to dictate a possible way out. In fact, the draft indicates that «for those countries that wish to contribute, they will be able to do so on a voluntary basis, in accordance with Article 9 of the Paris Agreement». A compromise that could allow us to get around one of the most difficult issues to untangle in the COP29 negotiations.

Burden-sharing agreements for developed countries. Another noteworthy phrase is the one in paragraph 25, which talks about establishing gods burden-sharing agreements for developed countries: the burden-sharing arrangements. This represents the hypothesized key to allow us to establish how much money each of the rich nations should put in: with this formula, in fact, quotas should theoretically be established based on everyone’s responsibility in fueling climate change. Burden sharing, according to the text, should be based “on historical greenhouse gas emissions and gross domestic product per capita”. Where the “per capita” specification is undoubtedly an achievement of China, a country with an enormous GDP but which has 1.4 billion inhabitants.

Limit global warming to 1.5°. The following paragraph reiterates the need to aim for the limitation of global warming to 1.5 degrees centigrade. While in the next one it will be necessary to mobilize “all financial sources”. Similarly, paragraph 28 highlights the need to draw on “a broad spectrum of sources and tools, including public, private and innovative ones, from bilateral as well as multilateral channels”.

* Andrea Barolini – director of Valori.it