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Deep divisions over climate financing heading for stalemate summit

European and US backtracking on green policies could block cash for countries hardest hit by extreme weather

Entering the final days of the COP29 climate summit in Azerbaijan, little significant progress is expected on climate finance with West and Eastern powers stuck in a holding pattern.

One of the priorities facing delegates has been to replace the longstanding US$100 billion a year climate finance pledge – viewed by developing states as inadequate even if industrial countries consistently failed to meet it – with a New Collective Quantified Goal worth over $1 trillion a  year for five years from 2025 (AC Vol 65 No 23, High stakes but low ambitions at Baku’s geopolitical climate summit).

But shifting political alignments – a lame duck Joe Biden administration and the European Union retreating from the ambition of its Green Deal laws – have held back progress on financing (AC Vol 65 No 13, Stalemate on climate finance talks irks African negotiators).

Europe and other wealthy nations want to widen the contributor base for international climate assistance. They have been pushing for China and Saudi Arabia, both of which are still classified as ‘developing’ economies, to contribute.

The EU also wants commitments to phase out fossil fuels and move towards global carbon pricing as part of a broader agreement on new finance. ‘We’re very far apart,’ the EU’s chief climate negotiator Wopke Hoekstra conceded during a press conference in Baku on 18 November.

Zhao Yingmin, the head of China's climate delegation, is pushing for higher climate finance targets. But Beijing’s line is that it will make voluntary contributions to future climate finance, rather than obligatory commitments.

It has combined forces with the G77 group of developing countries to instead demand an annual climate finance target of $1.3tn.

Over the weekend, leaders who met for a G20 summit in Brazil reached a tentative agreement for a deal that would use a new definition of ‘developing’ economies, widening the number of contributing countries.



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