The U.S. bears a particularly large share of the historical responsibility for climate finance.
Climate finance remains a contentious issue, with many industrialized nations, particularly the U.S. and the EU, showing reluctance to fully honor their financial commitments.
COP29 is currently taking place in Baku, the bustling capital of Azerbaijan, a country long known for its oil exports. The region’s rich oil reserves have been a subject of fascination for centuries.
The legendary explorer Marco Polo, traveling near the Caspian Sea in the 13th century, described a site in the region of present-day Azerbaijan—believed to be Baku—where he witnessed 'a stream of oil gushing in huge abundance, so much that a hundred ships could load it at once.’
According to Polo, the oil was “not good for eating, but good for burning.” Baku’s oil-rich history was thus established, and it has played a significant role in shaping global energy markets ever since.
Civil society calls for inclusive climate action ahead of COP29
In the modern era, Baku remains a source of fascination, with its pivotal role in the oil industry detailed in the chapter “Where It Rains Petroleum” from The Romance of Modern Chemistry, a popular science book by J.C. Philip published in 1910. Once supplying half of the world’s “black gold,” Baku’s oil wealth was integral to the Industrial Revolution. However, as the world transitions to addressing climate change, oil—once seen as a game changer—has become a key contributor to global warming, accounting for over 42 percent of fossil fuel emissions today. Governments, institutions, and communities are now urgently seeking alternatives.
The UN's COP29 climate summit in Baku is focused on climate finance, with an emphasis on raising funds for developing countries impacted by the climate crisis. The summit is often referred to as the “finance COP” because its core theme is scaling up every country’s climate ambitions and finding the necessary funds to meet them. Four key terms are driving negotiations: loss, damage, adaptation, and mitigation. These terms represent the four pillars of climate action: funding infrastructure to protect vulnerable populations from climate impacts, transitioning to net-zero technologies, adapting to environmental changes, and providing recovery funds in the event of climate-related disasters.
A primary agenda item at COP29 is to adopt a new global climate finance target. This target, known as the New Collective Quantified Goal (NCQG), will replace the goal set in 2009, which committed developed countries to mobilize $100 billion per year from 2020 to 2025 to fund climate action in developing countries. The UNCTAD has proposed a floor of $500 billion in 2025, with a goal of raising $1.5 trillion annually by 2030. The Independent High-Level Expert Group on Climate Finance estimates that by 2030, developing countries could require between $200 billion and $400 billion annually to address loss and damage related to climate change.
In 2023, a significant milestone was reached when developed countries finally met the $100 billion target, which had been set to be achieved by 2020. However, this amount came two years late, and estimates suggest it still falls short of what is required. Climate finance remains a contentious issue, with many industrialized nations, particularly the U.S. and the EU, showing reluctance to fully honor their financial commitments. The historical responsibility for climate change lies with these wealthy nations, which have contributed the majority of greenhouse gas emissions since the Industrial Revolution.
The United States, for example, ranks first in cumulative carbon dioxide emissions, followed by the EU, Russia, and Japan. Despite this, there is political resistance in these countries to increase their climate finance contributions. In contrast, many emerging economies, such as China, have voluntarily contributed to climate finance, despite not being obliged to do so under the international climate regime. China's contributions, which often go overlooked, highlight the global South's growing role in climate finance.
An analysis by the London-based think tank ODI revealed that developing countries, including China and India, are already significant providers of climate finance. China is the 11th largest donor globally, contributing approximately $1.2 billion annually. When including bilateral finance, China’s total contribution rises to $2.6 billion, placing it as the seventh-largest provider of climate finance, ahead of Italy and Canada. A report by the World Resources Institute estimates that China’s climate finance provision averaged $4.5 billion per year from 2013 to 2022.
Between 2013 and 2021, China also emerged as a significant provider of climate finance through its Belt and Road Initiative, contributing an average of $3.8 billion per year to developing countries. This totals $34.3 billion, with $20.4 billion provided in the past five years alone. Meanwhile, the U.S. has committed to increasing its international climate finance contributions to over $11.4 billion annually by 2024. Early data from 2022 and 2023 shows promising growth in U.S. climate finance, reaching $5.8 billion in 2022 and $9.5 billion in 2023.
According to an ODI analysis, India contributed an impressive amount of $1.28 billion in climate finance through multilateral development banks (MDBs) in 2022, surpassing the contributions of several developed nations. As developing nations, China and India are not required to participate in NCQG. Thus, their contribution is surmounting pressure on some developed nations to expand the donor base for climate finance.
The U.S. bears a particularly large share of the historical responsibility for climate finance. According to ODI’s “fair share” report, based on historical emissions, income, and population size, the U.S. should be providing $43.5 billion annually, but in 2021, it contributed only $9.3 billion—just 21 percent of its fair share. For comparison, China, with 17% of the global population and 11% of cumulative emissions, provides $2.6 billion annually in climate finance, highlighting the discrepancy between the U.S. and other major economies.
The U.S. political situation adds to the complexity. After Donald Trump was elected President in 2016, the U.S. withdrew from the Paris Agreement, a key international treaty on climate change. Trump, a skeptic of climate change, has been re-elected and proposed cutting funding for green energy and increasing fossil fuel production. Although President Biden has rejoined the Paris Agreement and pledged to boost U.S. climate funding, the political climate remains unstable.
Despite these challenges, the momentum for climate action continues to grow. With or without the full participation of wealthier nations, developing countries are stepping up. China, in particular, is poised to play a critical role in filling the climate finance gap. As climate change is a global crisis, it requires a unified response, and there is every indication that the international community, including many developing countries, will continue pushing forward with the climate agenda. Climate action is no longer negotiable, and any retreat from this collective effort would unite other nations in ensuring that the Paris Agreement's objectives remain intact.
In conclusion, COP29 in Baku not only highlights the ongoing challenge of securing adequate climate finance but also marks a crucial turning point in the global fight against climate change. The battle to reverse anthropogenic climate change is not the responsibility of any single nation; it is a shared imperative that demands coordinated action from all corners of the world. While the onus remains on wealthier nations to fulfill their financial commitments, the leadership of emerging economies, including China, will be important in shaping the path forward. Those nations that fail to honor their pledges will inevitably be remembered as key contributors to the failure to avert climate catastrophe. As the world looks to Baku, all eyes are on whether the winds of change in this "wind-pounded city" can generate the momentum needed to drive meaningful progress at COP29.
