Climate, Finance and Justice: Insights from COP29
By Ana Paola De La Vega Núñez
Excitement, high expectations, and a touch of nervousness filled the air as we approached COP29. This year’s UN Climate Change Conference was dubbed the “Finance COP”, as parties to the United Nations Framework Convention on Climate Change (UNFCCC) were to negotiate the New Collective Quantified Goal (NCQG) for climate finance, a crucial element to keep the Paris Agreement within reach.
In preparation to COP29, I came across a timely research article from a scholar in Colorado University that explores the definition of climate finance justice. The article emphasizes that climate finance acknowledges how the global North benefited from rapid low-cost development fueled by fossil fuel combustion, and environmental degradation and extraction of regions, countries and entire communities. Today, these areas are facing the harshest impacts of climate change, often without the resources to adapt to this new reality. Yet, the article also reminds us that while climate finance can be a tool for distributive justice in global policy, it operates through market-oriented solutions and institutions that have the potential to reinforce capital accumulation and concentrate power among elites.
On the technical aspects, the NCQG is new because it was meant to build off lessons learned from the $100 billion annual target set in 2010 at COP16 in Cancun. Unlike this initial goal, the NCQG strived to better match the actual needs of developing countries. The collective in the NCQG was a big sticking point of this year’s negotiations. Developing countries were suggesting a burden-sharing system among developed nations, while countries in the global North— particularly the G7 and other European countries- were pushing to expand the contributors base as a pre-requisite for a more ambitious NCQG.
There are several others nuances around the NCQG – and climate finance in general- that need to be addressed, including the role that multilateral development banks and other international financing institutions will play in making climate finance accessible – in both technical capacity and financial terms. However crucial these details may be, we must keep the ultimate real goal in mind: to limit global temperature rise and enhance our ability to respond to and prepare for climate impacts worldwide. If the mechanisms employed for this task exacerbate injustices or perpetuate actions that worsen climate change, we all fail.
If you’re interested in my findings on climate finance, NCQG negotiations, and developments at COP29, keep reading!
November 10-16th in Baku, Azerbaijan
My first day at COP29 was thrilling. A bold message on the wall near the entrance set the tone of the entire event: “COP29: Mobilizing funds and enabling action to keep 1.5°C within reach”. Once in Baku Olympic Stadium, I found my way to the ceremonial opening of COP 29. In the queue, I ran into Sandra Guzmán, founder of the Climate Finance Group for Latin America and the Caribbean (GFLAC). As we chatted about this year’s pressing negotiations, she shared her perspective on the urgent need for structural transformation within the international financial system—a system built around the interests of its primary shareholders, the developed countries, leaving a gap from the perspective of developing nations. Soon after, I joined the audience to hear COP29 President Mukhtar Babayev call on parties to agree to “a fair, new, and ambitious NCQG, at the scale of the emergency and priorities of developing countries”.
Inspired by these statements, I attended a side event organized by the Green Climate Fund (GCF), the largest multilateral fund dedicated to climate. Mafalda Duarte, the GCF’s Executive Director, opened the session by highlighting a stark reality: under the current financial architecture, developing countries spend more on repaying debts to multilateral financial institutions than on climate action or even education. The Prime Minister of Tuvalu, a small island nation in Oceania, shared his country's urgent need to mobilize resources for climate adaptation. In contrast, the French ambassador underscored France’s active role in climate finance and called for more countries to increase both the quantity and quality of finance provided.
On Tuesday morning, I observed the discussions on a draft negotiating text for the NCQG. The G77 and China group proposed a target of $1.3 trillion USD per year by 2030 for climate action, to be mobilized from developed to developing countries. They emphasized that financial resources should remain operational, affordable, highly concessional, and free of conditionalities for developing countries. These arguments were widely echoed by several other countries and regions, many of whom also advocated for public finance—rather than private or market-based finance that further indebt developing countries—as the primary source of climate finance. As these principles were not reflected in the draft, the Arab Group declared that there would be no room for negotiation based on this text. The Environmental Integrity Group, represented by Switzerland, argued that starting from scratch would be a waste of time, as this text was the product of three years of work.
It would have been naïve to expect a finalized text in the first week of COP. International negotiations are complex and take time. But the impasse in these discussions left me concerned about the lack of urgency and the absence of concrete solutions. I kept thinking that, while agreeing on a quantum by the end of the two weeks would be a significant achievement, the details of its operability remain critical. With that in mind, I decided to focus on the “how” and attended an event organized by the Germany Pavilion on guarantees.
The use of guarantees has been limited thus far, but Brazil provided an example of success, where the country managed to avoid accruing additional debt while still leveraging sufficient capital to implement green transition projects. However, most developing countries not only aim to implement green transition projects but must also prioritize adaptation and loss and damage due to their heightened exposure and vulnerability to climate change. Despite this, significant challenges persist when it comes to financing these areas. Most climate financing instruments depend on some sort of return on investment, which makes it more difficult to attract funding for, for example, local nature-based solutions and disaster relief.
Some countries are innovating in financing loss and damage. For example, Bangladesh’s Community-led Initiatives for Climate Justice project, funded by the Climate Justice and Resilience Fund, directly provides funds to communities impacted and displaced by natural disasters. Yet the insufficient availability of dedicated public resources to adaptation and loss and damage remains a challenge for developing countries, particularly LDCs and SIDs.
After a whole week of engaging in high-level panels, attending technical discussions, and holding conversations with representatives of governments and international organizations, I realized justice was not a word I explicitly heard inside the rooms. Civil society-organized demonstrations during COP29 were a crucial reminder that these events do not exist in a vacuum. The scale of these gatherings reflects the growing concerns of people and nations who have contributed the least to the climate crisis but bear the greatest burden. Organized civil society, representing indigenous populations, labor unions, women’s and children’s rights groups, and environmental and social activists, made their voices heard at the heart of the venue through chants and signs reading “Pay up for climate finance,” “Phase out fossil fuels,” “Feminists demand climate justice,” and “No just transition without labor rights”. Indeed, the demand for climate finance justice is not only about ensuring the flow of funds; it’s about making sure the financial mechanisms in place help dismantle systemic inequalities and support the long-term resilience of communities already on the frontlines of climate change.
By the time I left Baku, the technical negotiations on the NCQG had concluded, and ministerial negotiations were set to begin in the second week, taking place behind closed doors for observers. While I hoped that countries reached an ambitious agreement on the NCQG by the end of COP, my greatest hope was that climate justice be reflected in the outcome. Only then can we begin to close the gap between the pledges and tangible impacts.
Those of us in the academic sector have a lot of work ahead of us to help answer the many questions around how to make climate action and climate finance just. Let’s take on the challenge and start driving the change that’s needed!
Ana Paola is a MS Environmental Policy and Planning student at the Urban and Environmental Policy and Planning Department, researching climate finance for adaptation.