COP29 produces streamlined climate finance draft, but key issues remain

 After an all-nighter, a draft text on the new climate finance package for the developing world dropped Thursday morning -- shrunk from 25 pages to 10, but the major sticking points remain.

A quick glance at the text shows developed countries are still dodging a key question: How much climate finance are they ready to give developing countries every year starting in 2025?

This has led to significant frustration among developing countries, who have repeatedly said they need at least USD 1.3 trillion to tackle the escalating challenges. With less than two days left for the UN climate conference to close, negotiators face a gargantuan task to hammer out a deal.

"The revised draft text, while more streamlined, presents a spectrum of options -- some good, some bad, and some outright ugly," said Harjeet Singh, a climate activist and Global Engagement Director for the Fossil Fuel Non-Proliferation Treaty Initiative.

He said it acknowledges the need for public funds from developed countries but dodges the key question of how much finance is needed, shifting the burden onto developing countries to raise more domestic funds.

The veteran COP watcher also said the text fails to set clear financial targets for mitigation, adaptation, and losses and damages from climate impacts -- areas with growing needs and limited resources. "A real, just transition from fossil fuels requires strong public finance, not empty promises," Singh said.

Vaibhav Chaturvedi from Delhi-based think tank Council on Energy, Environment and Water said it is great that the structure is streamlined, but there is no high-level number from the developed world.

David Waskow, the Director of WRI's International Climate Initiative, said the text leaves a lot of work to be done.

"Time is very tight, and to get to bridging texts, even bridging texts with options, is going to take quite a lot of work, and the presidency and the ministerial pair and parties above all, are going to need to really work hard over the next 48 to 72 hours to reach a conclusion," he said.

The draft text presents two views on the goal -- one from developing countries and another from developed countries.

The view of developing countries in the text is that trillions of dollars should be provided by developed countries every year from 2025 to 2035. Of these trillions, developed countries should contribute billions in grants or grant-equivalent terms (public funding), and the private finance mobilized to meet the goal should not create debt.

They say that developing countries willing to support other developing countries should do so voluntarily. This voluntary support will not be included in the climate finance package.

They also suggest setting up burden-sharing arrangements to determine how much each developed country will contribute, based on historical emissions and GDP per capita.

The second option, reflecting developed countries' perspective, presents two positions: one is that global climate finance will reach a trillion-dollar figure per year by 2035, though still unspecified, with the funds coming from all sources.

This option doesn't factor in Article 9 of the Paris Agreement, which mandates developed nations to provide financial support. This means asking some wealthier, high-emitting developing nations to contribute to climate finance.

Their second view factors in Article 9 and calls for a goal that collectively mobilises an amount greater than USD 100 billion per annum by 2035 for developing countries from a wide range of sources and instruments, including public and private.

On the question of who will receive climate finance support, the text mentions it will be exclusively for all developing countries. However, there is no agreement yet on specific amounts for least developed countries and small island states.

Rob Moore, associate director at international climate policy think tank E3G, said the absence of a clear proposal or numbers means negotiators have a lot of work ahead in the next day or two.

"The road to agreement will need to see rapid and candid engagement, with numbers on the table," he said.

The new climate finance package to help developing nations cut emissions and adapt to the worsening impacts of climate change is at the heart of the talks.

The developing world argues it needs at least USD 1.3 trillion annually -- 13 times the USD 100 billion pledged in 2009 -- to meet the growing challenges.

Trust remains thin as rich nations met the USD 100 billion goal two years later in 2022, with around 70 per cent of the funds provided as loans -- adding to the debt burdens of countries already reeling from climate disasters.

Developing nations are pushing for funding to come directly from developed countries' public budgets. They reject the heavy reliance on private-sector contributions, which they say prioritise profit over accountability.

But the developed world, led by the EU and the US, wants a broader global goal that taps into public, private, domestic, and international sources.

They are also calling on wealthier nations like China and Gulf states -- classified as developing in 1992 -- to contribute, citing their changed economic status.

Developing countries see it as an attempt to dodge responsibility for historical emissions by shifting the burden to those who industrialised more recently.