The journey to COP29 in Baku, Azerbaijan, marked a critical moment in the global climate agenda focusing on climate finance. Over the past weeks, country representatives, negotiating groups, ministers, and civil society organizations secured their visas and documents, converging on what was billed as one of the largest multilateral climate meetings under the United Nations Framework Convention on Climate Change (UNFCCC).

Anticipation was high, with many hoping that this “finance COP” would deliver a groundbreaking climate finance goal as envisioned in the New Collective Quantified Goal (NCQG). Yet, as the negotiations unfolded, long-standing challenges and disagreements threatened to derail the process, exposing the complexity of achieving consensus between developed and developing nations.

Efforts to advance the NCQG began well before COP29, with 11 Technical Expert Dialogues (TEDs) and three meetings under the Ad Hoc Work Program (MAHWP). These sessions were designed to draft a negotiating text that could guide discussions in Baku.

However, progress was slow with key issues such as the total amount of financing, the mix between grants and loans, and the question of which countries should contribute remained unresolved, leaving ministers to take up the task of breaking the deadlock. Two high-level meetings were convened for this purpose: an informal dialogue on the margins of the United Nations General Assembly in New York on September 27, and a formal High-Level Ministerial Dialogue in Baku on October 9.

Despite the urgency of the task, these meetings were a testament to the deep divisions between developed and developing nations. While developed countries focused on expanding the pool of contributors and mobilizing private finance, developing nations emphasized the need for a public finance framework rooted in the principles of equity and Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC).

For many developing countries, this principle is vital, given their disproportionate vulnerability to the impacts of climate change. They argued that the push for private finance not only risks shifting the burden to them but also threatens to increase debt levels, an issue incessantly highlighted by African negotiators who insist that climate finance should take the form of concessional funding or grants.

As emphasized by UN Secretary-General Antonio Guterres it is time for all countries at the COP29 climate conference to step up, pick up the pace, and deliver since the time for climate action is urgent. Adding that the rewards are great for climate financing and importantly note that time is short.

The dialogue also brought into sharp focus the inadequacy of private finance in addressing critical areas such as adaptation, Loss and Damage, and the equitable transition away from fossil fuels. Developing countries viewed these omissions as a failure to recognize their unique challenges and as an attempt by developed nations to sidestep historical responsibilities. The resulting mistrust only deepened the impasse.

According to Guterres, to achieve a climate finance goal the negotiators and ministers at the COP29 climate conference have to soften hard lines and navigate a path through their differences. “Keep your eyes on the bigger picture. Never forget that the future of humanity is at stake,” he said.

While ministers agreed on the need to scale up climate finance, they were unable to provide the political leadership required to significantly advance the draft NCQG text. Critical issues, such as the structure of the framework and the operationalization of Loss and Damage, remained unresolved, leaving negotiators with an even heavier burden at COP29.

As the world watches, the stakes at COP29 could not be higher. Delivering a climate finance goal that upholds justice and equity while addressing the urgent needs of vulnerable nations is essential. Yet, with key hurdles still in place, the path to a meaningful consensus remains fraught with challenges. It is apparent that without bold compromises and decisive action, the vision of a fair and ambitious climate finance framework risks being deferred yet again.

“We need a major push to get discussions at the climate conference in Baku over the finishing line. ‌ We need to deliver an ambitious and balanced package on all pending issues, with a new finance goal at its heart. ‌ A surge in climate finance is essential,” emphasized Guterres.