Funding a resilient future: What needs to happen at COP29

World leaders and negotiators are soon set to gather in Baku, Azerbaijan for the 29th Conference of the Parties of the UNFCCC (COP29), where critical decisions - especially on climate finance - are on the agenda. The Alliance will be there to push for bold decisions that address the needs of the most vulnerable communities and meet the urgency of the climate crisis.

The last few weeks alone have seen catastrophic floodings in the United States and Spain, devastating fires in the Amazon, and torrential rains displacing millions of people in South Asia. Climate change is not a future concern but a current reality - 2024 is expected to be the hottest year on record for the second year in a row.

'COP29 must be the stand-and-deliver COP, recognizing that climate finance is core business to save the global economy and billions of lives and livelihoods from rampaging climate impacts' urged UNFCCC Executive Secretary Simon Stiell recently.

Decision time on climate finance

After three years of negotiations, now is the time to agree a fit-for-purpose goal on climate finance - the New Collective Quantified Goal (NCQG) to replace the $100 billion goal agreed in 2009. This is literally a once-in-a-decade opportunity to drive systemic change in climate finance, as what is agreed will inform climate action - or inaction - for years to come.

To this end, the Alliance has set out key principles and asks to ensure the NCQG is robust, and truly delivers for developing countries.

1. The goal must agree a quantum of at least $1 trillion annually in public grant-based funding.

To have any hope of 'keeping 1.5 alive' and preventing climate catastrophe, climate action must radically scale up in the next decade - this can only be done through a quantum in the trillions to address mitigation, adaptation and loss and damage (L&D), aligning with the evolving needs of developing countries.

2. The funding should be primarily grants

Loans currently make up the lion's share of all international public climate finance (69%), entrenching existing inequalities and exacerbating debt crises in climate-vulnerable countries. Debt-inducing and return-seeking finance is inappropriate and unethical for adaptation, L&D, and for less developed countries - where the business model is unclear, untested or non-existent.

3. Innovative sources of finance are needed 

To reach the trillions needed, polluters and profiteers must be held accountable for funding climate action rather than placing the burden on vulnerable communities that did not cause the climate crisis. Developed countries should introduce their own domestic policies now to create fiscal space and build the momentum for international agreements on innovative sources of finance.

4. Those most responsible for climate change, and who are most able to pay, must do most to stop it.

Climate finance is not about charity nor generosity; it is about responsibility and justice, and it is an agreed legal obligation of developed countries. Developed countries, bearing the greatest historical responsibility for climate change, must provide finance and agree an equitable burden-sharing mechanism (see infographic below).

5. NCQG funding should be accessible to vulnerable communities

The effectiveness of climate finance hinges on its accessibility by communities who need it. Current climate finance access mechanisms are slow (it takes on average over 1,100 days to get Green Climate Fund funding), complex, resource intensive, and highly uncertain - this has to change.

6. NCQG funding should support gender equality and human rights

The NCQG must operationalise human rights principles and incentivize climate finance providers to prioritize gender equality objectives. Climate change affects people differently - climate finance must be structured to reduce not deepen these inequalities.

After stalled progress, adaptation cannot be sidelined at COP29

COP29 must deliver stronger political commitment, action and funding to address the adaptation gap, currently estimated to be between $194-366 billion per year.

Adaptation is consistently sidelined and under-resourced, with 60% of international climate finance for mitigation. To rebalance funding in relation to needs, the NCQG should have thematic sub-goals, set in grant equivalent terms, for mitigation, adaptation and L&D.

This funding is necessary for developing and implementing robust National Adaptation Plans (NAPs). At COP29, the decision on NAPs should acknowledge both the progress made by countries on adaptation so far and address the need for financial and technical support for developing countries to create and update their NAPs in 2025.

COP this year will also need to make progress on indicators for the Global Goal on Adaptation (GGA). Amongst other things, this should include indicators for the means of implementation (financial support, capacity building and technology transfer) that are essential to transforming adaptation targets into reality.

COP29 must maintain momentum on Loss and Damage

As the third pillar of climate action - alongside mitigation and adaptation - L&D must be included as a dedicated sub-goal under the NCQG. The Fund established at COP28 is simply a channel; it is critical for the NCQG to include L&D so the Fund does not become an empty shell, negating the gains made last year in Dubai.

As the Fund continues to be operationalized, the Alliance calls for new pledges in the billions of dollars to support vulnerable communities. Parties should also address the need for improved information on L&D, by requesting an annual L&D Gap Report.

Conclusion

Agreeing an NCQG that is fit-for-purpose will not be easy, but we look to our political leaders to choose to be on the right side of history, reflecting the extraordinary need to find the resources to address the climate crisis in this pivotal decade. Countries must come together to agree an NCQG that is as monumental as the challenges we face. Only by securing sufficient and equitable climate finance can we build a resilient future for all. The world is watching; COP29 must deliver.