COP29 agreement passed amid contention over climate funding

New Delhi, Nov 24: The 29th Conference of the Parties or COP29 to the UN Framework Convention on Climate Change (UNFCCC) concluded in Baku, Azerbaijan, with the adoption of an agreement that pledges $300 billion annually in climate finance to developing nations until 2035.

The deal despite criticism and discussions is an important step in global climate negotiations. It however was far from a complete satisfactory moment for India and other developing countries.

India continues to remain a strong advocate for equitable climate finance, expressing deep dissatisfaction, calling the pledge an "optical illusion" that fails to address the massive challenge of tackling climate change.

Chandni Raina, India’s representative at COP29, objected to the agreement, describing the financial commitment reported by Reuters as "abysmally poor" and accusing wealthier nations of deflecting their responsibilities.

"This document does not uphold the principles of equity enshrined in the Paris Agreement," she said, echoing a broader sentiment of frustration among developing nations that have long demanded substantial financial support to transition to low-carbon economies and build resilience against climate impacts.

While the deal concluded in Baku, Azerbaijan, in the early hours of Sunday, it marked some progress compared to previous commitments, however, it fell extremely short of the $1.3 trillion demanded by developing nations.

The response from India, a key voice for the Global South, was swift. The delegation labelled the agreement an “optical illusion,” accusing wealthier nations of neglecting their responsibilities under the Paris Agreement.

The divide between developed and developing countries was visible throughout the conference. Negotiations were flawed by disagreements over financial commitments. At times, in the conference, some of the most climate-vulnerable nations threatened to walk out. In the end, a deal was reached, but not without considerable dissatisfaction.

One of the key achievements of this conference was the adoption of Article 6 of the Paris Agreement, which establishes a global carbon market to trade carbon credits. However, this progress was overshadowed by the inadequacy of financial commitments, a central sticking point for countries like India.

“This document is nothing more than an optical illusion,” said Chandni Raina, India’s chief negotiator, during the plenary session. “It does not address the enormity of the challenge we all face and fails to uphold the principles of equity enshrined in the Paris Agreement.” Her remarks were met with applause from civil society groups, underscoring the widespread frustration among Global South representatives.

Over the two-week summit, India consistently advocated for a shift from mitigation-focused discussions to concrete financial enablement.

Leena Nandan, Deputy Leader of the Indian delegation, in her address earlier, highlighted the imbalance in the talks. “COP after COP, we keep talking about mitigation ambitions—what needs to be done—without addressing how it is to be done. Adequate financial support is the enabler for these actions,” she insisted.

The adopted agreement pledged $300 billion annually by 2035, a modest increase from the previous $250 billion offer. According to the document this amount included both public and private sources, raising concerns about reliance on loans, which developing nations fear will aggravate existing debt burdens.

“Climate finance, as it stands in this agreement, extinguishes the spirit of international cooperation,” Raina added. “We are moving from an era of ‘leave no one behind’ to one of ‘every man for himself.’”

The $1.3 Trillion Demand

Developing countries, throughout the conference led by the Like-Minded Developing Countries (LMDCs) group, had called for $1.3 trillion annually to address the dual challenges of mitigation and adaptation. This figure, supported by a UN-backed report, reflects the scale of resources needed to transition to low-carbon economies, build climate resilience, and address loss and damage.

However, the final agreement treated this figure as an aspirational goal, with weak language and no binding commitments.

India is worried that the insufficiency of the financial package would influence its future climate pledges under the Paris Agreement. “The decisions on climate finance here will directly shape what actions we can pledge next year,” Nandan warned, highlighting the interconnectedness of financial support and mitigation ambition.

One big or main achievement of COP29 was the adoption of Article 6 which paves the way for a global carbon market to incentivize emissions reductions and investment in green projects by allowing countries to trade carbon credits.

However, for India and other developing nations, the benefits of this system were overshadowed by the lack of concrete financial support. While the global carbon market holds promise, its implementation will depend on the financial mechanisms that ensure participation from all countries.

India’s objections also reflected broader concerns about the erosion of the Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC) principle, a cornerstone of international climate negotiations. This principle acknowledges the historical responsibility of developed nations for climate change and their obligation to lead in providing financial and technological support.

“The attempt by some parties to shift focus from finance to mitigation is a deflection of their responsibilities,” Nandan asserted. “We need a balance in the climate discourse. Without adequate financial support, mitigation ambitions remain mere rhetoric.”

India which throughout the COp29, stood strong on its position and was supported by several other developing nations, who argued that the agreement disproportionately shifted the burden of climate action onto the Global South.

While the $300 billion annual commitment marks progress from the $100 billion goal set in 2009, it is widely seen as insufficient to address the growing needs of vulnerable nations. Climate analysts have criticised the deal for its overreliance on private sector financing and loans, which are unlikely to provide the scale of resources needed without growing economic inequalities.

As COP29 drew to a close after much debate, discussions and even an extension of time, it became clear that the agreement was less a victory and more a starting point. For India and other Global South nations, the deal highlights the persistent challenges in ensuring climate justice.