COP29 Finance Deal Maintains Fragile Promise for Resource-Rich Countries
New climate finance goal no upgrade but preserves options for funded just energy transitions for oil and gas producers in Global South
BAKU, Azerbaijan — The COP29 UN climate conference result maintains the weak promise of international financial support for the transition away from fossil fuels in low-and middle-income oil and gas producers, according to experts at the Natural Resource Governance Institute (NRGI).
Low- and middle-income countries are most affected by climate change, and least responsible for causing it. They also face the greatest challenges when transitioning away from fossil fuel dependence. When countries came together to adopt the Paris Agreement in 2015, they also decided to set a new collective, quantified goal (NCQG) for climate finance before 2025. The main purpose of COP29 has been to secure an upgraded commitment by rich countries to help countries in the global South to recover from and adapt to climate change impacts and boost their own just energy transitions.
“The COP29 outcome leaves much to be desired and there is a very hard road ahead, but it maintains a glimmer of a pathway for low- and middle-income countries to join the global transition away from fossil fuels with financial support,” said Suneeta Kaimal, president and CEO of NRGI. “Some oil-producing countries, such as Mexico, Colombia, Indonesia and Brazil, announced meaningful new energy transition commitments. However, their path and that of other resource-rich countries remains extremely tenuous until higher-income countries deliver their fair share of funds to the Global South in grants, not loans. It’s in everyone’s interest – including their own – for the G7 and other wealthy countries to promote equity and justice and quickly fund a just energy transition.”
Beyond the headline figure USD 300 billion per year reflected in the new finance goal agreed in Baku, the agreement does little to advance the quality of finance that will be counted toward fulfilment of the goal.
“Non-debt instruments are critical for energy transition finance in African countries,” said Denis Gyeyir, NRGI Africa senior program officer. “Most African countries suffer a crushing debt service burden that constrains fiscal space. The lack of emphasis on grant-based financing in the COP29 finance decision is outrageous, and a just and equitable global transition requires that the G7 and other wealthy countries remedy this as they meet their commitments.”
In the context of the Paris Agreement, countries have set themselves a 10 February 2025 deadline for submitting updated national climate pledges (nationally determined contributions, or NDCs) to global climate action.
“Mexico has re-entered the climate action arena with a new pledge: the goal of achieving net zero emissions by 2050 and explaining how it will get there in its NDC next year,” said Fernanda Ballesteros, NRGI Mexico country manager. “However, the new government's climate balance sheet will remain insufficient if Mexico’s state oil company Pemex, one of the world’s largest methane polluters, is not a central part of Mexico’s climate commitments, specifically of its NDC.”
For more information:
Gabriela Flores, +44 7931 924 934, [email protected]
Lee Bailey, +44 7447 560 488, [email protected]