Developed countries need to scale up their climate finance commitments to enable developing countries to transition and adapt to climate change. Developing countries need to meet them halfway by being more ambitious about mitigation targets.
The United Nations Climate Summit (COP29) in Baku, Azerbaijan touted as the “Climate Finance COP”, proved to be an underwhelming experience for most countries, as it failed to deliver any ambitious commitments. Global South countries lamented the distressingly low amount of climate finance commitments, with very little progress made on improving the quality and quantity of finance provided, while Global North countries found the lack of ambitious commitments to climate mitigation disheartening. Against this backdrop, this essay will discuss India’s stance on key agenda items, and place it within the larger debates surrounding climate finance and mitigation.
Throughout the conference, India, as part of the Like-Minded Developing Countries (LMDCs) bloc pushed for higher climate finance commitments from Global North countries. India on behalf of the LMDCs proposed the quantum of climate finance to be $1.3 trillion every year until 2035. Additionally, they underscored the need for the climate finance goal to include a core grant component (amounting to around $600 billion), along with providing highly concessional loans so as to not add to the debt burden of developing countries.
The initial climate finance goal of $100 billion, to be provided by developed countries to developing countries every year until 2020, was agreed at COP15 in 2009. However, developed countries consistently failed to reach the goal, and at COP21 in Paris, this goal was reiterated and extended till 2025. According to the official estimates by the Organisation for Economic Development (OECD), this goal was reached for the first time only in 2022. However, most of this finance has been in the form of loans and involves re-channelling/ re-labelling of pre-existing developmental aid as climate finance. The Climate Finance COP was supposed to provide new and additional climate finance to developing countries, which developed countries failed to do at the scale required.
New Collective Quantified Goal
At COP29, a New Collective Quantified Goal (NCQG) was to be agreed, which would replace the figure of $100 billion. There were several contentious issues within the agenda item of the NCQG. The developed countries supposed to provide climate finance include the US, Germany, Japan, Canada, and the UK, among others. These countries wanted the climate finance goal to include all sources of finance including investments. Additionally, they also wanted to expand the contributor pool to the climate finance goal to include high emitters such as China and Arab nations, a move criticised by India and other developing countries. India underscored at several events that the climate finance goal is not an investment goal, and that the core principle of the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement is that of Common But Differentiated Responsibility (CBDR). Therefore, they argued that climate finance should be largely grant-based and concessional.
India’s narrative encourages a view of climate finance as reparations by developed countries for the greenhouse gas (GHG)-intensive development they historically undertook, which has caused the climate crisis, the worst impacts of which are felt in developing countries.
Other developing countries had similar demands regarding the concessional, grant-based nature of climate finance. Building on their experience of receiving climate finance under the initial goal of $100 billion, developing country parties focused a lot more this time around on the quality of climate finance being provided and accountability mechanisms for developed countries. All developing countries collectively agreed on the quantum of climate finance to be at $1.3 trillion. Within this goal, the Small Island Developing States (SIDS) and Least Developed Countries (LDCs) wanted $39 billion and $220 billion a year to be earmarked for them. However, the Group of 77 (G77, including India) and China criticised this demand, and believe that all developing countries should have equal rights to the finance being provided. The demand by SIDs and LDCs comes in light of the experience from the last goal, where bigger economies with higher growth rates such as China, India, and Brazil received the largest chunk of climate finance. Since most of this finance is in the form of investment into key mitigation sectors such as energy and transport, it has been dominated by larger economies, which provide higher returns on investment.
Ticking clock: Stage managing an outcome
The quantum of NCQG was not finalised in the draft texts until the very end of the conference. The initial figure proposed by developed countries was $250 billion, which received widespread criticism from civil society actors and countries. The Alliance of Small Island Developing States (AOSIS) and several other developing countries walked out of the negotiating rooms as a show of disapproval while all developing countries rallied behind the $1.3 trillion demand. Additionally, India and LMDCs tried to negotiate throughout the last hours of COP to increase the quantum of climate finance being provided, and for the NCQG to include a core grant component. Eventually, the NCQG was agreed at $300 billion as COP29 ran into overtime.
During the closing plenary of COP29, India’s fiery intervention received support from several other developing country parties and civil society. India rejected in no uncertain terms both the quantum of climate finance and the way in which the adoption of the NCGQ had been “stage-managed”. India expressed concern about how developing countries had been sidelined and the final text was simply rushed through. India in its statement said that they had told the Presidency that they wanted to make a statement prior to the adoption of the NCQG, however, they were only allowed to do so after the gavel went down. They rejected the NCGQ saying the amount is too little, and will severely impact the scale of action developing countries can undertake. India also specifically criticised Sections 8(a), 8(c) and 9 of the text which laid out the sources of climate finance to include “a wide variety of sources, public and private, bilateral and multilateral” and counted climate finance provided by Multilateral Development Banks (MDBs) under its ambit. India pointed out that counting outflows from MDBs did not encourage any new financing by the developed countries and instead deflected responsibility onto developing country shareholders of the MDBs. For example, India provided $1.287 billion in climate finance to other developing countries through MDBs in 2022. This amount was higher than what several other developed countries had provided in climate finance to developing countries; Greece provided $0.23 billion, Portugal $ 0.23 billion, Ireland $ 0.3 billion and New Zealand $ 0.27 billion over the same period.
Matters relating to mitigation
While developing countries rallied for higher climate finance targets throughout the conference, developed countries pushed Parties to have higher mitigation targets. Under the Sharm-el-Sheikh Mitigation Ambition and Implementation Work Programme (MWP), there was yet again a clear divide between countries. The developed countries, along with AOSIS and LDCs wanted strong outcomes out of the Mitigation Work Programme, including creating linkages with the Global Stocktake, using the MWP to inform the NDCs (national climate pledges) and overall more ambitious mitigation commitments.
The LMDCs, the Arab Group and the African Group believed developed countries were attempting to change the scope of the MWP and introduce new, prescriptive, top-down mitigation targets, which they didn’t agree with. Developing country parties rejected several paragraphs of the informal note shared by the co-facilitators. For example, a paragraph on the phase-out of coal, fossil fuel subsidies and the transition to renewable energy was found to be highly controversial. India urged Parties to contextualise the debate in the backdrop of limited mitigation efforts by developed countries pre-2020, which has now led to developing countries being forced to aggressively scale up their mitigation efforts. Herein, they again emphasised the need for ambitious climate finance to complement mitigation efforts in developing countries and welcome investment-focused events and dialogue.
The strong disagreements paved the way for Rule 16, where discussions on a particular agenda item are inconclusive and are pushed off to the next meeting of the Subsidiary Bodies (SBs) in Bonn, in this case, in June 2025. However, the Presidency decided to revive the agenda item underlining the importance of having enhanced ambition on mitigation targets at COP29. The final text was an extremely watered-down version of the note originally shared and had no mentions of linking the MWP to the Global Stocktake or any mention of the phase-out of fossil fuels.
The Global Stocktake is a feature of the Paris Agreement, which allows periodic review (every five years) of the progress made by countries on their commitments in three key areas: Mitigation, adaptation and climate finance. COP28 saw the conclusion of the first Global Stocktake and the first-ever mention of “transitioning away from fossil fuels”. The Global Stocktake also had a list of other actions meant to inform the new NDCs countries to submit before February 2025. India as part of LMDCs and the Arab Group opposing linking the Global Stocktake to the MWP and more ambitious mitigation targets is worrisome, especially in the face of rising temperatures and the growing threat of extreme climatic events.
The way forward
While developed countries need to seriously scale up their climate finance commitments to enable developing countries to transition and adapt to climate change, developing countries need to meet them halfway by being more ambitious about mitigation targets. It is important to remember that ramping up mitigation efforts would accrue the most benefits in developing countries.
COP29, like all COPs, was a long-drawn fight between various countries to secure a more sustainable collective future, while keeping to their individual interests. India, over the years, has bolstered its impact on the conference. This year, its bold intervention on the procedural and substantive elements of the new climate finance goal received praise from across country delegations and civil society. India took centre stage in articulating the demands of developing country parties. While India has made remarkable strides in scaling up its solar energy, similar efforts need to be made to phase down coal. Several reports have shown that India does not need to open new coal infrastructure to meet its current and future demand, but continues to do so. India taking the lead on reducing its coal dependency can also encourage other developing countries to do the same. COP30 in Brazil will hopefully pave the way for more ambitious climate finance and action from all countries, across the North-South divide, including India.
