COP29, the latest annual climate summit, had one job: to strike a deal to provide the money needed to respond to climate change. It failed.

This was the first climate summit dedicated to finance. Global south countries estimate they need a combined US$1.3 trillion a year to transition to low-carbon economies and adapt to the impacts of climate change. But the last-minute offer made by global north states was for only US$300 billion a year.

The agreement leaves vague how much of the promised target, to be met by 2035, will be in the form of direct grants, as opposed to other means such as loans, and how much will come directly from states. As for the US$1 trillion annual funding gap, covering it remains an aspiration, with all potential sources encouraged to step up their efforts. The hope seems to be that the private sector will invest where it hasn’t already, and that innovations such as new levies and taxes will be explored, which many powerful states and industry lobbyists are sure to resist. The promised figure also doesn’t take account of inflation, which has been high in recent years, with soaring energy prices one of the causes, meaning that its real value will decline year on year.

Some global north states are talking up the deal, pointing out that it triples the previous target of US$100 billion a year, promised at COP15 in 2009 and officially reached in 2022, although how much was provided in reality remains a matter of debate. Some also say this deal is all they can afford, given economic and political constraints.

Global north states have long pushed for other relatively wealthy states to contribute. The 1992 Framework Convention on Climate Change, which established the annual summits that led to the Paris Agreement, classified countries as either developed or developing, a terminology still used today. But since 1992, countries such as China and India have made huge economic strides, becoming both major greenhouse gas emitters and renewable energy hubs, while petrostates such as Qatar, Saudi Arabia and the United Arab Emirates (UAE) have become wealthy and globally powerful by exploiting their oil and gas reserves. Some, like Saudi Arabia, resist any moves to reclassify them as donors

But global north states hardly engaged constructively, and can be accused of taking an approach that smacked of arrogance. They delayed making an offer for so long that the day before talks were due to end, the draft text of the agreement contained no numbers. Then they made a lowball offer of US$250 billion a year.

Many representatives from global south states took this as an insult. Talks threatened to collapse without an agreement. At one point two key groups of states – the Alliance of Small Island States and the Least Developed Countries – walked out of a finance meeting. Amid scenes of chaos and confusion, the summit’s president, Mukhtar Babayev of Azerbaijan, was accused of weakness and lack of leadership. By the time global north states offered US$300 billion, negotiations had gone past the deadline, and many saw this as essentially a take-it-or-leave it offer.

The negotiating style of global north states spoke of a fundamental inequality in climate change. Global north countries have historically contributed the bulk of cumulative greenhouse gas emissions due to their industrialisation. But it’s global south countries that are most affected by climate change impacts such as extreme weather and rising sea levels, which they’ve done little to cause. What’s more, they’re being asked to take a different development path to fossil fuel-powered industrialisation – but without adequate financial support to do so.

These evident injustices led some states, angered by Babayev bringing talks to an abrupt end, to believe that no deal would have been better than what was agreed. For others, waiting another year for COP30 would have been a luxury they couldn’t afford, given the ever-increasing impacts of climate change.

Regressive trends

A huge shadow loomed over the talks in the form of the impending second Trump presidency, awareness of which both encouraged the striking of some kind of agreement before he takes office but also worked against ambition, since no funding from the US government is to be expected. The USA is already the world’s largest historical emitter and fossil fuel producer. Now, Trump’s return means it’s likely to withdraw from the Paris Agreement, and investments in cleaner energy unlocked by Joe Biden’s Inflation Reduction Act will come to an end.

The impacts will be global. Other world leaders may be emboldened to follow Trump’s lead. In many countries, politics are shifting away from climate action just when it’s most needed. The year’s great election wave has seen right-wing populists and nationalists, who’re less committed to climate action, come to the fore, including in major European countries. Trump’s victory strengthens their hand.

These negative dynamics may already be playing out. Argentina’s far-right firebrand President Javier Milei, who closed the environment ministry shortly after coming to power, pulled his negotiators out of COP29 halfway through. He then became the first national leader to meet Trump since his re-election, raising concerns that Argentina might pull out of the Paris Agreement.

Self-interest to the fore

Little help came from the G20, the club of the world’s largest economies, which met in Brazil at the same time as COP29. Its leaders’ statement failed to mention the need to transition away from fossil fuels, which would have added weight to the efforts of those negotiating for ambitious commitments in Azerbaijan. Text to this effect was included in an earlier draft, but Saudi Arabia led the way in pushing for its removal.

Saudi Arabia also intervened to defend the lethal fossil fuel industry at COP29. Its delegation was accused of crossing the line by directly rewriting sections of the draft agreement. With US representatives subdued, the Saudi delegation was bolder in trying to resist any reference to fossil fuels in the agreement.

In a sign of the fossil fuel industry’s great lobbying power, it was only in the COP28 agreement that the need to transition away from fossil fuels was mentioned for the first time. That acknowledgement came as a result of a ‘global stocktake’ of progress towards the Paris Agreement. But COP29 went no further, with no new text on fossil fuels, and the follow-up to the global stocktake was kicked down the road to a meeting in Bonn, Germany, next year and then COP30 in Brazil.

Similar self-serving manoeuvring was seen throughout the summit, even when it came to helping women and girls disproportionately affected by climate change. Talks on extending the existing gender action plan stalled, with the theocratic microstate of the Vatican, which joined the Paris Agreement in 2022, working with a group of ultra-repressive states – Egypt, Iran, Russia and Saudi Arabia – to oppose references to ‘gender’. Their concern was that the plan could include trans and gay women. The final agreed text duly removed references to diversity and intersectionality.

World getting warmer

Delegates left Azerbaijan’s capital, Baku, without having achieved nearly enough. Meanwhile, the evidence of the price of inaction continues to mount. This year is on track to be the hottest on record, surpassing 2023, the previous hottest year. The key goal of the Paris Agreement was to keep global temperatures below a 1.5 degree rise on preindustrial levels, but now scientists say there’s no chance of that happening, and this year is likely to breach that limit.

The Climate Action Tracker, which assesses the likely impacts of current actions, policies and pledges on global warming, says that current policies will lead to a likely rise of 2.7 degrees. Even its optimistic scenario puts the world on track for a 1.9-degree rise.

Catastrophic consequences can be expected. The difference between a rise of 1.5 and 2 degrees is huge: more than twice as many people would be exposed to extreme heat, and impacts on crops and species loss would be twice as severe. Potential tipping points could be triggered, accelerating impacts. The consequences can be observed already. This year has seen an array of extreme weather events, from heatwaves and droughts to floods and storms, that scientists are increasingly clear are made more likely and more severe by climate change.

Change urgently needed

It’s clear the COP summits aren’t delivering – but writing them off might only make things worse. Powerful states enjoy access to multiple arenas they can use to shape the world, such as the G7 and G20, and authoritarian states have constructed alternatives like the BRICS group. But for smaller states, many of them islands on the frontlines of a climate crisis they have done the least to cause, COPs are the only regular and structured opportunity they have to remind the states responsible for most of the climate harm that they matter and have a right to a say.

But some things need to change. It isn’t just that Azerbaijan did a bad job in hosting and steering the summit. It’s a clear sign something is wrong that for the second year in a row, following the UAE in 2023, the world’s peak climate summit was hosted by a petrostate.

Azerbaijan is one of the world’s most fossil-fuel dependent economies, with the sector accounting for two-thirds of GDP and 90 per cent of export revenues. It’s planning a major expansion of gas extraction. President Ilham Aliyev calls its fossil fuels a ‘gift from God’, and one of the meeting’s key officials was filmed ahead of the summit talking up the prospects of new fossil fuel deals.

Azerbaijan also has closed civic space, meaning that it routinely and systematically suppresses people’s rights to organise, speak out and protest – fundamental freedoms civil society relies on. It cracked down further ahead of the summit, filling its jails with over 300 political prisoners, while its repression forced the closure of a civil society coalition that hoped to use for the event for advocacy. Meanwhile fake social media accounts were mobilised in advance to talk up Azerbaijan’s role as COP29 host and boost its messages.

This matters because civil society’s voices are the loudest ones calling for climate action. COPs should provide opportunities for civil society to engage with governments and push for ambitious agreements. This could help counter the enormous lobbying power of the fossil fuel industry, present in large numbers in Baku, with at least 1,773 lobbyists reportedly registered. But restricted civic space meant that protests were limited and subdued, with civil society participants concerned about potential surveillance. This was the third year running that a COP summit was held under conditions of closed civic space, preceded by Egypt and the UAE.

Calls for reform of the COP process to make summits more action-oriented and accountability-focused should be heard. COPs must no longer be hosted by petrostates or states with closed civic space. They shouldn’t be used as opportunities by host governments to burnish their international reputations: the focus must be on the hard business of negotiating climate solutions, which requires a host government that wants real climate action. Nor should they be flooded with fossil fuel representatives; instead the doors should be opened so civil society can bring in the voices of those living on the frontlines of climate catastrophe.

Financing on the agenda

Far from being settled, the conversation around climate financing should be regarded as only just having begun. The figures involved – whether it’s US$300 billion or US$1.3 trillion a year – seem huge, but in global terms they’re tiny. The US$1.3 trillion needed is less than one per cent of global GDP, which stands at around US$110 trillion. It’s a little more than the amount invested in fossil fuels this year, and far less than annual global military spending, which has risen for nine years running and now stands at around US$2.3 trillion a year.

If the money isn’t forthcoming, the sums needed will be eclipsed by the costs of cleaning up the disasters caused by climate change, and dealing with rising insecurity, conflict and economic disruption. For example, devastating floods in Valencia, Spain, in October caused at least 217 deaths and economic losses of around US$10.6 billion. Research suggests that each degree of warming would slash the world’s GDP by 12 per cent. Investing in a transition that reduces greenhouse gas emissions and enables communities to adapt isn’t just the right thing to do – it’s also the economically prudent option.

The same problems arose at another recent summit on a related issue – COP16 of the Biodiversity Convention, hosted by Colombia in October. This broke up with no agreement on how to meet the funding commitments agreed at its previous meeting. The international community, having forged agreements to address climate change and protect the environment, is stuck when it comes to finding the funding to realise them.

What’s largely missing is discussion of how wealth might be better shared for the benefit of humanity. Over the past decade, as the world has grown hotter, inequality has soared, with the world’s richest one per cent adding a further US$42 trillion to their fortunes – less than needed to adequately respond to climate change. The recent G20 meeting said little on climate change, but leaders at least agreed that ultra-wealthy people should be properly taxed. The battle should now be on to ensure this happens – and that revenues are used to tackle climate change.

When it comes to corporations, few are richer than the fossil fuel industry. But the ‘polluter pays’ principle – that those who cause environmental damage pay to clean it up – seems missing from climate negotiations. The fossil fuel industry is the single biggest contributor to climate change, responsible for over 75 per cent of greenhouse gas emissions. It’s grown incredibly rich thanks to its destructive trade. Over the past five decades, the oil and gas sector has made profits averaging US$2.8 billion a day. Only a small fraction of those revenues have ever been invested in alternatives, and oil and gas companies plan to extract more: since COP28, around US$250 billion has been committed to developing new oil and gas fields. The industry’s wealth that buys it huge lobbying power should also make it a natural target for paying to fix the mess it’s made. A proposed levy on extractions could raise US$900 billion by 2030.

Progress is needed, and fast. COP30 now has the huge task of compensating for the failings of COP29. Pressure must be kept up for adequate financing combined with concerted action to cut emissions. Next year, states are due to present their updated plans to cut emissions and adapt to climate change. Civil society will push for these to show the ambition needed – and for money to be mobilised at the scale required.

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