Hard climate talks ahead in Baku in bid to secure global funding

Ahead of difficult global talks on how to fund climate action, Malta has told the European Council to ensure countries can benefit from measures that allow them to better adapt to the impact of climate change.

At a meeting of EU environment ministers in Luxembourg, minister Miriam Dalli called for financing to support small and most vulnerable countries, through the use of green bonds that could raise the required capital for environmental projects.

The jury is still out on whether countries could reach a deal at next month’s United Nations summit in Baku, Azerbaijan.

Key negotiator Eamon Ryan, the Irish environment minister, has said his colleagues in the Council probably see this as the most difficult negotiation since Paris 2015.

In Baku, countries are meant to set a new long-term financial target to fund climate action in developing countries.

The current target of $100 billion a year is widely considered insufficient, and some developing nations are asking for that number to increase to $1 trillion or more.

Industrialized countries, including the EU, say additional funding is contingent on expanding the group of contributors to emerging economies such as China.

The EU has agreed on a common position, allowing them to negotiate collectively with the rest of the international community during the COP29 climate change conference.

“We must keep in mind the level of ambition required globally to ensure that temperatures do not rise beyond 1.5°C,” Miriam Dalli said.

“At the same time, Malta must see a transition that is fair and inclusive. This transition should not leave any country behind, no matter how small. Therefore, social, and economic aspects must remain a priority.”

Dalli insisted that energy prices must be addressed to avoid placing undue burden on consumers.

She also called for mitigation measures due to onerous European directives and legislation. “We must ensure that we have effective adaptation measures… climate change is a global challenge that affects economies, the environment, and communities, making both adaptation and mitigation essential.

“The most affected countries, particularly small islands, are implementing adaptation measures, but collective action is needed in this regard, along with direct financing support, to minimise the impact of climate change as much as possible.”

Dalli said Malta’s position had been included in the conclusions the EU will present as a common position during the COP29 discussions.

EU position

Eamon Ryan told Politico.eu that there was a “real risk” of failure at Baku.

“It’s not certain we will get agreement in Baku. It’s not an easy issue when you come down to discussing the financial future and … multilateral cooperation is not exactly the flavour of the month at the moment. So there’s a real risk we might not get agreement.”

One option is to convince China, which provides its own version of ‘South-South’ climate finance to lay out exactly the amount and conditions of the funding they provide. 

“Increased traceability and reporting may be one of the ways in which we address” the issue of contributors, he said, “because then you start to understand what’s actually happening in South-South investment and development.” 

The EU is also advocating for a “multi-layered” funding goal at COP29, encompassing a target for public finance complemented by funds raised from the private sector, development banks and other sources.

The Council will reiterate its position to keep a global 1.5°C temperature goal within reach, as well as a new collective quantified goal (NCQG) on climate finance which reflects economic growth and the increasing share of global greenhouse gas emissions since the early 1990s.

The EU will say that public finance alone cannot deliver the levels of finance needed to achieve a climate-neutral and resilient global economy, and that private investment must provide the largest share of the required investment in the green transition.

Every year, the Conference of the Parties (COP) to the UN Framework Convention on Climate Change (UNFCCC) meets to determine climate ambition and responsibilities, and identify and assess climate measures. Last year’s COP28 marked the conclusion of the first global stocktake of the world’s efforts to address climate change under the Paris Agreement and to keep the global temperature limit of 1.5°C within reach.