As the UN Climate Conference (COP29) in Baku approaches, a major conflict is brewing over who will pay for the escalating climate crisis. At the center of the debate is a new financial target, the New Collective Quantitative Goal (NCQG), designed to help developing nations after 2025. The intense disagreement between wealthy nations and the developing world casts a shadow of uncertainty over the crucial talks, threatening to derail progress on global climate action.
A Deep Divide on Who Should Pay
The European Union has taken a firm stance, officially calling for a wider group of countries to contribute to the new climate fund. On October 14, the Council of the EU released its position, naming nations like China, the UAE, Saudi Arabia, and India as potential new donors.
The EU’s argument is based on the significant economic growth and increased greenhouse gas emissions from these countries since the 1990s. The bloc is pushing for an “ambitious and balanced” outcome in Baku, aiming to keep the 1.5 degrees Celsius warming limit within reach.
Meanwhile, the United States has adopted an even tougher position. The U.S., one of the largest historical emitters, has not committed to any specific financial target for the NCQG. Instead, it maintains that any contributions should be voluntary and not legally binding. This stance could create a major roadblock in negotiations, especially with the U.S. presidential election happening at the same time as COP29.
The Global South’s Push for Historical Justice
Developing nations are strongly pushing back against the idea of expanding the contributor base without first addressing historical responsibility. They argue that wealthy countries built their economies on over a century of fossil fuel use, which is the primary cause of the climate crisis today.
Harjeet Singh, a prominent climate activist, captured this sentiment perfectly. “Wealthy nations, whose prosperity was built on over 150 years of fossil-fuelled industrialization, cannot simply start counting the emissions from the 1990s. They bear a historical responsibility for driving climate change, and it’s time they acknowledge that debt.”
This view is widely shared across the Global South. Economists advising countries like India have highlighted several key points that need to be addressed in the lead-up to Baku:
- The urgent need to factor in historical responsibility for emissions.
- The importance of developing a fair method for distributing the remaining global carbon budget.
- The challenge of pressuring wealthy nations to significantly increase their climate finance contributions.
Beyond Finance: The Battle Over Coal
The disagreements extend beyond just money. Another major point of contention is the push to phase out coal. The EU’s negotiating documents call for the global energy sector to be predominantly free of fossil fuels well before 2050 and fully decarbonized by the 2030s.
For developing countries like India, which depend heavily on coal for energy and economic stability, this aggressive timeline is a significant challenge. These nations argue that while they are committed to a green transition, they need financial support and flexibility to move away from coal without harming their economies. This tension is expected to be a major sticking point during the negotiations.
Key Priorities and What’s at Stake in Baku
As the talks loom, there is also a growing call for greater transparency and accountability in how climate finance is reported and used. The EU has stressed that all contributors must be clear about the funds they provide to build trust and improve coordination. The main priorities for the finance negotiations at COP29 are clear.
| Priority | Details |
| Expanded List of Contributors | Pressure on China, India, UAE, and Saudi Arabia to contribute |
| Climate Finance Transparency | Ensure all contributors report the amount of finance provided |
| Phase-Out of Coal | Push for a coal-free energy sector well ahead of 2050 |
| Addressing Historical Responsibility | Wealthy nations face calls to acknowledge their role in climate change |
The stakes for COP29 are incredibly high. The conference could determine whether the world can collectively finance the actions needed to prevent a climate catastrophe. As Bolivian lead negotiator Diego Pacheco stated, “The emphasis must be on the quantum of finance required, rather than the identity of contributors.” How this fundamental disagreement is resolved in Baku will define global climate policy for the next decade.
Frequently Asked Questions About the COP29 Climate Finance Debate
What is the NCQG in climate finance?
The New Collective Quantitative Goal (NCQG) is a new climate finance target being negotiated to replace the previous goal of $100 billion per year. It is meant to provide financial support to developing nations for their climate mitigation and adaptation efforts beyond 2025.
Why does the EU want China and the UAE to pay for climate change?
The EU argues that countries like China and the UAE have become major economic powers and significant greenhouse gas emitters since the 1990s. Therefore, it believes they should now share the financial responsibility of helping poorer nations combat climate change.
What is the US position on climate finance for COP29?
The United States holds that any financial contributions to the NCQG should be completely voluntary. It opposes making these contributions legally binding, a hardline stance that could complicate efforts to reach a strong agreement in Baku.
What do developing countries mean by ‘historical responsibility’?
‘Historical responsibility’ refers to the idea that wealthy, industrialized nations are primarily responsible for the climate crisis because their economic development was powered by fossil fuels for over 150 years. Developing countries argue these nations owe a “climate debt” and should lead in paying for the solution.
Will coal be a major issue at COP29?
Yes, the push to phase out coal will be a highly contentious issue. While the EU is advocating for a rapid transition away from coal, developing nations like India argue they need more time and financial support to shift their energy systems without hurting their economies.
