What is COP29 and why it is important?

These meetings are crucial opportunities to show commitment and progress towards climate justice.

This year’s conference is called COP29 as it is the 29th Conference of the Parties (COP) of the United Nations Framework Convention on Climate Change (UNFCCC), which was adopted in 1992. It will be held in Baku, Azerbaijan, from 11 to 22 November 2024.

Countries will have to adopt a new global target for climate finance – this is money that wealthy countries who have polluted for longer and have more economic resources must pay to help communities in the Global South, who are least responsible for the climate crisis, to access renewable energy or build resilience to climate impacts.

For example, building flood defences that protect homes and land from damage, investing in farming technologies that are resistant to drought, or supporting communities to recover from a tropical storm.

Rich countries have been polluting the atmosphere for longer and have grown rich benefiting from an emissions-driven economy and from the resources of Global South countries through decades of colonisation. At the same time, it is communities and marginalised groups in lower-income countries that are most affected by the climate crisis. They should not have to unfairly pay the price for a crisis they haven't caused.

Rich countries have a moral and legal obligation to provide climate finance to countries in the Global South due to their role in creating the majority of the emissions causing the climate crisis. This responsibility is both historical and still happening right now. For example, the combined carbon emissions of Somalia, Ethiopia and Kenya reach a mere 0.1% of the global total, whereas the carbon emissions of the G20 countries account for 76%.

Providing adequate climate finance is the only way to unlock global climate action that will put the world on a path to limit global temperature rise to 1.5°C, enable people to adapt to the effects of climate change, and address the now unavoidable loss and damage from climate change impacts falling on those least responsible.

The new global target for climate finance to be adopted at COP29 is called “New Collective Quantified Goal”. By adopting the Paris agreement in 2015 – the  flagship climate treaty – states committed to adopt the NCQG by 2024 – so at this years COP at the latest.

The NCQG will succeed the previous goal set in 2009 at the Copenhagen Climate Summit, where developed countries committed to mobilizing $100 billion per year by 2020 and up to 2025 to support climate action needed in lower-income countries. The new goal will need to be met from 2026 onwards.

The goal was not met in 2020, as per the commitment taken by wealthy countries. According to the latest official figures based on information provided by wealthy countries, the goal was met and surpassed in 2022, as wealthy countries claim they mobilised nearly $116 billion in climate finance in 2022.

However, due to dominance of loan-based finance and other misleading accounting practices, Oxfam estimated that the true value of climate finance mobilised in 2022 to be around a quarter of that which officially reported figures suggest.

So far, climate finance is also predominately provided from aid budgets at the expense of other vital spending, such as health, education or social protection.

The Paris agreement does not indicate how much the NCQG needs to be. However, in Paris states agreed that the NCQG will be higher than  $100 billion per year and will be calculated “taking into account the needs and priorities of developing countries”.

It is estimated that lower-income countries need trillions to mitigate and cope with the worsening effects of climate breakdown. Climate justice activists are demanding the Global North provide at least $5 trillion a year in public finance to the Global South "as a down payment towards their climate debt" to the countries, people and communities of the Global South who are the least responsible for climate breakdown but are the most affected.

The NCQG must be ambitious enough to address the needs of countries and communities impacted by the climate crisis in the Global South, at the scale of trillions of dollars. This finance should be additional to aid budgets.

The new climate finance goal should cover funding for three areas:

• Mitigation: reducing emissions and ensuring a just transition to renewable energy and a zero-carbon economy
• Adaptation: supporting people to adapt and become more resilient to the effects of climate change
• Loss and damage: providing support and compensation for people who have suffered the impacts of climate change, such as food insecurity, displacement, lost livelihoods or trauma as a consequence of climate-induced extreme weather events or slow impacts such as sea-level rise.

Until now actions for adaptation have been largely underfunded compared with mitigation. The need to provide separate and additional funding to respond to loss and damage has only recently been recognised with the creation of a dedicated Loss and Damage Fund. The new climate finance goal should include sub-goals for adaptation and loss and damage, to ensure that these important areas are adequately funded.

Climate finance should not be provided as loans, which deepen existing debt crises that many lower-income countries face, and force countries to pay over the long run for a crisis they have not caused.

The NCQG should therefore specify that wealthy countries will prioritise grants over loans and that grants should be the only option for adaptation and loss and damage.

Climate finance must be accessible, particularly for those countries and people who have so far struggled to access funding, including organisations representing women, young people, Indigenous peoples and other groups experiencing marginalisation. Climate finance must be provided and implemented in a way that facilitate the participation of the people most affected by the climate crisis, and contribute to gender equality, social justice and the fulfillment of human rights.

The UK should champion an ambitious and just NCQG that is sufficient and reflects the needs of countries and communities impacted by the climate crisis in the Global South, at the scale of trillions of dollars.

The UK should support a goal mostly composed of public finance and with sub-goals for adaptation, and loss and damage.

The UK has an existing commitment to spend £11.6bn on climate finance by 2026. This is reported to the global target of $100 billion. The new UK Government is yet to recommit to this pledge. In the future, the UK will need to pledge a much higher amount to contribute to the new global climate finance goal, reflecting its responsibility for emissions, and capacity to pay.

The UK has historically upheld a positive standard on the quality of its climate finance, committed to providing a significant share in the form of grants. However, changes made in 2023 to what the UK Government counts as climate finance weaken this standard and mean that more of the UK’s climate finance ICF will be delivered to countries as low-interest loans rather than grants, adding to increasingly unsustainable debt burdens. This new approach has also enabled £1.7bn of an already depleted aid budget to be relabelled as ‘climate finance’ without meaningfully increasing support to lower-income countries.

The money is there. Globally, billionaires are now £2.6 trillion richer than they were at the beginning of this decade of crisis and in the UK, the richest 1% now hold more wealth than 70% of the population. Fossil fuel companies brought in record profits in 2022 and these have remained in their billions. Much of these profits are used to enrich shareholders through buybacks and dividends. According to analysis by Reuters, Shell paid $23 billion to its shareholders in 2023, while it spent only $2.7 billion on its ‘renewable and energy solutions’.

Oxfam’s new report Carbon Inequality Kills shows the outsized responsibility of the ultra-wealthy for the climate crisis and how governments can start raising the scale of financing truly needed by making ultra rich high-polluting individuals and corporations pay. Trillions of dollars a year can be raised through new progressive taxes on the wealth and income of the super-rich and from windfall corporate profits of rich and polluting companies. Oxfam estimates that in rich countries, a wealth tax alone could raise over $1.2 trillion a year. This is just the tip of the iceberg; highly progressive taxes on income, capital gains, property, and inheritance would raise far more.

In the UK, Oxfam calculated that fair taxes on the UK’s biggest  and richest polluters - namely fossil fuel companies and the extremely rich – could have raised up to £23bn in 2022.

As a starting point, the UK government should properly tax fossil-fuelled private jets and superyachts. This would result in a triple-win for our collective, fairer future – raising up to £2 billion a year in new funds, making sure those with the broadest shoulders (and sky-high emissions) foot the ballooning climate bill, and helping to discourage these highly-polluting behaviours.