UN calls for scaling up climate funding ahead of COP29 in Baku

Emerging economies will need about $1.1 trillion annually in climate funding from next year and some $1.8 trillion by 2030, the UN Trade and Development (UNCTAD) projected in a report this week.
These ambitious goals are at the center of ongoing talks for a new collective quantified goal (NCQG) for climate funding ahead of the UN climate change conference, COP29, in Baku, Azerbaijan, later this month.
The current annual $100 billion commitment from developed nations is insufficient to cover the costs of climate change mitigation, adaptation, and loss and damage management, UNCTAD said in the report released just ahead of the high-stakes climate summit.
In a best-case scenario, with global economic governance reforms and multilateral coordination efforts in place, developed countries would fund at least three quarters of the climate investments needed by their developing counterparts, the report said.
This would translate to a collective target of $0.89 trillion in climate finance contributions from next year, climbing to $1.46 trillion by 2030, UNCTAD added.
The contribution would correspond to about 1.4% of the developed countries’ gross domestic product (GDP) from next year, it said.
Moreover, UNCTAD noted that it’s not just about hitting the numbers but that improving the quality of climate funding is also crucial.
The current mechanisms must be transformed to ensure funds are transparent, accessible, and aligned with the principle of common but differentiated responsibilities.
“Ultimately, the goal of the NCQG must be to transform the climate finance landscape and herald a new era of mutual trust, cooperation, and climate action,” the UNCTAD report said.
In line with the goals of the Paris Agreement and the 2030 Agenda for Sustainable Development, driving this transformation is expected to be a prime focus area to drive climate-resilient growth.
Despite this, challenges remain.
Most of today’s climate finance comes in the form of loans, debt burden for developing nations, while grants remain a small fraction, the report noted.
Future financing should expand the fiscal space of these nations and provide more concessions and grant-based support, it added.