Ahead of the COP30 climate meeting starting in Belem, Brazil, next week, a new report on climate finance has asked developed countries to work together to formulate a clear delivery plan by next year for the $300 billion per year that they have promised to mobilise every year from 2035 to help developing nations deal with climate change.
The report has also asked the developed nations to significantly scale up current levels of grants and concessional finance being provided through bilateral or multilateral channels to help efforts to raise more resources for the developing countries, in addition to the $300 billion that has been promised.
The Report on Baku to Belem Roadmap to 1.3T was commissioned last year to address the disappointment among the developing countries over the finance deal finalised in Baku, Azerbaijan, during the COP29 meeting. Developing countries had been demanding that developed countries commit to providing at least $1.3 trillion a year in climate finance. In Baku, the developed countries agreed only for a $300 billion a year figure, and that too from 2035.
Under the international climate architecture, governed by the UN Framework Convention on Climate Change and the 2015 Paris Agreement, developed countries are obliged to provide financial support to the developing countries to fight climate change. This is because it is the developed countries which have been primarily responsible for emitting greenhouse gases in the past 150 years that is the main reason for global warming and consequent climate change.
Between 2020 and 2025, the developed countries had promised to raise at least $100 billion every year for this purpose. But the Paris Agreement mandates that this figure should be revised upwards every five years.
In Baku, the developed countries agreed to a new figure, but the delivery would happen only from 2035. Developing countries, including India, had reacted angrily to the ‘paltry’ and ‘abysmally’ insufficient amount.
The presidencies of COP29 and COP30 (Azerbaijan and Brazil) had then jointly commissioned this report to explore additional avenues to reach the $1.3 trillion goal by 2035.
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The new report, however, acknowledges that the climate and nature-related investment requirements of the developing countries in 2035 would be about $3.2 trillion a year. It explores a variety of options to raise additional financial resources for climate action, and considers the possibility of carbon tax, wealth tax, corporate taxes, aviation taxes, levies on luxury goods and even direct budget contributions from developed countries. These were based on the inputs and suggestions it had received from different countries and other stakeholders.
An Independent High-Level Expert Group on climate finance, which has been helping with the finance discussions in the climate meetings for the last few years, recently produced a potential pathway to reach the $1.3 trillion target by the year 2035. According to this pathway, presented in the Baku to Belem Roadmap, the biggest chunk of money would come from cross-border private finance, meaning private investment in developing countries, amounting to about $650 billion.
