COP29's climate finance deal stab on Africa's back

The dust raised by the United Nations Framework Convention on Climate Change (UNFCCC) COP29 protagonists in Baku, Azerbaijan, is finally settling down.

Opinions are divided on the outcome of the conference that was expected to shed light on global goal on finance to tackle devastating effects of climate change faced by poor people across the world.

Obviously, the divergence of views is as dispersed as the goal itself, technically known in the climate parlance as New Collective Quantified Goal (NCQG) on climate finance.

A section of civil society, largely under the auspices of the Nairobi-based Pan African Climate Justice Alliance (PACJA), regard COP29 a flop. However, government delegations have termed the forum a success due to the sub-optimal Sh38.9 trillion (US$300 billion) annual pledge up to 2035.

The cash commitment falls short of the Sh168 trillion (US$1.3trillion) Africa and other developing countries were pushing for to address adaptation needs and climate funding for vulnerable people.

With the Needs Determination Report by the Committee on Climate Finance estimating the costed needs in Nationally Determined Contributions (NDCs) of developing country Parties at Sh653.4 trillion to Sh892 trillion (US$5.036 TO US$6.876 trillion) up until 2030, it is apparent that the pledge secured in Baku does not inspire hope, nor does it demonstrate genuine commitment by rich countries to robustly participate in the global effort towards Net Zero by the turn of the century.

Informed by realities on the ground and the comprehensive outcome of the Global Stock take in Dubai, increased climate finance in NCQG is essential in strengthening needs-based adaptation for Africa, enabling countries to seize opportunities for job creation, green growth in the context of sustainable development and poverty eradication.

This aspiration has been dampened by the Baku outcome and urgent response measures in building resilience in key sectors, such as health, agriculture, water and other livelihood sub-sectors will remain in limbo for a while.

In the decision, ‘Parties decides to set a goal, with developed country Parties taking the lead, of at least Sh38.9 trillion (US$300 billion) per year by 2035 for developing country Parties for climate action; from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources’, rich countries did not only escape their responsibility, but it makes it almost difficult to hold any party to account, thus helping them fulfill their long-fought battle to transfer the burden of action to the victims of their actions.

Non-parties to the Paris Agreement, including private sector and the ambiguous ‘alternative sources’ are committed to mobilise from the goal. As opposed to the Sh13 trillion (US$100 billion) which developed countries could dutifully be held to account, the framing of the sources makes it impossible to hold any party to account as it is voluntary.

In fact, developing countries are encouraged to make contributions, including through South–South cooperation, on a voluntary basis – quite a tricky mockery by historical polluters!

The ‘Recognising the voluntary intention of Parties to count all climate-related outflows from and climate-related finance mobilised by multilateral development banks towards achievement of the goal set forth’ is again a bold licence for developed countries to count loans to developing countries as climate finance contribution and opens the doors wide for double-counting Official Development Assistance (ODA) as part of climate finance.

Don’t forget that Multilateral Financial Institutions, such as World Bank and International Monetary Fund, together with their affiliates, will gleefully appropriate their largesse towards their client poor countries, which will exacerbate the debt crisis of heavily indebted countries.

Clearly, within such framework, it is difficult to pursue an objective accountability process and more so when the decision text validates injustices on climate finance contribution from developed countries. The spirit of the principles of UNFCCC that calls for provision of public finance by developed countries seems to have lost meaning. Worse still, developing countries are poised to sink deeper into debt as climate becomes a new source of debts as they grapple with rising development demands.

For the NCQG to reflect the scale and urgency of responding to climate change and provide for sufficient resources to support adaptation, mitigation, loss, and damage and just transitions interventions, an annual provision of a grant-based quantum of Sh168 trillion was a necessity.

Reforming the global financial architecture to address the high indebtedness of developing countries has been accepted globally as an urgent undertaking. The spirit of this reform process reverberated the plenary halls of COP29 in the opening speeches and in round of negotiations. It would have, therefore, been reasonable that the NCQG responds to these global economic challenges faced by developing countries - high capital costs, and debt sustainability.

Ideally this response would have been manifested by commitment of developed countries to their obligations on provision of finance in accordance with the UN Convention on Climate Change and it’s Paris Agreement. Unfortunately, the decision went flat on this and opened floodgates for more private sector-mobilised climate finances and sinking African communities and nations deeper into debt crisis.

Undoubtedly, African countries will continue to roll out climate actions with money mobilised from profit-driven private sector directly or through multilateral development banks (MDBs) who have become preferred conduit of loans by developed countries.

Paradoxically, African countries are paying back for these loans with high interest rates, including the principal amount, yet these funds are counted as climate finance contribution by the North. It is a practical case of African governments being complacent to cheap schemes by the developed countries.

PACJA has been equivocal in asserting that loans by developed countries to African countries cannot constitute climate finance contribution by developed countries, under whichever circumstances.

The NCQG, which will be largely financed with resources from private sector entities is a classical case of how Africa is carrying the world’s burden as developed countries pose and steal moments to be celebrated as world saviors, in a situation where they are, but just ruthless business partners.

And it’s not merely about private sector contribution to the NCQG, but rather a motivation for highly polluting countries and corporates to continue with their profligate lifestyles as Africa and other developing countries out-compete each other for the real or imagined ‘windfall’ coming carbon markets.

It seems through these ‘high integrity carbon markets’, there is a direct invitation to embrace polluters and be kind in celebrating the uncertain, conditional carbon credits whose value chains are least understood by African nations, apportioning power in developed countries.  

The priority accorded Carbon markets was vividly captured by the COP29 President Mukhtar Babayev; “we finally established the framework of high-integrity carbon markets with Article 6. We are ready to start approving projects. These markets will unlock trillions and save us billions.”

Throughout the African continent, stakeholders remain divided about carbon markets as genuine solution to climate crisis, and some of them dismiss them as green washing and false narratives.

The struggle lives on, but against this dark cloud, we boldly call for African leaders to rediscover themselves, aggregate not only their common position, but also their diplomatic prowess, strengthen regional economies and enhance their internal accountabilities. 

Dr Mithika is the Executive director and Co-founder of Pan African Climate Justice Alliance (PACJA)