COP29 delegates have left Baku, but the financing challenge remains
The COP29 in Baku was supposed to breathe new life into North-South climate cooperation through the negotiation of the new NCQG financing target. Instead, confrontational negotiations produced a half-hearted agreement, and the onerous task of charting a path to bridge the resource gap before the next COP.
The new agreed target of $300 billion —an increase from the previous $100 billion— leads, once adjusted for inflation, to a slowdown in the growth of financing flows compared with current trends. More critically, it falls dramatically short of the estimated $1.3 trillion in external funding (both public and private) needed to address the climate crisis—an estimate that guided the negotiations. The ‘Baku to Belém roadmap’, a late addition to the agreement, is tasked with reducing this gap by COP 30. Yet its mandate is still vague, its options are limited, and the challenge is daunting.
Beyond political posturing, progress was further impeded by uncertainties surrounding the estimates of financing needs, which are undermined by significant gaps and inconsistencies in underlying national data.
One of the most contentious debates, the scope of eligible contributions (public as well as private catalysed by the public) ended without significant evolution. Similarly, no changes were made to the mandatory contributor base. Multilateral development banks still appear as the preferred channel for this financing: at COP29, they committed to providing and catalysing over 60% of total financing flows by 2030. This ambition demands substantial reform, requiring MDBs to scale up financing and deploy it more effectively —a point underscored in a recent joint report by financial coalitions, including the I4CE-supported Mainstreaming Initiative
In response to these challenges, I4CE is focusing on supporting the development of national financing plans grounded in detailed sectoral investment needs assessments. Such plans are essential for mobilizing private finance, informing international negotiations, and aligning donor contributions with national priorities. The 10-country analysis we publish this week highlights notable improvements in long-term national objectives, which are increasingly incorporating funding concerns. However, comprehensive assessments of financing needs, particularly in the short term, remain critically lacking.
