A fresh draft agreement released on Thursday, November 21, at the COP29 climate talks has underscored the deep divide between rich and poor nations over climate finance, just a day before the summit’s scheduled conclusion. The streamlined text, which aims to address the financial needs of developing countries in their fight against global warming, offers no concrete funding figure, leaving negotiations in a precarious state.
The draft, slimmed down to a 10-page document, highlights the starkly opposing positions of developed countries, obligated to provide climate finance, and developing nations, which urgently require funds to transition to cleaner energy and adapt to climate impacts.
“This document illustrates the two extreme ends of the aisle without much in between,” said Li Shuo, director of the China Climate Hub at the Asia Society Policy Institute, as frustration mounts on both sides.
At the core of the negotiations is the question of climate finance: who should pay, how much, and in what form. Developing nations have emphasized the need for at least $1 trillion annually by 2030 to address climate challenges, a figure rising to $1.3 trillion annually by 2035, according to a UN-commissioned economic assessment. However, the latest draft lacks a specific financial commitment.
Ali Mohamed, chair of the African Group of Negotiators and Kenya’s climate envoy, referred to this absence as the “elephant in the room.”
“This is the reason we are here,” said Mohamed. “But we are no closer, and we need the developed countries to urgently engage on this matter.”
The demand from developing countries largely centers on receiving funds in the form of grants rather than loans, which would exacerbate their debt burdens. Rich nations, meanwhile, face domestic fiscal and political pressures, making it challenging to pledge funds outright.
For many developing nations, the lack of clarity around a financial target is more than a bureaucratic failure—it is a betrayal of the millions facing climate-related disasters. Greenpeace campaigner Jasper Inventor described the absence of a specified goal as “an insult” to those most vulnerable to climate change.
Kenyan climate activist Mohamed Adow echoed this sentiment, drawing attention to the tangible impacts of inaction.
“We came here to talk about money. The way you measure money is with numbers,” said Adow, founder of the think tank Power Shift Africa. “We need a cheque, but all we have right now is a blank piece of paper.”
The European Union and the United States, two of the largest providers of climate finance, have refrained from committing to a specific figure until the scope of a broader deal is determined. Their hesitation underscores a long-standing tension in international climate talks: balancing moral obligations with domestic constraints.
Rich nations argue that climate finance must not rest solely on government budgets and have advocated for leveraging private sector investments to meet funding goals. Critics, however, contend that relying on private finance could dilute the urgency and equity of support needed by the most vulnerable nations.
The type of funding—grants versus loans—has emerged as another contentious issue. Many developing nations insist on grants, pointing out that loans increase debt burdens, particularly for countries already grappling with economic instability. However, developed nations argue that private investment and loan-based mechanisms are necessary to mobilize sufficient resources.
“This binary choice between grants and loans misses the bigger picture,” said a negotiator for a developed nation, speaking on condition of anonymity. “We need to think about blended finance models and innovative mechanisms to pool resources effectively.”
With only one day left before the scheduled conclusion of COP29, the pressure is mounting to bridge the gap. Delegates are expected to continue discussions late into the night, aiming to salvage a deal that could define the trajectory of global climate action for years to come.
“The stakes couldn’t be higher,” said an observer from an environmental NGO. “If we don’t find common ground, we risk leaving Baku without a deal, setting back climate progress at a time when we can least afford it.”
While negotiators debate numbers and structures, the human cost of climate inaction looms large. From unprecedented flooding in Pakistan to prolonged droughts in the Horn of Africa, vulnerable populations are already bearing the brunt of climate change. For these communities, the stakes are existential.
For small island nations, which face rising sea levels, the delay in finalizing a climate finance deal is especially alarming. “Our survival depends on the outcomes of these negotiations,” said a delegate from the Pacific Islands. “We cannot wait another year for action.”
Regardless of the outcome in Baku, the discussions at COP29 are likely to influence future climate negotiations and financial mechanisms. The issue of “loss and damage,” which addresses compensation for countries suffering irreversible climate impacts, has also been a significant focus. Some progress has been made, but a comprehensive agreement remains elusive.
Observers believe that the struggle over climate finance reflects deeper issues of trust and equity in global climate governance. Developing countries have long accused rich nations of failing to meet their previous commitments, including a 2009 pledge to mobilize $100 billion annually by 2020—a target that remains unmet.
Despite the challenges, some remain optimistic that a breakthrough is possible. Li Shuo of the Asia Society Policy Institute noted that the simplified text could pave the way for focused discussions.
“This is not the end,” he said. “Sometimes, it’s in the final hours that the most progress is made.”
