The COP29 climate summit began on a hopeful note this week as leading global development banks pledged to significantly increase climate financing for poorer and middle-income nations, boosting the financial resources for countries struggling with the devastating impacts of global warming. Led by the World Bank, a coalition of major lenders committed to providing up to $120 billion in climate finance by 2030—representing a 60% increase from 2023 levels.
The pledge marks an important milestone, generating optimism among COP29 negotiators and activists who are calling for more robust action on climate financing. As the two-week summit in Baku unfolds, world leaders, ministers, and activists will press for a broad, binding agreement on climate financing to meet the escalating challenges of climate adaptation, clean energy transition, and biodiversity protection.
Announced on Tuesday, November 12, the financing commitment came from a consortium of international development banks, including the World Bank, the European Investment Bank, and the Asian Development Bank. Collectively, these institutions aim to provide $120 billion by the end of the decade to support climate-related projects in developing nations—projects that cover everything from renewable energy infrastructure and climate-resilient agriculture to coastal defenses and disaster risk management.
“This is an extremely positive sign,” said Irish Climate Minister Eamon Ryan. “It’s very helpful, but that on its own won’t be enough. Countries and companies must also step up with funding and implementation,” he added, emphasizing the need for a comprehensive financial mechanism that draws from a wide pool of public and private sources.
The commitment comes at a crucial time as developing countries press for greater contributions from wealthier nations, who are historically the largest carbon emitters. Despite the development bank pledge, representatives from developing countries and climate advocacy groups say additional commitments from rich nations are needed to close the financing gap.
The principal goal of COP29 in Azerbaijan is to hammer out an international climate financing framework that can mobilize trillions of dollars in sustainable funding to address the accelerating impacts of climate change. With the effects of climate change increasingly felt worldwide—from catastrophic wildfires and record-breaking heatwaves to devastating floods and hurricanes—scientists are warning that adaptation and mitigation efforts must scale up dramatically.
According to a United Nations report, global financing for climate action must reach at least $4 trillion annually by 2030 if the world is to meet its emissions reduction targets and limit global warming to 1.5 degrees Celsius. This underscores the urgency of reaching a consensus on financing mechanisms that can be implemented quickly and equitably.
Wealthy nations committed to delivering $100 billion per year in climate finance to developing countries by 2020, but only managed to meet this target in 2022. That pledge expires at the end of 2023, leaving developing countries anxious about the future of financial support.
“This is about fairness and justice,” said Harjeet Singh, a prominent climate activist. “Developed countries have not only neglected their historical duty to reduce emissions, but they are also doubling down on fossil-fuel-driven growth. We need stronger commitments and legally binding targets.”
As the summit progresses, leaders from developing countries are urging industrialized nations to increase their contributions. The absence of consistent financial support, they argue, severely limits their capacity to transition to renewable energy, build climate-resilient infrastructure, and implement early warning systems for climate-related disasters.
“This international process to address global warming is moving far too slowly,” said Edi Rama, Prime Minister of Albania. “The impacts of climate change are intensifying, yet our speeches and promises have so far failed to turn into real action.”
Rama’s remarks highlight a central frustration for many smaller nations that feel the brunt of climate impacts yet lack the resources to adequately respond. Albania and other vulnerable countries face increasingly volatile weather patterns that disrupt agriculture, degrade infrastructure, and threaten livelihoods.
The mounting climate risks and delayed action have stoked frustration among activists and government officials alike, fueling calls for clear, enforceable financing agreements that would ensure sustained, predictable funding for developing nations.
As COP29 deliberations unfold, scientists have declared that 2024 is on track to be the hottest year on record, following a series of unprecedented extreme weather events. In the United States, climate-fueled wildfires forced widespread evacuations in California, while New York experienced air quality alerts due to smoke from fires in neighboring states. Across the Atlantic, Spain saw its worst floods in modern history, devastating communities and costing billions in damages.
The intensifying impacts of climate change are proving to be faster and more severe than predicted, according to recent studies. Extreme heat events, prolonged droughts, and intense storms are reshaping ecosystems, displacing populations, and testing the resilience of global food systems. For developing countries with limited financial capacity, these escalating risks represent an existential threat.
Scientists at COP29 are sounding the alarm that without a substantial increase in global funding for climate resilience and adaptation, developing nations will struggle to protect their populations from climate risks. This underscores the need for a durable, long-term financing solution that provides consistent support.
While the $120 billion pledge from development banks is a major milestone, negotiators at COP29 are pushing for even more ambitious financial targets. Various proposals are being discussed.
Global Climate Fund: A comprehensive funding mechanism that would pool resources from public and private sources, aiming to raise up to $500 billion annually by 2030.
Carbon Pricing: Proposals for an international carbon pricing mechanism to generate revenue for climate finance while incentivizing emissions reductions among high-emitting industries.
Debt Relief for Climate Action: Some activists are calling for debt forgiveness for developing countries that commit to using the savings for climate projects, a model that could free up resources for adaptation and green energy.
“Climate finance is no longer just an option—it’s a necessity,” said Minister Eamon Ryan. “We must find a way to sustainably fund the transition to green energy and climate resilience.”
The European Union and several non-governmental organizations are advocating for an accountability mechanism to ensure that pledged funds are delivered. Under this system, governments and banks would report progress toward financial commitments annually, allowing for greater transparency and accountability in climate financing.
One of the central debates at COP29 revolves around the question of climate justice. For years, developing countries have argued that they bear an unfair burden in adapting to a crisis they contributed little to cause. Countries like Bangladesh, the Philippines, and Mozambique, which are highly vulnerable to climate impacts, emit only a fraction of the greenhouse gases produced by wealthy nations.
“These nations did not cause this problem, but they are paying the price,” said Harjeet Singh. “This summit is about ensuring that the people who are most vulnerable receive the help they need to survive and thrive in a warming world.”
Activists are pushing for the inclusion of “loss and damage” provisions that would allocate specific funds for countries facing the worst impacts of climate change. Such provisions could finance relocation efforts for displaced communities, restore critical infrastructure, and rebuild after climate disasters.
With scientists warning of potentially irreversible climate tipping points, the stakes for COP29 have never been higher. A recent study from the Intergovernmental Panel on Climate Change (IPCC) has cautioned that without significant emissions reductions and accelerated adaptation efforts, the world could see a drastic rise in sea levels, widespread loss of biodiversity, and more frequent natural disasters.
COP29 delegates are mindful of the limited time available to secure meaningful commitments. While the development banks’ pledge is a positive start, much more is needed to meet the demands of a world in climate crisis.
“COP29 is a pivotal moment,” said Eamon Ryan. “The decisions we make here will determine not only the future of climate finance but the future of our planet.”
