“Azerbaijan’s Climate Fund Delayed: Little Progress in Finance Talks”
Azerbaijan has postponed the launch of a controversial climate fund while there has been little progress in finance talks at COP29. The Climate Finance Action Fund (CFAF), a flagship initiative of the Azerbaijan presidency, was expected to be unveiled on ‘finance day’ at the summit. However, the fund was put on the backburner, with a planned high-level event for its launch being scrapped.
The CFAF aims to raise at least $1 billion, with contributions from fossil fuel producing countries and companies. It is designed to primarily support developing countries in transitioning to clean energy, improving energy efficiency, and enhancing climate resilience. The fund would mainly provide funding at commercial lending rates, with a portion of its revenues allocated for highly concessional and grant-based support to vulnerable countries.
Negotiations over the CFAF have been complicated, with concerns raised by potential donors from developing countries about the fund setting a precedent for contributions to the post-2025 finance goal. Developed countries also expressed worries that contributions to the CFAF could be counted towards their climate finance obligations.
Climate campaigners have welcomed the postponement of the fund, criticizing it as a distraction from holding fossil fuel producers accountable for the climate crisis. While the COP29 presidency remains committed to the fund, some experts believe it would be no loss if the initiative was scrapped entirely.
In addition to the delay in launching the climate fund, progress on the post-2025 climate finance goal has been slow at COP29. Negotiators have struggled to streamline the text, with multiple versions being circulated and discussions focusing on technical issues like transparency and reporting. Government ministers are expected to arrive in Baku next week to finalize the text.
Top economists have released a new report calling for mobilizing $1 trillion a year by 2030 for climate finance to developing countries other than China. They emphasize the need for advanced economies to triple their existing $100 billion climate finance commitment and for increased support from the private sector and multilateral development banks. Developing countries have resisted efforts to broaden the contributor base to include countries like China and the Gulf states.
Overall, the postponement of the climate fund launch and the slow progress in finance talks highlight the challenges and complexities of addressing climate finance issues at COP29. Stay tuned for further updates on this developing story.