“Azerbaijan to Host UN Climate Change Conference and Launch $1 Billion Climate Action Fund”
The 2024 UN Climate Change Conference (UNFCCC COP 29) is set to take place in Baku, Azerbaijan in November. Azerbaijan, as the host of COP29, has announced the launch of a new Climate Action Fund with the ambitious goal of mobilizing $1 billion to support new national climate targets in developing nations.
According to Reuters, contributions to the fund will come from oil and gas companies as well as 10 fossil-fuel producing countries. The fund will be overseen by an international board of shareholders and will be based in Baku, the capital of Azerbaijan.
Mukhtar Babayev, the COP29 president-designate, emphasized the importance of countries rich in natural resources taking a leading role in addressing climate change. He called on donors to join the initiative to enhance ambition and enable action as part of the COP29 plan.
Azerbaijan will be a founding contributor to the Climate Action Fund, which will receive yearly donations from its contributors. Additionally, 20 percent of investment revenues will be dedicated to a Rapid Response Funding Facility to assist countries most vulnerable to climate disasters.
Yalchin Rafiyev, COP29 presidency chief negotiator, highlighted the unique approach of the fund, which will be capitalized by contributions from fossil-fuel countries and companies to catalyze private sector involvement. Developing countries will be eligible to receive funding from the Climate Action Fund.
Azerbaijani officials emphasized the flexibility of the fund compared to global facilities like multilateral development banks, as decisions on project investments will be made directly by shareholders.
However, not everyone is in favor of the fund’s structure. Bronwen Tucker, public finance lead at Oil Change International, criticized the voluntary nature of the contributions from fossil fuel companies, stating that polluters should be held accountable on a larger scale.
Azerbaijan plans to establish an economists’ working group to develop a formula for potential donors to determine their contributions and a process for developing countries to access the fund.
UN climate chief Simon Stiell stressed the importance of progress in climate finance for the success of COP29, with a focus on improving delivery to meet the needs of developing countries.
During the conference, nations will aim to reach an agreement on a new climate finance target that will see annual transfers from rich countries to poorer ones starting in 2025.
Global Citizen’s vice president, Friederike Roder, highlighted the role of fossil fuels in global warming and called for a more robust financial mechanism, rather than relying solely on voluntary donations.
As preparations for COP29 continue, the international community will be closely watching the outcomes of the conference in Baku and the impact of the Climate Action Fund on global climate action efforts.