Azerbaijan Postpones Launch of Climate Fund with Fossil Fuel Contributions: What Happened at COP29?

The Azerbaijan COP29 presidency has decided to postpone the launch of a voluntary fund with contributions from fossil fuel producers after facing challenges with official UN negotiations. The fund, known as the Climate Finance Action Fund (CFAF), was set to be unveiled at a high-level event during the summit but has been put on hold until the end of COP29.

According to a source close to the COP presidency, the decision to deprioritize the fund was made due to concerns that it could interfere with negotiations on the new climate finance goal, which is a key outcome of the summit. The presidency has established a working group to develop a concept that would be acceptable to donor countries interested in joining the initiative.

The CFAF aims to raise at least $1 billion and provide funding primarily to developing countries for clean energy, energy efficiency, and climate resilience projects. The fund would operate at commercial lending rates, with a portion of its revenues allocated to support vulnerable countries with highly concessional and grant-based assistance.

However, the initiative has faced criticism from climate campaigners who view it as a distraction from holding fossil fuel producers accountable for their role in the climate crisis. Andreas Sieber from 350.org described the fund as a “greenwashing fund” and stated that it would be no loss for the planet if it was ultimately scrapped.

In addition to the postponement of the CFAF, Azerbaijan has yet to announce a new national climate plan, known as a nationally determined contribution (NDC), at COP29. The presidency is facing pressure to address these issues and ensure that their climate finance initiatives align with the goals of the summit.