The 2024 United Nations Climate Change Conference, COP29, held in Baku, Azerbaijan, has been dubbed the ‘Finance COP.’ With global headlines showcasing the urgency of funding climate initiatives, developing countries are clamoring for more substantial financial commitments to tackle climate change. The primary focus this year is on the New Collective Quantified Goal, which aims to establish new funding targets exceeding the old US$100 billion benchmark set back in 2009. This previous promise was only partially fulfilled, leading to mounting frustration from vulnerable nations.
Muhammad Yunus, Bangladesh’s interim leader and heads one of the nations most affected by climate change, voiced his dissatisfaction at COP29, condemning the "humiliations" faced by countries like his as they strive for financial assistance. "I think that's very humiliatin’ for nations, to come and ask for money to fix the problem others caused for them,” Yunus expressed. He underscored the injustice faced by those who contribute minimally to global warming yet suffer the most from its consequences.
The situation is exacerbated by alarming reports from the Global Carbon Project, indicating record-high carbon emissions from fossil fuels. These findings underline the scientists’ urgent calls for net-zero emissions by the late 2030s, shrinking the timeline for immediate action considerably. Azerbaijan's lead negotiator for COP29, Yalchin Rafiyev, echoed these sentiments, stating, "There are still possibilities for keeping 1.5C within reach," indicating the dire need for swift resolutions on financial commitments.
While the discussions at COP29 aim to resolve these pressing issues, negotiators are grappling with hurdles around concrete financial pledges. Developing nations are calling for at least US$1.3 trillion annually, significantly higher than what affluent countries currently offer. Tensions rise as donor nations exhibit reluctance, primarily due to their own economic pressures.
Debbie Hillier, global climate policy lead for Mercy Corps, criticized the perspective of relying on the private sector as a source of climate funds, referring to it as “wishful thinking.” Countries like the Bahamas reveal their struggles, with Prime Minister Philip Davis stating his nation has spent 18 times more on debt repayments than on climate finance. He called for the same level of commitment to climate aid as has been witnessed during global crises like pandemics and wars: "When it came to addressing the most significant crisis of our time, where is the same ability?"
Despite political tensions, including diplomatic strains between France and Azerbaijan, positive steps were taken at COP29. Brazil, the next host for COP, submitted its updated climate commitment, signaling ambitions to reduce its greenhouse gas emissions significantly. Climate action appears to be stalling at a time when urgency is greatest, with leaders urging immediate funding development.
A unique aspect of financing climate adaptation has emerged: remittances. A recent article from ISS Today emphasizes the overlooked potential of migrant remittances—private funds transferred by individuals living abroad—to help communities adapt to climate challenges. Remittances reached nearly US$100 billion sent to Africa alone last year, outpacing traditional forms of foreign aid and direct investment. Aimée-Noël Mbiyozo, the senior research consultant at ISS, notes, “Migrant remittances are potent, yet their role in building climate resilience is undervalued and underexplored.” This funding source is not only vast but also often more reliable and consistent than official aid.
These remittances can help bolster households' stability against climate change's numerous impacts, providing financial security for food, healthcare, and educational needs. They also support climate resilience initiatives by funneling money directly to those most affected—essentially allowing marginalized communities to bypass the bureaucracy associated with larger funding programs, which can be slow and cumbersome.
The report emphasized the unique features of remittances, particularly their predictable nature. For affected households, the influx of money is often greatest during emergencies or disasters, thereby allowing migrants to offer immediate assistance to family and friends back home. Implementing programs to optimize remittance channels is deemed necessary for effective climate action, and policymakers are urged to reduce the costs associated with traditional cash transfer methods, which can be exorbitantly high—average rates of about 9% for sending money to Africa.
Across the globe, nations see the urgent necessity for expedience and action. The UK has stepped up its contributions by pledging support for developing nations, particularly with initiatives focused on rainforest protection, acknowledging the dual roles of climate adaptation and mitigation. With the pledge of £100 million for the British International Investment’s new Mobilization Facility, the UK aims to catalyze additional private investment. The Foreign Secretary insisted, “Public finance alone is not going to finance the global transition,” highlighting the importance of proactive strategies and global cooperation.
Kyriakos Mitsotakis, the Greek Prime Minister, recently reiterated the need for European countries to bolster their commitment to vulnerable nations, emphasizing the long-term strategies needed to combat climate impacts effectively. During his interview with Bloomberg, he called for increased collaboration and noted, “Climate crisis is already here.” He stressed the need for Europe to improve financial support for those nations on the front lines of climate change.
Each of these narratives reflects shared sentiments among leaders at COP29: If the world hopes to confront climate change, the pooling of financial resources, the redirection of funds, and the adaptation of actionable strategies need to be prioritized urgently. Each speaker, from Yunus to Mitsotakis, encapsulates the necessity of responsibility and rectification within the global environmental governance framework. The significance and potential of remittances may hold the key to bridging the existing funding gaps and creating sustainable solutions for communities most impacted by climate challenges.
These discussions at COP29 highlight the pressing need for immediate action and enhanced funding mechanisms to address climate adaptation across the world. Policymakers are urged to create structural support for leveraging remittances and to strategize effectively to engage with vulnerable communities worldwide. Only time will tell if the commitments made at COP29 are followed by actionable funding and support for global efforts against climate change.
