As world leaders gather in Baku, Azerbaijan for the COP29 climate summit, a stark warning emerges from a group of top economists: developing nations urgently need $1 trillion annually in climate finance by 2030, not 2035 as previously proposed, to avoid crippling economic burdens as they confront the escalating climate crisis.
Developing Nations on the Front Lines
The Independent High-Level Expert Group on Climate Finance (IHLEG), chaired by renowned economists Lord Nicholas Stern, Dr. Vera Songwe, and Dr. Amar Bhattacharya, sounded the alarm in a new study released amidst the fraught negotiations at COP29. The report underscores the disproportionate challenges faced by poorer countries as they grapple with reducing greenhouse gas emissions and adapting to the relentless onslaught of extreme weather events.
“It’s more expensive the longer you wait. This [$1tn by 2030] is absolutely possible for rich countries to achieve, but it does entail real commitment and moving quickly.”
– Lord Nicholas Stern, Chair of the IHLEG
The study builds upon the group’s 2022 findings, which estimated that developing nations, excluding China, would require approximately $2.4 trillion annually to effectively combat and adapt to climate change. While up to half of this sum could potentially be sourced from these countries’ own budgets, the remaining $1 trillion would need to come from external sources, such as:
- Private sector investments: ~$500 billion
- Multilateral development banks: ~$250 billion
- Direct grants from developed countries
- Special drawing rights from the IMF
- Innovative taxation (e.g., levies on aviation and shipping)
The Cost of Inaction
Delaying the delivery of this critical climate finance until 2035, as some wealthy nations have proposed, would place an untenable strain on countries already struggling to lift their populations out of poverty while simultaneously investing in a low-carbon future. According to a high-level executive from a public finance institution who spoke on condition of anonymity, even the World Bank’s recent commitment to double its climate finance to $120 billion annually by 2030 falls short:
“They could do more.”
– Anonymous public finance executive
Failure to act decisively now will only compound the costs and human suffering in the years to come. As articulated by Mohamed Adow, Director of the think tank Power Shift Africa:
“While private finance has a role to play in building new renewable energy, it has failed miserably to tackle adaptation needs of vulnerable communities. That’s why it’s vital we get a commitment of grant based, public finance to address the issues which profit-seeking private finance can’t address.”
– Mohamed Adow, Director of Power Shift Africa
A Defining Moment for Global Climate Justice
As the COP29 negotiations enter their crucial final week, the divisions between the developed and developing world have never been starker. Wealthy nations advocate for a significant portion of the $1 trillion target to come from private sector sources, while many are also pushing for major emerging economies and oil-rich states to contribute their fair share.
For climate activists like Harjeet Singh, Global Engagement Director for the Fossil Fuel Non-Proliferation Treaty Initiative, such proposals smack of accounting trickery designed to absolve rich countries of their moral and legal obligations under the Paris Agreement:
“If COP29 fails to set a meaningful climate finance goal – real trillions in grants, not accounting tricks – we’re all on the losing side. Climate devastation is already an everyday reality, and every delay only deepens the crisis for everyone.”
– Harjeet Singh, Global Engagement Director, Fossil Fuel Non-Proliferation Treaty Initiative
The Path Forward
As the world watches with bated breath, one thing is certain: the decisions made in Baku over the coming days will reverberate for generations. Will the developed world heed the call of the world’s most vulnerable and unleash the financial resources necessary to secure a livable future for all? Or will short-term self-interest and political expediency condemn millions to a future of unrelenting climate chaos?
In the words of Lord Stern: “Developed countries should embrace the logic of this analysis. Kicking the can down the road doesn’t help.” The path forward is clear – it is now a question of mustering the political will to walk it. For the sake of our shared humanity and the planet we call home, failure is not an option.
