Rich Nations Commit $300bn to Climate Finance at Cop29

Major developed nations at the UN climate talks in Azerbaijan have agreed to increase their financial commitment to $300 billion annually to help developing countries address the climate crisis. The deal comes after intense overnight negotiations at the Cop29 summit in Baku, which saw ministers from countries like China, the EU, Saudi Arabia, Brazil, the UK, the US, and Australia engaging in closed-door discussions to resolve disputes over climate finance and the transition away from fossil fuels.
The Azeri hosts facilitated the negotiations after backlash over an initial $250 billion proposal. Developing nations had labeled the earlier figure a “joke,” arguing it fell far short of what is required to support a low-carbon transition and mitigate the devastating effects of extreme weather events. In response, the UN secretary-general, António Guterres, personally lobbied global leaders to push for a higher financial target.
Despite the increase to $300 billion, the new offer still falls short of the $1.3 trillion per year in climate finance that developing nations have requested by 2035. The draft text circulated during the talks outlines a three-tiered funding model:
1. Core Funding: A base layer of financial contributions from developed nations, currently pegged at $300 billion.
2. Middle Layer: Revenues from innovative sources such as taxes on fossil fuels, carbon trading, and high-carbon activities.
3. Outer Layer: Private sector investments in renewable energy projects, such as solar and wind farms.
The proposed $300 billion primarily consists of grants and loans, but activists argue that developing countries need a much larger share of direct grant funding to avoid falling further into debt. Claudio Angelo of Observatório do Clima in Brazil criticized the offer, stating that it was “way, way below” the needs of poor nations already burdened by financial crises.
Several wealthier nations, including Japan, Switzerland, and New Zealand, were initially resistant to the $300 billion figure but faced pressure from the EU and other countries willing to increase the offer. Ministers have argued that reaching a deal now is critical, as future political changes in countries like the US and Germany could make it harder to secure commitments in 2025.
Meanwhile, tensions over fossil fuel transition commitments remain unresolved. Azerbaijan has been accused of downplaying the pledge to transition away from coal, oil, and gas—a key agreement reached at last year’s Cop28 talks in Dubai. Saudi Arabia has reportedly led efforts to remove such language from draft agreements, sparking frustration among nations advocating for a stronger push toward renewable energy.
The Cop29 summit highlights the urgency of securing long-term climate finance solutions. While the $300 billion commitment marks a step forward, developing countries and activists continue to push for bolder measures to address the global climate crisis.