This year’s Conference of the Parties (COP) showed just how tightly governments are guarding their budgets.
The new climate finance goal of US$300 billion agreed at COP29 is sorely needed, even if far from sufficient to address the global climate crisis. The deal will go some, but not all the way, in tiding over poorer countries’ urgent need for capital.
From devastating natural disasters and sudden changes in political leadership, to heightened military conflicts and bubbling trade wars, the realities of the past year have tested leaders’ prioritisation of climate change like never before. When totted up, US$300 billion is allegedly just 45 days of global military spending, or the approximate price of damages from a single US hurricane.
So, while US$300 billion a year by 2035 was the final figure countries agreed upon, a daunting question mark hangs over how the world scales up this figure beyond the US$1.3 trillion figure that countries also committed to.
At its core, carbon finance is a transaction, not a donation, where both parties benefit
It’s therefore only fitting that in the same two weeks the world came together to agree on a new finance goal, countries simultaneously agreed on the new rules for establishing an international carbon trading market – referred to as Article 6 – and encompassing the new Paris Agreement Crediting Mechanism and enhanced rules to prevent countries from double-counting emission reductions as they trade.
Crafting