Donald Trump's victory in the US election could influence the tone of discussions at the UN Cop 29 climate talks that get under way in Baku, Azerbaijan, today. But world leaders can still agree on a new finance goal for developing countries that has the potential to shape the energy transition for years to come.
Parties to the Paris deal this year need to decide on a new finance goal for developing nations — funded by developed nations — 15 years after the current $100bn/yr target was agreed. But negotiations could be "severely undermined" by Trump's victory, according to non-profit IISD's policy adviser, Natalie Jones. Trump pulled the US out of the Paris accords during his previous term in office and has said he will do so again. His election is "a blow in the fight against the climate crisis", admits France's former climate change envoy, Laurence Tubiana, although he insists that "a positive outcome is possible".
Unlike in 2016, at Cop 22 in Marrakesh, Morocco, when the election of Trump came as a shock, parties have had time to plan, many observers noted. And the US could still play a role, while other countries take the lead. Developed and developing nations have grasped the urgency of agreeing on a new goal, observers say. "All parties have an interest in reaching an outcome," non-profit World Resources Institute director of international climate action David Waskow says.
Technical talks earlier this year failed to progress on key issues, including the amount of finance to be provided and who will contribute. Developing countries called for a floor of at least $1 trillion/yr, but developed countries have yet to put a number forward. The idea of a layered goal with a public finance core gathered support at ministerial meetings last month. China, in June, refused to be drawn into discussions to broaden the contributor base. In October, it reiterated that the goal is an obligation for developed countries, but said other countries can provide support voluntarily, as stipulated in the Paris agreement.
Baku is a pivotal summit since new finance will help support more ambitious climate plans in developing countries, which are to be submitted by 2025. And Cop 30 host Brazil could emerge as a broker to pave the way for a successful gathering next year. Brazil is also heading the G20 this year, with finance for developing nations and the reform of multilateral development banks a priority.
All about the money
In 2021, the IEA projected that emerging and developing economies' emissions would grow by 5 gigatonnes over the next two decades under current policies. "The NCQG [new collective quantified goal] will be a key enabler of the energy transition," civil society organisation Oil Change International's global policy lead, Romain Ioualalen, says, adding that commitments in Dubai last year — including transitioning away from fossil fuels — will not materialise without a finance deal.
Also key for Cop 29 will be whether parties can agree rules to unlock carbon markets under article 6 of the Paris accord. There has been progress this year — including the article 6.4 supervisory body adopting standards on methodologies and greenhouse gas removal — even though discussions are moving too slowly.
In Baku, the focus will largely remain on environmental integrity, double counting and the role of registries, with US and EU views differing here. And for article 6 talks, too, there is a risk that Trump's victory could slow the pace of progress, although International Emissions Trading Association president Dirk Forrister says he hopes that the Biden administration's negotiators will use what is left of their time "wisely" to advance work on carbon markets. "Progress this year on article 6 can help unleash more private investment to help countries strive for stronger NDCs," he said.
