Cop29: Rich countries agree to $300bn deal as climate talks saved from collapse

Last-ditch agreement to help smaller nations comes after two weeks of talks in Azerbaijan

Cop29 President Mukhtar Babayev applauds as he attends a closing plenary meeting at the UN climate talks in Baku, Azerbaijan. Reuters

Rich countries have pledged to fund the fight against climate change to the tune of at least $300 billion a year in a deal struck at marathon UN talks in Azerbaijan.

A fiercely contested package was approved in the early hours of Sunday in Baku after the developed world raised its offer from $250 billion, bringing talks at the Cop29 summit to a heavily delayed end. The negotiations had teetered on the brink of collapse as delegates from Africa and island states walked out of last-ditch meetings amid pleas for more funding.

The compromise deal calls on "all actors" to help raise the $1.3 trillion a year sum requested by the developing world. But a $300 billion core to be arranged by rich countries is smaller and vaguer than poor and hard-hit nations had pushed for in two weeks of talks in Azerbaijan.

It can include private finance and "encourages" emerging economies to chip in - two points insisted on by the US and Europe. Weary delegates applauded as summit president Mukhtar Babayev brought the gavel down on the deal shortly before 3am in Baku.

Reacting to the deal, UN Secretary General Antonio Guterres said he had hoped for a more ambitious outcome but the said the agreement "provides a base on which to build."

UN climate chief Simon Steill hailed it as an insurance policy for humanity. "It has been a difficult journey, but we've delivered a deal," Mr Steill said after the agreement was adopted. "This deal will keep the clean energy boom growing and protect billions of lives. It will help all countries to share in the huge benefits of bold climate action: more jobs, stronger growth, cheaper and cleaner energy for all."

Talks stretched deep into the night as the Azerbaijani hosts sought to bridge deep divides on how to finance emissions cuts and disaster preparation and recovery. They said they had "faced geopolitical headwinds and made every effort to be an honest broker for all sides".

But it was clear that some states had only begrudgingly let the deal pass. Cuba, a member of a powerful group of developing nations including China, said the package will "in no way lead to an improvement in the situation". India said it was "extremely disappointed" that it was gavelled through before more arguments could be heard.

In a plenary session late on Saturday night, Cop29 President, Mukhtar Babayav said "time is not on our side". He urged negotiators to step up engagement with one another and "to bridge that remaining divide."

Key players had rejected a $1.3 trillion proposal presented by Azerbaijan on Friday. The plan aimed to establish a $250 billion annual minimum to fund the fight against climate change, to be arranged by wealthier nations—far below the amount requested by developing countries.

The Alliance of Small Island States (Aosis) earlier walked out of negotiations which they said were "not offering a progressive way forward." Small island developing states and least developing countries are among the worst impacted by the climate crisis.

Aosis chair, Minister Cedric Shuster said that its calls have been continuously ignored. "After this Cop29 ends, we cannot just sail off into the sunset. We are literally sinking."

Brazil's Minister of the Environment and Climate Change, Marina Silva has questioned why the value of financing was only put forward in the final hours of the summit. In place of the $250 billion core proposed in the latest text, Brazil wanted to push the figure to $300 billion until 2030, and $390 billion until 2035.

Climate activists used a rally on Saturday to urge developing countries to “hold the line” in the talks. Haneen Mahmoud Ali Hamed, a delegate from Climate Action Network’s Arab world branch, said the global south was “asking for reasonable numbers”.

“It’s not a lot. It’s our right,” she said. “We are asking for trillions – these trillions they are spending on nonsense. Wars, taking our resources… but they don’t want us to take the trillions that we deserve.”

Carbon market win for Cop29

The Cop29 presidency has managed to end the decade-long wait for the conclusion of negotiations on high integrity carbon markets.

Known Article 6 under the 2015 Paris Agreement - the aim was to provide transparent carbon markets for countries as they collaborate to reach their climate goals. It allows nations to transfer carbon credits earned through emission reductions to assist in meeting their climate targets.

This cross-border cooperation is expected to reduce the cost of implementing countries’ national climate plans by up to $250 billion per year.

“Today, we have unlocked one of the most complex and technical challenges in climate diplomacy." said Cop29 Lead Negotiator Yalchin Rafiyev. "Article 6 is hard to understand, but its impacts will be clear in our everyday lives. It means coal plants decommissioned, wind farms built and forests planted. It means a new wave of investment in the developing world.”

The outcome was a hard-earned achievement. Although the Glasgow and Sharm El-Sheikh Cops succeeded in establishing key rules and procedures for carbon markets, the final components of Article 6 were left unresolved. Leading up to Cop29, these negotiations had reached a standstill, causing a significant delay in the full implementation.