COP29: Hopes dim for climate finance deal after Trump win

Expectations for meaningful progress on a global climate finance target at the forthcoming UN Climate Change Conference in Baku, Azerbaijan, have suffered a setback following the election of Donald Trump as president of the US for a second term on Nov. 5.

World leaders were aiming to build a New Collective Quantified Goal (NCQG) for climate financing at COP29, replacing the $100 billion/year fund established as part of the Paris Agreement in 2015. But with president-elect Trump likely to exit the Paris Agreement for the second time, Baku's summit goals have been thrown into doubt.

Bob McNally, founder and president of consultancy Rapidan Energy Group, said a Trump victory would have immediate ramifications.

"I see sweeping changes to our climate policy. Not only will the president leave the Paris Agreement, but I think there is also a real discussion about leaving the United Nations Framework Convention on Climate Change. So, there could be no more US at COP," he said at the Adipec conference in Abu Dhabi on Nov. 6.

Leadership vacuum

Analysts at S&P Global Commodity Insights also predict limited progress at COP29, foreseeing "weakening ambition on the negotiations around the new climate finance goal," with a second Trump term reversing existing commitments.

"While the US withdrawal from the Paris Agreement would be impactful, a withdrawal from the UNFCCC would likely have much more significant ramifications for both international climate negotiations and geopolitical relations beyond the climate space," Commodity Insights said in a note Nov. 6.

This would further erode trust between the US and developing countries, creating a leadership vacuum, "and potentially fracturing one of the most stable areas of ongoing engagement between the United States and China," it said.

The US, the second-largest emitter of greenhouse gases globally, has been at the forefront of climate diplomacy in recent years, with the Biden administration driving a whole-of-government effort to mitigate global warming.

A Trump administration, however, is likely to pare back greenhouse gas emission controls on the gas, oil, coal, power and auto sectors, prioritizing domestic production.

"There are only a small number of Republicans who feel that we should be fully engaged on climate... they are in the minority and really have no input in the Trump administration as advisors and campaign advisors," said McNally.

Progress on climate action globally would not be undone by Trump's victory, however, while the economics of the transition has changed since 2016 when Trump was first elected.

"Delegates going to Baku will remind themselves that [Trump] did not manage to halt global progress on tackling climate change during his first term; he did not even technically manage to withdraw from the Paris Agreement," the non-profit Energy & Climate Intelligence Unit said.

Further, the costs of clean energy solutions had plummeted "as markets and governments around the world invest heavily in them, creating jobs and reducing consumer costs as a result," the unit said.

New finance target

A substantive NCQG framework with a draft negotiating text for consideration at COP29 has already been released, laying the groundwork for talks.

However, a consensus on the scope and structure of the NCQG has not been reached due to deep divisions between developed and developing countries.

Developing nations have repeatedly stated they are unable to pledge further climate action unless they receive sufficient funds from developed countries.

Some developed nations, however, have shown reluctance to ramp up finance, saying they need to see the investment is being leveraged adequately.

There is also debate over the role of wealthier countries such as China, the UAE and Saudi Arabia, and whether they should contribute to climate finance regardless of technical definitions of which countries constitute the developed and developing world.