By Valerie Volcovici and Nailia Bagirova
BAKU (Reuters) – Annual U.N. climate summit begins Monday (NASDAQ:) with countries bracing for tough talks on finance and trade, following a year of climate disasters that have emboldened developing countries in their demands for climate money.
Delegates meeting in Baku, Azerbaijan’s capital, hope to resolve the summit’s top agenda item: a deal for up to $1 trillion in annual climate finance for developing countries.
However, the summit’s negotiating priorities compete for resources and governments’ attention against economic concerns, the wars in Ukraine and Gaza and the US re-election last week of Donald Trump, a climate change denier, as president. of the largest economy in the world.
COP29 host Azerbaijan will be tasked with keeping countries focused on agreeing a new global financial target to replace the current $100 billion commitment that expires this year.
The Caspian Sea nation, often proud to be home to the world’s first oil wells, will also be under pressure to show progress on last year’s COP28 commitment to abandon fossil fuels.
The country’s oil and gas revenues accounted for 35% of its economy in 2023, up from 50% two years earlier. The government says these revenues will continue to decline, to about 32% of its GDP this year and 22% by 2028.
Before summit talks can even begin, countries will have to agree on a consensus agenda, including a last-minute proposal by China to throw trade disputes into the mix.
The Chinese proposal, made on behalf of the group of rapidly developing “BASIC” countries including Brazil, India and South Africa, called for the summit to address “restrictive trade measures” such as the EU’s carbon border tariffs that will come into force in 2026.
Those concerns have been compounded by Trump’s campaign promise to impose tariffs of 20% on all foreign goods and 60% on Chinese goods.
China’s request showed it was wielding power following Trump’s reelection, signaling the United States’ likely withdrawal from global climate cooperation, said Li Shuo, director of the China Climate Center at the Asian Society Policy Institute.
Trump called climate change a hoax and vowed to withdraw the United States from the Paris Agreement, the global treaty to reduce planet-warming emissions.
The European Union, along with the administration of current US President Joe Biden, has been pressuring China and Gulf oil nations to join the group of climate finance donor countries.
“If the EU wants to talk about climate finance with China, if it wants to talk about NDC, part of the conversation should be how to resolve our differences on trade and tariffs,” Shuo said.
EXTREME PRESSURE
With this year on track to be the hottest on record, experts said climate extremes were now challenging rich and poor countries alike – from flood disasters in Africa, coastal Spain and the US state of North Carolina. North, to droughts that devastated South America, Mexico and the western United States.
Most countries are not prepared.
“The election results do not alter the laws of physics,” said Kaveh Guilanpour, vice president of international strategies at the nonprofit Center for Climate and Energy Solutions.
“Unless the world collectively steps up its efforts, the impacts of climate change will become increasingly severe and frequent and will be felt by an increasing number of people in all countries, including the United States.”
Many in Baku worried that a U.S. withdrawal could lead other countries to backtrack on past climate promises or scale back future ambitions.
“That’s definitely a risk. People will say, well, the United States is the second largest emitter. It’s the largest economy in the world… If they don’t set an ambitious goal, why would we?” Marc Vanheukelen, EU climate ambassador from 2019 to 2023, told Reuters.
GAS GIFT
Azerbaijan has spent the last year pressuring governments to accelerate its transition to clean energy, while promoting gas as a transition fuel.
After Azeri President Ilham Aliyev called its fossil fuel largesse “a gift from God,” Azerbaijan has proposed creating a Climate Finance Fund. Action (WA:) Fund to voluntarily raise up to $1 billion from extractive companies in 10 countries, including Azerbaijan.
This year, the country’s gas exports to Europe are expected to exceed 12 billion cubic meters, up from 11.8 billion cubic meters last year, as Europe seeks to reduce its dependence on Russian gas.
The country’s chief negotiator at COP29, Deputy Foreign Minister Yalchin Rafiyev, said gas remains a key part of the energy mix for countries with limited alternatives.
“In this context, we must intensify our efforts to align use with greenhouse gas reduction targets,” Yalchin told Reuters.
Environmental groups and climate scientists have criticized the promotion of gas as a clean energy option, pointing out that it is a fossil fuel that pollutes the climate.
Presidential aide Hikmet Hajiyev said that with its buildup of renewable energy, Azerbaijan was “moving from fossil fuel exports to green electricity exports.” The country aims for renewable energy to power 35% of its power plant capacity by 2030. Last year, this figure was around 20%.
Azerbaijan has also fought criticism for imprisoning political prisoners, including journalists and ethnic Armenians whom Azerbaijan describes as separatist leaders.
Azerbaijan’s Aliyev rejected the criticism and warned that it could undermine fragile peace negotiations between the two former Soviet republics.