The Question Looming Over COP29: Who’s Rich Enough To Pay for Climate Change?

The world’s governments have come to the United Nations’ climate summit in Baku, Azerbaijan, deadlocked on one ugly question. It has been debated for years, but now they need to find an answer in a matter of weeks; trillions of dollars’ worth of international climate aid hang in the balance. That money could mean the difference between life and death for some of the world’s poorest and most vulnerable people on the front lines of the climate crisis.

Everyone at the COP29 climate summit agrees that the world’s poorest and most climate-vulnerable countries need trillions of dollars to transition to clean energy and cope with climate-fueled disasters. And everyone agrees that rich countries, which are responsible for a disproportionate share of historic carbon pollution, have some responsibility to pay up for this. 

But the question nobody can seem to agree on is this: Which countries are rich?

As financial needs balloon, longtime wealthy nations in North America and Europe are clashing with newer global power players like China and Saudi Arabia over whether nations such as the latter should be required to provide aid funding. The United States and the European Union are pushing for a strict standard that would commit large new economies like China to donating, reflecting how much richer those countries have gotten in recent decades, but a broad coalition of developing countries is fighting to keep such language out of the deal. 

World leaders spent the first few days of COP29 making dozens of grand speeches in which they stressed the need for ambitious action and global cooperation. But now negotiators are diving into tense, complex talks over the funding question, with the goal of coming to an agreement by the time COP29 wraps up at the end of next week. As of Friday, they were still working through a sprawling 33-page document that the U.N. negotiating leads assembled, which contains a mishmash of priorities from almost every country in the world. Country representatives and advocates present at COP told Grist that these talks have been the most difficult since those that led to the landmark 2015 Paris Agreement, in which the world agreed to limit global warming to below 2 degrees Celsius.

“There’s no contention about the magnitude of the amounts required for the global community to transition,” said Ali Mohamed, the lead climate envoy for Kenya and head negotiator for a large group of African countries. “I think the big challenge is the attempt to redefine the commitments,” he added, referring to attempts by developed countries such as the United States to offload some of their financing burden onto newly rich countries.

The battle lines were drawn more than three decades ago, in the 1992 agreement that first established COP as the forum for annual U.N. climate talks. That agreement divided the world’s countries into “developed country parties” and “developing country parties.” It stipulated that the former would “provide new and additional financial resources” to help poor countries decarbonize and also “assist … in meeting costs of adaptation” to climate change. The “developed” group comprised the richest few dozen countries in North America and Europe, as well as Japan and Australia, and the “developing” group comprised almost the entire rest of the planet.

The world has changed a great deal since then. China and India have become two of the world’s five largest economies and together make up almost a third of the world’s population. East Asian countries like Singapore and South Korea have become pillars of the global technology and manufacturing sectors — and grown phenomenally richer in the process. Persian Gulf countries like Saudi Arabia and the United Arab Emirates have used money from their massive oil fields to build some of the world’s most eye-popping infrastructure and buy global influence. As a result of all this change, only 13 of the world’s 20 largest economies were considered “developed” at the time the U.N. convention first took effect.

For incumbent developed countries like the United States and Canada, which are facing calls to commit to sending a trillion dollars per year to poor nations, the key question in Baku is how to bring newly flush economies over to the donor side of the table. While many of the newcomers have already made voluntary contributions to international climate aid — China kicked off the conference by announcing it has provided more than $20 billion in climate finance to developing countries since 2016 — they have largely resisted any official recognition that they have a responsibility to contribute.

“You have countries now that are not part of the donor base, but that are contributing and helping countries in the [Global South],” said Steven Guilbeault, the Canadian minister for the environment, in an interview with Grist. “But I think one of the issues there is: What are the accountability mechanisms for that? What’s the transparency?” (China’s announcement didn’t include a detailed breakdown of its commitments.) 

In an addendum tacked on to the bottom of the most recent negotiating text, the Canadian and Swiss governments have proposed a blunt solution to this problem: a hard numerical standard that would determine which countries have to donate funds. There are two triggers that would make a country a required donor. The first is if the country is both among the top 10 annual emitters of greenhouse gases and has a gross national income of more than around $22,000 per capita, adjusted for purchasing power differences across currencies. The second is if a nation has cumulative carbon emissions of more than 250 metric tons per capita and a gross national income of more than $40,000 per capita.

This sounds somewhat arbitrary until you look at which countries become donors under each of the proposed standards. Among the top 10 annual greenhouse gas emitters, six are not already considered “developed.” In descending order of per capita income, according to the World Bank, they are Saudi Arabia, South Korea, China, Iran, Indonesia and India. The income threshold in the Swiss-Canadian proposal would bump the first two from that list into the group of required donors. And while China is right below the income threshold, it could qualify as soon as next year. The last three countries, which are populous but less well-off, would be off the hook for the near future.

That captures the big fish. The second condition, which assesses income and emissions on a per capita basis, would rope in smaller developed countries with higher income levels, such as the United Arab Emirates, Singapore and Israel. (The Swiss delegation did not respond to questions about their proposal in time for publication.)

But negotiators from around the world are lining up against this proposal, and many say they oppose any attempts whatsoever to broaden the donor base. The Persian Gulf states in particular have slammed the formula as a betrayal of responsibility by the United States and Europe, which are the largest emitters in historical terms — meaning their cumulative contributions to climate change are greater than even annual emissions figures suggest. The objectors also argue that these countries’ centuries-long head start on development, provided in part by their colonial history, should be a determining factor in who has to pay up.

In a statement at the last government dialogue on the goal, a few months before COP29, a representative for Saudi Arabia said that Arab states “firmly reject” what it called “attempts to walk back on our collective agreement.”

“The claim that changing economic realities necessitate an expansion of the donor base is unfounded,” the representative said at the time.

The Alliance of Small Island States, or AOSIS, an influential negotiating bloc that represents several nations facing existential risk from sea level rise, including the Marshall Islands, is also against the proposal. The group argues that such a change would compromise the original U.N. agreement to fight climate change, which called for legacy emitters to take the lead on climate finance.

“We really can’t entertain it,” said Michai Robertson, the island bloc’s lead negotiator on finance issues. “It’s a thread that you pull, and it may unravel the entire fabric of the Paris Agreement. It’s an unequivocal no.” He said that the text that all countries agreed to in Paris in 2015 already encourages developing countries to contribute financing if they can — and that countries such as China are already doing it.

There are also political considerations at play in the bloc’s opposition. In addition to vulnerable nations such as Fiji and the Marshall Islands, AOSIS also represents higher-income island states such as Singapore and the Bahamas. The latter would be expected to become contributors under the new proposal, which evaluates national income and emissions on a per capita basis.

The other big point of controversy is China, whose per capita income sits just on the threshold of the Swiss and Canadian proposals. One version of the Swiss-Canadian proposal sets the income cutoff at $20,000 per capita, which would include China, but another version sets it at $22,000, which would exclude China for at least a few years — an indication of just how delicate the question of the country’s inclusion might be. 

The opening day of COP29 saw negotiators stake out starkly different positions on the China question. Teresa Anderson, a climate advocate with the global anti-poverty organization ActionAid, said, “There is no metric by which China has a historic obligation,” calling it “geopolitical whataboutery” and “finger-pointing.” A few hours later, Germany’s lead climate negotiator, Jennifer Morgan, pointed out that China’s historical carbon emissions are now equal to those of the European Union.

The stark contrast in statements was evidence that, even after years of negotiation over the finance goal, the opposing sides of the debate have made almost no movement toward each other. The stalemate continued through the first days of the conference as developing countries rejected an early draft of the goal text, and U.N. supervisors released a massive new draft with a grab bag of priorities. Despite developing countries’ objections, the Swiss-Canadian proposal is still there, lurking at the bottom of the draft. 

Sandra Guzmán Luna, a former climate negotiator for the government of Mexico and the director of GFLAC, an organization that helps Latin American and Caribbean countries advocate for more climate money, said the road ahead was steep.

“It’s going to be very, very challenging, because there has not been a lot of movement,” she said.