BAKU— As the international community gears up for the 29th Conference of the Parties (COP29) in Baku, the focus intensifies on new strategies in climate finance, seen as crucial for the success of not only this meeting but also for future climate change initiatives.
According to Trend News Agency, the upcoming discussions at COP29 are set to emphasize the integration of a broader financial framework crucial for overcoming fiscal constraints that hinder countries’ development and climate action efforts. Experts are calling for the implementation of an effective public debt management framework to allow countries to better manage financial challenges. Additionally, the establishment of a new climate finance target is anticipated, necessitating enhanced support from multilateral development banks to provide the low-cost, long-term financing essential for transitioning to a low-carbon economy.
These financial mechanisms include a variety of sources and instruments such as public and private funds, national and international investments, and bilateral or multilateral support. Tools like grants, green bonds, debt swaps, and soft loans will be crucial for funding both mitigation efforts and adaptation to climate impacts.
On the sidelines of COP29, significant attention is also directed toward developing countries through multilateral funds like the Green Climate Fund (GCF), the Global Environment Facility (GEF), and the Adaptation Fund (AF), which play pivotal roles in supporting these nations’ climate initiatives.
Highlighting new initiatives, Azerbaijan has proposed the establishment of a $1 billion Climate Finance Action Fund (CFAF), aimed at supporting climate projects in developing countries. This fund, intended to be capitalized by contributions from fossil fuel-producing countries and related companies, will facilitate investments and reduce risks in climate projects, ensuring support for national commitments to maintaining global warming within 1.5°C.
Prominent figures such as Sue Biniaz, US Presidential Deputy Special Envoy for Climate Affairs, and Fatih Birol, Executive Director of the International Energy Agency (IEA), have voiced the critical need for increased climate finance. Biniaz highlighted the US’s focus on a trilateral event with China and Azerbaijan addressing non-carbon gas emissions, while Birol stressed the disparity in clean energy financing between developed economies and developing countries, pointing out the urgent need for mechanisms that guarantee such financing for the latter.
Furthermore, the recent establishment of a Loss and Damage Fund at COP28 underscores the ongoing commitment to supporting vulnerable countries, with major economies pledging significant contributions. This fund exemplifies the critical role of climate finance in adapting to and mitigating the impacts of climate change.
With these discussions and initiatives, COP29 is poised to be a pivotal moment in defining the future of global climate efforts, particularly through the lens of financial strategies that support low-income countries most susceptible to the adverse effects of climate change.