Rich nations offer $300 billion annually after 10 years to Global South

The $300 billion figure, however, is a far cry from the $1.3 trillion the Global South has been demanding in the three years of talks

In a historic yet contentious outcome at COP29 in Baku, Azerbaijan, wealthy nations pledged to provide $ 300 billion annually by 2035 to help developing countries combat the escalating effects of the climate crisis.

Despite the agreement being lauded as a step forward, it drew sharp criticism from many vulnerable nations, which viewed the sum as inadequate given the enormity of the challenge, CNN reported.

The deal was reached after more than two weeks of heated negotiations, marred by boycotts and disagreements. Talks nearly collapsed when representatives from small island states and the least-developed countries walked out in protest on Saturday. However, after 30 hours of extended discussions, negotiators managed to finalise the agreement early Sunday morning.

Simon Stiell, head of the United Nations Framework Convention on Climate Change, described the deal as "an insurance policy for humanity," acknowledging the arduous process that led to its conclusion. "It has been a difficult journey, but we've delivered a deal," he said. The funding will assist poorer nations in managing devastating climate impacts and transitioning to clean energy.

The $300 billion figure falls significantly short of the $1.3 trillion economists estimate is required to address the crisis in developing countries. India's representative, Chandni Raina, condemned the amount as "a paltry sum" in a fiery post-agreement speech, calling the deal "nothing more than an optical illusion." Similarly, Tina Stege, climate envoy for the Marshall Islands, criticised the agreement for leaving vulnerable nations with "a small portion" of the funds they urgently need.

Stege also highlighted the obstructive role of fossil fuel interests in the negotiations, accusing them of undermining multilateral goals. "Fossil fuel interests have been determined to block progress," she said in a statement, reported CNN.

The new agreement commits developed countries, including the US and European nations, to provide $ 300 billion annually by 2035. While there is an aspiration to eventually scale up to $ 1.3 trillion, developing nations argued for a greater share of the funding to come from grants rather than loans, fearing debt entrapment.

The G77 group of developing nations had called for $ 500 billion annually, but wealthier nations deemed this unfeasible under current economic conditions.

Avinash Persaud, special advisor to the President of the Inter-American Development Bank, acknowledged the compromise, stating, "We have arrived at the boundary between what is politically achievable today in developed countries and what would make a difference in developing countries."

Efforts to include contributions from wealthier emerging economies like China and Saudi Arabia yielded little success. The agreement only "encourages" such countries to make voluntary contributions, without imposing any obligations.

Li Shuo, director of the China Climate Hub at the Asia Society Policy Institute, described the deal as "a flawed compromise," reflecting the difficult geopolitical landscape.

COP29 unfolded against the backdrop of a record-breaking year for extreme weather, with catastrophic events highlighting the urgency of climate action. However, the summit faced significant challenges, from its host country's status as a petrostate to the overwhelming presence of fossil fuel lobbyists.

More than 1,700 fossil fuel representatives attended the talks, outnumbering many national delegations. This prompted criticism from climate groups like Kick Big Polluters Out, which accused such interests of derailing meaningful progress.

The political climate further complicated negotiations. Saudi Arabia, a key oil exporter, openly rejected any mention of fossil fuels in the agreement. Meanwhile, the potential re-election of Donald Trump in the US loomed large, raising concerns about the future of global climate commitments.

The agreement has drawn widespread condemnation from climate activists and developing nations, CNN reported.

Friederike Otto, a climate scientist at Imperial College London, described the summit as "another shady, oil-stained COP," criticising the low public engagement and pervasive cynicism.

Tasneem Essop, executive director of Climate Action Network, accused developed nations of betraying the Global South. "This was meant to be the finance COP, but the Global North turned up with a plan to betray the Global South," she said.

Harjeet Singh of the Fossil Fuel Treaty Initiative echoed these sentiments, calling the outcome "false hope" for those already suffering the worst climate impacts. "We must persist in our fight, demanding a significant increase in financing and holding developed countries to account," he added.

Despite the criticisms, the agreement represents a fragile step toward addressing the global climate crisis. Yet, with mounting climate disasters and political challenges ahead, the path to meaningful action remains fraught with obstacles.