Trump Win Upends the Fight for Climate Cash at COP29

This year’s United Nations’ climate talks were never going to be easy.

The world is in the midst of two major wars in Ukraine and the Middle East. COP29, as the summit is known, is being held in Azerbaijan, a petrostate with little to show in the way of climate negotiations over the last 30 years of talks. The overriding objective is an issue that no one enjoys talking about — money — at a time when the rich world is grappling with inflation, constrained budgets and rising populism.

And then Donald Trump, a man who has vowed to take the US out of the landmark 2015 Paris Agreement once again, was elected president. His presence will loom over negotiators, even though he won’t be at the UN conference in person.

“Donald Trump’s dramatic victory in the US election will drip poison” into the climate talks, said Victoria Cuming, head of global policy at BloombergNEF. “Trump’s vow to pull out of the Paris deal and perhaps the entire UN process will widen a divide between industrialized economies and developing ones, adding the potential to undercut progress at subsequent meetings.”

What was expected to be a bitter fight over money has now turned into something much more existential: whether the rest of the world can take any meaningful action now as temperatures look destined to surpass key thresholds that put future habitability of the planet at risk. Emissions from burning coal, oil and natural gas are already on course to top last year’s record with some hope the world has reached a peak.

Scientists have warned the world is in a critical decade to turn the tide against rising emissions — a goal increasingly at odds with Trump’s pledge to boost fossil fuel production and shun global climate cooperation.

Even before Trump’s victory, one veteran COP negotiator described this year’s talks as the most difficult since Paris in 2015, which for the first time set a goal to limit the rise in global temperatures.

The summit is scheduled to run from Nov. 11-22. Here’s what to watch over the next two weeks:

Trump Fightback

One of the most pressing questions for negotiators is how they respond to Trump’s election victory and the prospect of losing the world’s biggest economy in the fight against climate change.

The good news is veterans of the COP process know what to expect. They were gathered in Marrakesh, Morocco when he won in 2016 and were quick to pledge their commitment to the goals laid out by the Paris Agreement, agreed just the year before. The accord sets a target for keeping global warming to well below 2C above pre-industrial levels, and ideally no more than 1.5C, before the end of the century.

The bad news is the threat is worse this time as it comes during a pivotal decade, where emissions need to start falling faster than what many countries say they can do. Trump’s position has also become more extreme: not only does he want to pull the US out of Paris, he may also try to pull the country out of the convention that underpins climate talks.

Multiple efforts are underway to show that the rest of the world remains committed to the Paris Agreement, similar to the solidarity shown in Marrakesh, according to people familiar with the matter. The question is whether that will be enough to make up for a lack of action from the world’s second largest greenhouse gas emitter.

“There are a range of global problems that need to be solved and that clearly require American leadership,” Wopke Hoekstra, the European Union’s climate chief, told reporters. We will work very closely “with our American friends to make COP into a success, even if it is only going to be a success of sorts.”

Climate No-Show

A fresh commitment to climate may also fall on deaf ears if no one shows up. Few world leaders are expected to make an appearance in Baku, compared with previous years.

Take Europe for example. German Chancellor Olaf Scholz will no longer attend COP29 as he grapples with a political crisis at home. French President Emmanuel Macron had already planned to give the summit a miss, while European Commission President Ursula von der Leyen decided to stay home as she prepares for a second term at the helm of the EU. That’s not a good look for the world’s most climate-ambitious continent.

The island nation Papua New Guinea is boycotting the talks altogether, with its foreign minister calling them a “total waste of time,” while other big names to skip the trip to Baku include Brazil President Luiz Inacio Lula da Silva, US President Joe Biden, Chinese Premier Xi Jinping and IMF chief Kristalina Georgieva.

A Big Number

The primary objective of this year’s climate talks is to come up with a “New Collective Quantified Goal” on climate finance. This is designed to replace rich countries’ existing target to provide $100 billion per year to poor countries to help support their green transition and resilience to increasingly extreme weather events.

There will likely be a bigger number announced at COP29, possibly in the trillions of dollars per year, to meet the needs of developing countries. There is growing momentum behind the idea of a multi-layered approach, meaning much of the pledged money wouldn’t just come from rich countries’ treasury accounts, but also the private sector and multilateral development banks. How countries incentivize those parties to contribute will be a key detail that determines the credibility of any big promise made on finance.

Developed nations will be pressured to pledge far more public money than what they currently contribute. The Arab group of countries have suggested a figure of $441 billion at the heart of any new goal, but that’s likely to be too much for rich world negotiators to stomach given their already stretched budgets.

Also, watch out for the demands of small island states, a powerful bloc in COP climate talks. Countries like the Bahamas want to ensure that there’s money to help them to not just transition, but to adapt to increasingly frequent hurricanes and rising sea levels.

Will China Pay Up?

One of the biggest fights this year will be over whether new countries — and in particular China — should join the climate finance donor pool. This has become a more urgent debate as the EU, the biggest provider of climate finance, is cash-strapped, and the US, which has never been dependable with this type of aid anyway, isn’t likely to become more generous any time soon. For years the EU and US have wanted China, now the world’s biggest emitter, to pay up. As Hoekstra put it: If China can go to the moon, why isn’t it paying more toward climate action?

Beijing has been set on defending its status as a developing nation, which means it doesn’t meet donor criteria, and it’ll likely continue fighting this position. But there is some hope China will come to this COP in a more giving mood in light of the US election. China could step up and take a leadership role on climate now that the US looks likely to relinquish its crown. Conversely, it could use Trump’s victory as an excuse for it to take less action to curb fossil fuels.

Carbon Markets Deal

One area where a deal is close and should be agreed at this year’s summit are rules on trading carbon credits bilaterally and through a new global crediting mechanism under the UN. If the talks on what’s called Article 6 succeed, it will be no small breakthrough with the issue having been logjammed since COP26 in Glasgow. Negotiators still need to agree standards on removals, including how to handle events where carbon is leaked back into the atmosphere.

The hope is that the new mechanism will act as a gold standard, helping countries meet their climate goals at an affordable cost, while also putting pressure on global voluntary carbon markets to boost their own integrity.

Climate Plans

One area where China has the opportunity to show ambition is through its next climate pledge, known in COP parlance as a Nationally Determined Contribution. Countries need to come forward by February next year with economy-wide targets to slash greenhouse gas emissions by 2035. A few front runners are expected to deliver theirs at COP29. The UAE has already done so, while the UK and Brazil are planning to during the summit.

“Ironically, Trump’s win can inject new urgency and determination of countries to agree a meaningful outcome,” said Linda Kalcher, executive director at Strategic Perspectives, a European think tank. “Trump won’t change economics and countries’ self interest to transform their economies.”

US officials have said their NDC will be released by the end of the year, and it could come during COP29, though the pledge would be based on current climate policies that Trump is intent on undoing.

Fossil Fuels

For the first time at last year’s COP28 summit in Dubai, countries agreed to transition away from fossil fuels. But the strength of that commitment remains vague, especially if it is not followed up on this year.

Saudi Arabia, for example, sees the agreement as one component of a “menu” of possible options. Trump’s determination to drill for more fossil fuels further undermines the goal and gives cover for climate skeptics to press the brakes on climate ambition. Azerbaijan’s President Ilham Aliyev called his country’s fossil fuels a “gift from god” earlier this year, even though his country was due to host COP29.

The summit is supposed to focus on finance, so don’t expect any big new pledges to curb fossil fuels. Ambitious countries will be keen to solidify what was agreed last year by making attempts to keep track of the progress towards those goals.

Meanwhile, watch out for energy business on the sidelines. A senior COP29 official was secretly filmed discussing potential fossil fuel deals, the BBC reported. Azerbaijan is in talks to keep gas flowing through Ukraine to Europe. A number of business leaders are also expected to attend, including Exxon Mobil Corp.’s Darren Woods.

“The outcome of the US elections should not be used as an excuse by world leaders to avoid taking action against climate change,” said Mary Robinson, former Irish president and member of The Elders, a group founded by Nelson Mandela. “It will only bring more death and devastation.”