By Valerie Volcovici and Nailia Bagirova
BAKU (Reuters) – The annual UN climate conference begins Monday (NASDAQ:) and countries are preparing for tough financial and trade talks, following a year of climate disasters that have strengthened developing countries’ demand for climate finance.
Delegates gathered in Azerbaijan’s capital, Baku, hope to settle on the main topic of the conference’s agenda – an agreement on up to $1 trillion in annual climate finance for developing countries.
The important discussions of the conference, however, are competing for government resources and attention to economic concerns, the wars in Ukraine and Gaza and the US re-election of Donald Trump, who denies climate change, as the president of the world’s largest economy.
Azerbaijan, which will host COP29, will be tasked with keeping countries focused on agreeing to a new global monetary policy that will replace the current $100 billion pledge that expires this year.
The Caspian Sea nation, which often prides itself on being home to the world’s first oil reserves, will also be under pressure to show progress from last year’s COP28 pledge to shift away from fossil fuels.
The country’s oil and gas revenue will account for 35% of its economy by 2023, down from 50% two years ago. The government says this revenue will continue to decline, reaching around 32% of its GDP this year and 22% in 2028.
Before summit talks can begin, countries will need to agree on a consensus agenda – including China’s 11th-hour proposal to bring trade disputes into the mix.
China’s proposal – made on behalf of the fast-developing “BASIC” group of countries including Brazil, India and South Africa – called for the summit to discuss “restrictive trade measures” such as the EU’s carbon border tax that will come into effect in 2026.
Those concerns are compounded by Trump’s campaign promise to impose tariffs of 20% on all foreign goods — and 60% on Chinese goods.
China’s request showed that it was a dynamic force following Trump’s re-election, which indicated that the United States may not engage in global climate cooperation, said Li Shuo, director of the China Climate Hub at the Asia Society Policy Institute.
Trump has called climate change a hoax and vowed to withdraw the US from the Paris Agreement, a global agreement to reduce planet-warming emissions.
The European Union, along with the administration of current US President Joe Biden, has been pressuring the oil nations of China and the Gulf to join the group of countries donating climate finance.
“If the EU wants to talk about climate finance with China, if it wants to talk about NDCs, part of the discussion should be how to resolve our trade and tariff differences,” Shuo said.
HIGH PRESSURE
With this year on track to be the hottest on record, experts have noted that climate change is now challenging rich and poor countries alike – from catastrophic floods in Africa, the coast of Spain and the US state of North Carolina, to droughts in South America, Mexico and the US West .
Many countries are not good.
“Election results don’t change the laws of physics,” said Kaveh Guilanpour, vice president of global strategy at the nonprofit Center for Climate and Energy Solutions.
“Unless the world comes together and steps up its efforts, the impacts of climate change will be severe and frequent and will be felt by an increasing number of people in all countries, including the United States.”
Many in Baku were concerned that the US withdrawal could lead other countries to backtrack on past climate pledges or reduce future ambitions.
“That’s really dangerous. People will say, the US is the second biggest exporter. It’s the biggest economy in the world… If they don’t set themselves the goal of excellence, why should we?” Marc Vanheukelen, the EU’s climate ambassador from 2019 to 2023, told Reuters.
THE GIFT OF GAS
Azerbaijan has spent the past year urging governments to speed up their cleanup efforts while promoting gas as the fuel of the revolution.
As Azeri President Ilham Aliyev has called its oil profits “a gift from God,” Azerbaijan has proposed creating Climate Funds. Action (WA:) Voluntary fundraising fund of up to $1 billion from issuing 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 coordinator of COP29, Deputy Foreign Minister Yalchin Rafiyev, said that gas remains an important part of energy integration in countries with limited energy.
“In this context, we must strengthen our efforts to integrate consumption and greenhouse gas reduction goals,” Yalchin told Reuters.
Environmental groups and climate scientists have criticized the promotion of gas as a clean energy option, noting that it is a climate-polluting fuel.
Presidential aide Hikmet Hajiyev said that, with the development of renewables, Azerbaijan “moved from exporting fossil fuels to exporting green electricity.” The country aims to have renewable energy generating 35% of its installed capacity by 2030. Last year, this figure was around 20%.
Azerbaijan has also battled criticism over its jailed political prisoners, including journalists, and ethnic Armenians that Azerbaijan describes as separatist leaders.
Azerbaijan’s Aliyev dismissed the criticism and warned it could derail fragile peace talks between the two former Soviet republics.
