COP30: Can the Baku-To-Belém Roadmap Put Global Climate Finance on the Right Path?

Photo: Markus Spiske, Licence: Public Domain

The process to develop the Baku-To-Belém Roadmap is a joint effort by the outgoing Azerbaijani COP29 presidency and the incoming Brazilian COP30 presidency. The Roadmap, set to be presented at COP30, seeks to lay out a plan to mobilize 1.3 trillion US dollars annually by 2035 for developing countries’ climate action, but risks becoming a non-binding report with limited impact, follow-through and accountability. This short version of a recent analysis by the Heinrich-Böll-Foundation highlights the main challenges for the upcoming climate change negotiations.

Disappointing NCQG Decision

The 300 US dollars billion NCQG goal agreed at COP29 was far below needs, weakening developing countries’ trust in the climate process and diluting developed countries’ finance obligations under the UNFCCC and Paris Agreement. Many have derided it as a weakening of developed countries’ obligations under the climate convention – the decision just commits them to ‘taking the lead’ in mobilizing the 300 billion US dollars instead of clearly outlining their responsibility to provide the public funding – and the abdication of the grand bargain struck in Paris that mandates developed countries to help developing countries with the financial support needed to implement their increased emission reduction commitments in national climate plans. Rather than building trust in the climate process, the NCQG decision in Baku further weakened multilateral climate process with the UNFCCC.

Centrality of Public Support

Developing countries have long maintained that as a matter of equity, and in line with the core principle of the global climate regime of common but differentiated responsibilities and respected capabilities (CBDR-RC), developed countries in acknowledging their historic responsibility for run-away greenhouse gas emissions should provide most finance under the NCQG goal, including a substantial core of the Baku-to-Belém Roadmap, as public finance. In contrast, developed countries have pointed to changed geopolitical realities as reasons why they cannot significantly increase their financial support, while urging to expand the contributor base for fulfilling the NCQG by pointing to the increased financial power of many emerging market economies. Their panacea is to push for the private sector to fill the widening funding gaps, including by demanding developing countries do more to create the domestic enabling environment through regulatory frameworks and establishing country platforms to attract and facilitate increased private investment flows. COP30 is thus likely to see a repeat of an agenda fight at this year’s Bonn session. Against this backdrop, the Baku-to-Belém Roadmap is likely to fall short of expectations on several fronts as there are weaknesses both regarding procedures and content.

Procedural Shortcomings of Roadmap

Procedurally, the NCQG decision from Baku only envisions the delivery of a report by the COP29 and COP30 presidencies in Belém summarizing the work they have undertaken over the past year, but not the clear action plan with measurable targets and indicators, concrete time-lines, and outlining responsibilities of different actors as well as transparent accountability mechanisms that many feel is needed. This impacts the usefulness of the Roadmap if it wants to be more than just another shelved report. On the one hand, without some form of COP30 consensus decision on at least some elements or recommendations from the Roadmap, such as potentially as part of an overall COP30 package in a cover decision, there is no guarantee that concrete actions will follow, let alone transparency and accountability through reporting and monitoring on when and by whom potential actions are taken. On the other hand, many countries as well as civil society observers have raised questions about the lack of transparency and inclusivity of the Roadmap development process.

Under the initial workplan for the Roadmap and its update, the two presidencies included consultations with and outreach to countries and as well as observers, such as during the Bonn climate negotiations in June and on the side-lines of other meetings such as the climate weeks in London and New York. They also invited written submissions in two rounds by Parties. It is not clear, however, what the combined weight of those formal submissions will be in influencing the Roadmap report, given that there are other inputs specifically commissioned by the Brazilian COP30 presidency, which also commissioned a report by the COP30 Circle of Finance Ministers. While the Brazilian COP30 Presidency maintains that the COP30 Circle of Finance Ministers’ report, which was published during the IMF/World Bank Annual meeting in mid-October, will just be ‘one input’, it is hard to believe that its recommendations and findings will not get elevated consideration in the final Baku-to-Belém Roadmap expected to be released just before COP30.

Can the Roadmap Center Equity and Justice?

Substantively, the Baku-to-Belém Roadmap is likely to disappoint those hoping that it firmly frames its recommendations in equity and justice. First and foremost, the Roadmap should provide more clarity on the 300 billion US dollars NCQG core target of annually mobilized climate finance by 2035, including with respect to important elements not addressed in the NCQG decision. One missing element is a shared methodology for the grant equivalency of concessional loans (which are under the outgoing US$100 billion goal counted at full nominal value), thus not taking into account that a substantial amount of climate finance provided as debt, even at concessional rates, will flow back to developed countries. Most importantly, the Roadmap should clarify the role and scale of provision of public finance by developed countries and disaggregating the goal for mitigation, adaptation and for addressing loss and damage respectively. The NCQG decision clearly acknowledged the need for scaling up public and grant-based resources and highly concessional finance for developing countries particularly for adaptation – where the annual gap for fulfilling needs is estimated by some at 215 – 387 billion US dollars – and for responding to losses and damages.

Centering public finance in the Roadmap not just in terms of quantity, but also quality of how that finance is accessed and disbursed would also require further elaboration of a plan for tripling the outflows of multilateral climate funds (MCFs) under the UNFCCC and Paris Agreement from 2022 levels by 2030 as mandated in the NCQG decision MCFs in particular have also the capacity to reform their delivery systems in the short run to increase the quality, equity and effectiveness of their climate finance delivery to benefit for example Indigenous Peoples, women and gender-diverse groups, or migrants and workers. The Roadmap should thus address another shortcoming of the NCQG decision by further elaborating and calling on the MCFs to adopt pathways for increasing, simplifying and enhancing direct access, including through devolved financing mechanism and decision-making, such as via small grant approaches.

Whether these priorities highlighted in many submissions by developing countries and civil society will make it into the Roadmap is far from certain. It will center prominently on ways to mobilize private capital, including as the core tasks of public climate finance actors such as the MCFs and MDBs in using public resources to de-risk private sector investments through underwriting guarantees or blended finance structures in public-private partnerships, where the public sector takes first losses – and might be saddled with debt and even further reduced fiscal space if they fail. Such approaches are increasingly pushed not just for mitigation, but also for adaptation, including through insurance and risk-pooling structures despite concerns of diminishing affordability and insurability of such schemes. The reform of the MDBs, a priority agenda of the Brazilian G20 Presidency in 2024, is bound to receive increased attention in the Roadmap, including by making them ‘bigger’ through efforts to optimize their balance sheet through adjustments to their the capital adequacy framework, which MDBs claim would allow them to increase their lending by up to 400 billion US dollars over the next decade.

Critical issues under-addressed in the NCQG risk being further sidelined instead of uplifted: adaptation and loss & damage funding gaps, equity and justice principles, the quality of climate finance including improving concessionality and access, debt relief, and exploring innovative public finance sources (polluter-pays taxes, fossil fuel subsidy removal, wealth taxes).

Key Recommendations:

1. Center public finance provision from developed countries, with clear targets for mitigation, adaptation, and for addressing loss & damage.
2. Establish accountability mechanisms (binding timelines, clear responsibilities, monitoring, reporting) to move beyond a shelved report.
3. Scale multilateral climate funds (MCFs) and expand grant-based, concessional finance with simplified direct access for vulnerable communities and locally led initiatives.
4. Adopt innovative financing tools – polluter-pays levies, subsidy reforms, wealth and profit taxes – to generate predictable new public resources.
5. Advance structural reforms in the global financial system: debt cancelation and improved debt sustainability frameworks, fairer global taxation regimes and credit rating practices, and stronger developing country representation in the IMF/World Bank.
6. Ground the Roadmap in equity and justice, ensuring support prioritizes marginalized communities and aligns with the principle of common but differentiated responsibilities (CBDR).

Liane Schalatek, Heinrich-Böll-Foundation Washington D.C

Further reading: The full article can be found here.