COP29 in Baku, Azerbaijan ended two days ago. The outcomes of the conference did not please everyone, especially developing parties. The agreed amount of the NCQG, $300 billion per year by 2035, is not welcomed by developing parties as the agreement is far less than the more than $1 trillion developing nations sought.

It is a reality that the agreed NCQG does not adequately address the current climate needs of developing countries or align with scientific recommendations which show rapidly narrowing policy space to address climate change and realize the targets set in the Paris Agreement.

Climate change is a very challenging topic in terms of aligning scientific findings with actionable policy frameworks. The new $300 billion goal is not enough, but it should be acknowledged as an important milestone to continue global efforts toward a safer future. One of the welcoming points regarding the NCQG is that it acknowledges the fiscal constraints and increasing costs to adapt to the adverse effects of climate change for developing countries. The document also acknowledges the need for public and grant-based resources and highly concessional finance, particularly for adaptation and responding to loss and damage in developing parties.

The NCQG also calls on all actors to work together to enable the scaling up of financing to developing countries for climate action from all public and private sources to at least $1.3 trillion per year by 2035.

So, what’s next? What should we expect from developed and developing countries to do at least until COP30?

Finance is an essential condition for the development and mobilization of climate action in developing countries. However, adaptation and mitigation funding in these countries require comprehensive structural and institutional reforms. The costly transition process will also require time to influence the behavior of both the population and institutions. Therefore, it is also important to place greater emphasis on implementing and supporting capacity-building initiatives and actionable policy measures in developing countries.

Countries at all stages of economic development may seek to improve the well-being of citizens and reduce their exposure to climate vulnerabilities, but their development priorities reflect different contexts. The climate finance allocation should consider the structural characteristics of national economies and the varying degrees to which investments can accelerate development and enhance resilience to climate change in these countries. Grant-based public funds provided by developed countries are not sufficient and will never be sufficient to address climate vulnerabilities. The private sector is essential for mobilizing and allocating significant climate finance to address these vulnerabilities, although the adequacy of the amounts and criteria for sufficiency remains uncertain. While recognizing the importance and ethical basis of advocating for common but differentiated responsibilities in climate negotiations, my observations at COP29 revealed that this approach often proved unproductive for developing countries. The divide between developed and developing countries on these issues appears insurmountable. Developing countries should make more efforts to implement structural reforms to attract foreign investment and facilitate adaptation and mitigation.

During COP29, I participated in numerous side events organized by the World Bank, IMF, OPEC Fund, Asian Development Bank, and European Union on green energy transition, adaptation, and mitigation financing challenges. These events provided me with a nuanced understanding of the climate finance challenges. The real policy challenges in addressing climate vulnerabilities lie in developing sustainable electrification strategies, establishing robust financial mechanisms to attract investments, and implementing comprehensive structural transformation policies.

Climate action’s success does not depend on the NCQG and endless negotiations to determine who bears historical responsibility for climate change. The success of COPs and global climate action is primarily associated with adopting and implementing actionable policy frameworks on supranational and national levels. Climate finance is essential to global climate action, but it is not a panacea. Targeted and ambitious policy actions are critical to addressing climate vulnerabilities.