HQ Team
November 13, 2024: At COP29 in Baku, Azerbaijan, multilateral development banks (MBDs) announced a commitment to $120 billion in climate financing for low- and middle-income countries by 2030. The summit also focused on operationalizing the Loss and Damage Fund and addressing methane emissions.
Of this amount, $42 billion will be allocated specifically for adaptation efforts. Additionally, they aim to mobilize $65 billion annually from the private sector. For high-income countries, the collective financing is expected to total $50 billion, including $7 billion for adaptation.
The $120 billion in climate financing pledged by multilateral development banks (MDBs) for low- and middle-income countries will be allocated as follows:
- Total Allocation: The MDBs aim to provide a cumulative total of $120 billion annually by 2030. This represents a significant increase of over 60% compared to previous years, highlighting the urgency of climate action.
- Adaptation Funding: Out of the total, $42 billion is specifically earmarked for adaptation efforts to help countries cope with the impacts of extreme weather events. This amount reflects a 70% increase from 2023 levels, emphasizing the growing need for resilience against climate change.
- Private Sector Mobilization: The MDBs are also targeting the mobilization of an additional $65 billion annually from the private sector. This approach aims to leverage private investment alongside public funding to enhance overall climate financing.
- High-Income Countries: For high-income countries, the MDBs project an annual collective climate financing of $50 billion, which includes $7 billion allocated for adaptation efforts.
- Focus on Vulnerability and Need: The allocation will prioritize countries based on their vulnerability to climate impacts, their greenhouse gas emissions, and their capacity to implement effective climate policies. This approach aligns with principles of equity and fairness in addressing climate change impacts, ensuring that the most affected and least responsible nations receive adequate support
Commenting on the estimates, the COP29 President Mukhtar Babayev said: “Every contribution is welcome, but there is still a clear gap between where we are and where we need to be. We are working closely with the shareholders of international financial institutions at COP29 as we seek to build the foundations of a fair and ambitious new climate finance goal.”
Operationalizing the Loss and Damage Fund
The summit highlighted progress on the Fund for Responding to Loss and Damage, which is now ready to accept contributions following the signing of key agreements with the World Bank. This fund aims to assist vulnerable nations affected by climate-related disasters. Sweden pledged approximately $19 million, bringing total pledges to over $720 million. The COP29 Presidency emphasized the need for further contributions to meet the urgent needs of communities facing climate impacts.
Methane emissions summit
In parallel developments, a summit convened by the United States, China, and Azerbaijan addressed strategies to reduce methane emissions and other non-CO2 greenhouse gases. This initiative is crucial for achieving global temperature goals and mitigating near-term warming effects.
The summit saw participation from around 80 heads of states. Discussions focused on enhancing ambitions for mitigation and adaptation through Nationally Determined Contributions (NDCs) and other strategic frameworks
As MDBs exceed their previous financing projections, the emphasis on operationalizing the Loss and Damage Fund reflects an urgent response to the escalating impacts of climate change.
