The UN Climate Change Conference (COP29) concluded in Baku, Azerbaijan, setting a global finance target of $300bn per year to support developing nations in addressing the impacts of climate change.
However, this deal has been criticised by many developing nations such as India as inadequate.
Known as the New Collective Quantified Goal on Climate Finance (NCQG), the agreement enhances the previous commitment of $100bn per year by 2020, follows two weeks of negotiations and builds on previous climate action milestones.
The agreement sets a broader target of generating $1.3trn in climate finance annually by 2035, encompassing funding from both public and private sources.
Economists suggest that this amount is necessary to effectively address global warming, reported Reuters.
This financial boost is expected to support countries in protecting their economies and populations against climate disasters while sharing in the benefits of the clean energy boom.
UN Climate Change executive secretary Simon Stiell said: "This new finance goal is an insurance policy for humanity, amid worsening climate impacts hitting every country. But like any insurance policy – it only works – if premiums are paid in full, and on time.
“Promises must be kept, to protect billions of lives. It will keep the clean energy boom growing, helping all countries to share in its huge benefits: more jobs, stronger growth, cheaper and cleaner energy for all.”
This new finance goal follows significant achievements at COP27 and COP28, which included the Loss and Damage Fund and a global agreement to transition away from fossil fuels.
COP29 also achieved a breakthrough in carbon markets, an area where previous COPs struggled.
These agreements aim to accelerate the implementation of climate plans, facilitating quicker and more cost-effective progress in reducing global emissions.
Additionally, agreements on transparent climate reporting and adaptation were reached.
However, Stiell noted that the agreement did not meet all expectations, and more work is needed on several critical issues next year.
The agreement was also met with scepticism from some delegates who criticised developed nations for not doing more.
Indian delegation representative Chandni Raina was quoted by Reuters as saying: "I regret to say that this document is nothing more than an optical illusion. This, in our opinion, will not address the enormity of the challenge we all face. Therefore, we oppose the adoption of this document."
The finance agreement coincides with the upcoming submission of stronger national climate plans, known as Nationally Determined Contributions (NDCs).
These plans must address all greenhouse gases and sectors to maintain the 1.5°C warming limit.
The UK and Brazil, both G20 countries, have indicated plans to enhance their climate action in their NDCs 3.0, aligning with their economic and public interests.
