The United Nations COP29 climate change conference in Baku seeks $1 trillion annually to help vulnerable nations tackle climate change, as political tensions and Argentina’s withdrawal overshadow talks.

At the COP29 climate summit in Baku, nations continue to focus on efforts to secure up to $1 trillion annually to support vulnerable countries in addressing climate change, amidst rising political tensions. 

Argentina withdrew its delegation on Thursday, adding to the challenges overshadowing the talks. The outcome of this year’s summit is tied to achieving consensus on a new financial target for wealthier nations, development banks, and private investors to meet by the end of the decade. Economists estimate that developing nations require at least $1 trillion per year to tackle the climate crisis.

Countries have emphasized that financial commitments are key to setting ambitious climate targets ahead of next year’s COP30 in Brazil. However, disagreements and shifting global political dynamics have created a difficult negotiating environment. Donald Trump’s recent presidential election victory has raised uncertainties about the United States’ future role in climate finance, while tensions between developed and developing countries have surfaced during negotiations.

“The clock is ticking,” warned COP29 Lead Negotiator Yalchin Rafiyev at a press briefing. The previous $100 billion annual finance target, set to expire this year, was only fully met starting in 2022. A report from the Independent High-Level Expert Group on Climate Finance highlighted the urgency, suggesting the target should increase to at least $1.3 trillion per year by 2035 if immediate action isn’t taken.

Draft texts under discussion reveal significant differences in opinion among negotiators. Many Western countries remain hesitant to make large financial pledges, and with the potential withdrawal of the United States from future funding agreements, the pressure is mounting to identify alternative sources. Multilateral development banks, such as the World Bank, are undergoing reforms to enhance their lending capacity. The 10 largest banks plan to boost their climate financing by approximately 60%, aiming to reach $120 billion annually by 2030, including an additional $65 billion from private sector contributions.

In a local effort, Zakir Nuriyev, head of the Association of Banks of Azerbaijan, announced on Thursday that the country’s 22 banks would allocate nearly $1.2 billion for projects facilitating Azerbaijan’s transition to a low-carbon economy.

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