The UN COP29 climate summit, currently underway in Baku, Azerbaijan, has brought together representatives from nearly 200 countries with the primary goal of negotiating a historic agreement on climate finance.

The negotiations, which will take place from November 11 to 22, aim to establish a new global target for financing climate projects that could reach billions of dollars.

The summit’s focus on finance comes because the previous annual pledge of $100 billion from rich countries, established in 2009, expires this year.

Although this goal was not fully achieved until 2022, negotiators now have the task of raising the bar much higher to address the growing costs of mitigating and adapting to climate change.

Discussions center on a multi-tiered target approach, combining core contributions from wealthy governments with additional funding from multilateral institutions and private investors.

However, recent US election results have cast a shadow over the negotiations, with fears that a possible Trump administration could suspend US contributions to climate finance, which could reduce the overall target.

Developing countries are pushing for a substantial increase in funding, with some claim more than $1 trillion a year.

Arab countries have proposed an annual target of $1.1 trillion, including $441 billion in direct subsidies from developed countries. India, African countries and small island nations echoed similar figures, highlighting the urgent need for climate action.

The negotiations face challenges, including disagreements over which countries should contribute.

While traditionally only rich countries were required to pay, there are now calls for rapidly developing countries like China and the oil-producing Gulf countries to join the effort. China, however, maintains its status as a developing country, resisting these demands.

The outcome of these financial negotiations is crucial, as it will have a direct impact on the ability of countries to implement ambitious climate plans.

As the next UN deadline for updating national climate plans approaches, failure to secure substantial funding could lead to a weakening of commitments from countries citing financial constraints.

As the summit progresses, negotiators are grappling with the complex task of balancing the urgent need for climate action with the economic realities facing developed and developing countries.