The EU and the Paris Agreement: will it have it enough to save it at COP29? 

COP29 starts today in Baku (Azerbaijan) and a lot of expectations are building up for Parties to deliver. One key deliverable this year will be the outcome of the 3-year long negotiations on the future of climate finance – the so-called New Collective Quantified Goal. In 2015 in Paris, Parties decided that by 2025, they will set a new climate finance goal, considered as a means of implementation of the Paris Agreement (PA) and, in fact, its backbone. Yet despite the high expectations, things don’t look great. After three years of technical and political discussions, the divide among Parties remains significant.  

These negotiations are in fact a litmus test for the Paris Agreement. The entire climate regime is premised on the equity principle that the least responsible for climate change will receive support to mitigate and adapt to it. This year’s negotiations will either materialise this principle in the form of an ambitious post-2025 climate finance deal; or seriously jeopardise it by rendering the PA objectives out of reach for the many. The UN reports that NDCs currently point to the risk of a 3° C warming by 2100, which would blast past the target warming threshold of the Paris Agreement. And it’s very clear that, without credible support to developing countries, there are no credible expectations for this to change.  

While the EU has been holding strong on its divisive positions throughout the negotiations, we urge negotiators and Ministers to seek to bridge the gaps with developing countries. Failure in these negotiations might weaken the Paris Agreement altogether. The EU is increasingly losing influence in these negotiations precisely due a to lack of equity and finance in its approach. Its efforts for a fossil fuel phaseout deal at COP28 were weakened by a lack of willingness to provide climate finance for developing countries already being pushed into debt by the costs of climate action. The EU needs to do more to come across as a genuine partner. These climate finance negotiations are both a unique opportunity to secure its own influence in the climate regime and safeguard the Paris Agreement with equity at its heart.  

Here are four things the EU can do: 

• The Definition of climate finance: it is quite ironic that three years of negotiations have not been able to determine the very elementary part of the goal. The reason is simple: contributors want to keep control of what they count as climate finance. And the EU wants to count private investments and market-rate loans as climate finance. In other words, profit-generating financial flows that benefit the EU would be counted as a form of support to developing countries in addressing climate change. While the EU is right in seeking to shift financial flows away from brown investments, climate finance under the PA should be about the new, additional and grants-based support provided by historically responsible countries to the most vulnerable in reaching the goals of the PA.  
• The Quantum: this is the amount that the countries historically responsible for climate change will commit to provide to least responsible ones for climate action and resilience. The EU has refused until now to put forward any figure. CSOs are demanding at least 1 trillion in debt free finance yearly to be transferred to developing countries. This is on the lower range of all credible needs estimates even though the EU claims that it sees it as out of reach. Yet, someone will pay the bill at the end as an activist put it: either the EU contributes to it financially to preserve justice and the Paris Agreement; or it will be the most vulnerable in the Global South (and North as the recent painful floods in Valencia-Spain) that will pay it in the form of climate impacts.  
• Contributor base: The EU has conditioned any deal to the inclusion of new countries which are either major polluters and/or have the means to support vulnerable one, i.e. China. However, a fair shares analysis of countries’ per capita historical responsibility for GHGs shows that, in fact China, does not have anything close to the climate culpability of the EU and other developed countries. The EU has the responsibility to first secure the right financial ambition in the current framework of contributors which can only reinforce its claims and priorities subsequently.   
• Loss and Damage: While the EU undoubtedly played a critical role at COP27 when it eventually decided to support the establishment of a new funding stream for loss and damage, it has since failed to anchor this in the climate finance architecture. Even though there might be overlap with existing finance which can pose accounting challenges, the inclusion of loss and damage as a standalone and quantified subgoal is the only way to recognise the financial needs of people whose lives are being devastated by climate destruction, enable accountability and tracking progress. Otherwise, its initial commitment will remain void.  

"Leadership commands to focus on your own action, not what others like China can do" concluded an MEP during Hoekstra's hearing in the European Parliament last Thursday. Indeed, leadership commands that the EU takes its own responsibility to ensure a post-2025 climate finance deal is sealed in Baku, to protect the Paris Agreement and its own interest in the international climate regime. This will take to centre equity in each of the negotiation items and act as bridge builder with developing nations. The result from the US election might reinforce the EU’s interest in the Paris Agreement and the need to step up its leadership to preserve the climate regime.