Promises in Peril: The Global South’s Fight for Climate Finance and Accountability

By Reewa Goswami

Published on December 12, 2024

The Global South, which bears the brunt of climate impacts despite making the least contribution to the global emissions problem, has made climate finance a focal point in the discussion surrounding climate change negotiations. Over time, the issue has developed into one of the main contentions of multilateral talks, with governments and international financial organizations promising money to help developing countries in their efforts to mitigate and adapt to climate change. However, political complications and the Global North's unwillingness to fulfil its obligations have frequently hampered the actual realization of these agreements. With an emphasis on the recent COP29 in Baku, Azerbaijan, India's role in voicing for the Global South, and the ramifications of changing contours of multilateralism with the re-election of Donald Trump as the President of the United States, this article examines the evolving dynamics of climate finance in the Global South.

Despite historically being less accountable for the bulk of greenhouse gas emissions, the Global South, which includes developing nations in Africa, Asia, and Latin America—has long been at the receiving end of the climate problem. These areas are particularly susceptible to the effects of climate change, which include increasing sea levels, desertification, biodiversity loss, and extreme weather events including heatwaves, droughts, and floods. These frequently have disastrous effects on infrastructure, water supplies, agriculture, and health, destroying developmental gains. The Global South bears a disproportionate burden of climate-related disasters and is in a vulnerable position when it comes to climate financing, which is the provision of financial resources to assist nations in lowering emissions and preparing for the inevitable effects of climate change. Promises to give developing nations financial support have mostly gone unfulfilled as 69% of those were in the form of loans, even in the face of official commitments made under the United Nations Framework Convention on Climate Change (UNFCCC), such as the 2015 Paris Agreement.

COP29 and the Global South

One of the main points of disagreement in climate negotiations has been the absence of adequate, predictable, and easily accessible climate funds. Developed countries, which have historically produced the most greenhouse gases, pledged to raise $100 billion annually by 2020 to assist developing nations in addressing climate change. The deal is said to be fulfilled in 2022. However, the tug of war continues as developing countries argue that the commitments have not been honoured with reference to the money coming more from loans and fewer grants, which has increased the debt load of poorer nations. This leads to a vicious cycle in which the nations that desperately require funding for climate action wind up worsening their economic woes while also shouldering the burden of adaptation. Furthermore, the shift to clean energy and climate resilience often necessitates large expenditures in infrastructure and technology, two areas in which developing countries are severely underdeveloped.

As the international community convened in Baku, the need for climate action was more urgent than ever. Extreme weather disasters and rising global temperatures have highlighted the need for swift and significant change. COP29, hosted in Baku seemed like an inflection point in global climate diplomacy, particularly for nations in the Global South. Increased funding for emerging economies by thrice, from the initial target of USD 100 billion per year to USD 300 billion per year by 2035, raising public and private funding for developing and underdeveloped nations to work towards an aspirational goal of USD 1.3 trillion annually by 2035 plus the finalizing of specific rules for international carbon markets are some of the outcomes of COP29. The conference's conclusion, however, brought to light the ongoing differences between the Global North and South over climate funding as climate finance remained one of the most controversial topics in Baku. Although several affluent countries indicated they would be willing to increase their commitments to assist developing nations in their transition to cleaner energy, there was a conspicuous absence of specific pledges or well-defined plans to close the funding gap. Small Island Developing States (SIDS) and Least Developing Countries (LDC) demonstrated deep frustration during the COP29 negotiations citing meagre responses to their woes. The impasse in COP29's climate finance talks is indicative of a larger pattern of broken commitments that has damaged confidence in multinational climate talks. One of the most important factors facilitating climate action in these nations is the availability of sustainable and reasonably priced funding. Since countries in the Global South continues to be the ones intensely affected by climate change, the absence of sustainable funding exacerbates inequality and makes it more difficult for these nations to address the climate problem and achieve their development objectives.

The Spotlight on India

India often strives to position itself as the voice of the Global South through overtures like proposing and facilitating the inclusion of the African Union (AU) during its G20 presidency in 2023. Even during the COP29 proceedings, India vociferously protested against the USD 300 billion figure calling it ‘abysmally poor’, ‘paltry’, and an ‘optical illusion’, and accused the presidency of ‘stage-managing’ the event as the decision was adopted without formally factoring in the vehement opposition by numerous countries to the offer. Regardless of an overwhelming majority of SIDS and LDCs endorsing and echoing India’s objections to the deal, the New Collective Quantified Goal on Climate Finance (NCQG) was ‘adopted’ without consensus and complying with the customary procedure of allowing countries to raise objections. India, as a major rising economy and one of the biggest emitters of greenhouse gases globally, has a massive role to play in efforts to mitigate and adapt to climate change. Indian leaders have emphasized time and again that climate finance should be a shared duty rather than a mere charitable endeavour.

Generally and to ensure that climate financing is efficiently raised and distributed, India emphasized structural reforms like debt resolution and debt restructuring in international financial organizations like the IMF and World Bank. Furthermore, India's G20 leadership pushed for further international collaboration to help the Global South adopt green technologies so they may advance to cleaner energy sources. However, India's participation in the G20 presidency also demonstrated the difficult balancing act it had to do. India has been hesitant to take on strict carbon reduction objectives owing to its developing status, ridden with obstacles that seem unsolvable in the foreseeable future. India's strategy during its leadership aimed to strike a balance between acknowledging the necessity for emerging economies' development and calling for climate action. This was in line with India's long-standing position in international climate negotiations in the past as well as at the COP29 summit, pressing for Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC) and that the Global North should be more accountable for funding climate action while the Global South should be allowed the room it needs to expand and develop economically at par. Although India's G20 presidency contributed to raising awareness of the climate finance issue, it ultimately encountered the same challenges that have beset earlier climate negotiations: a dearth of legally binding commitments, a widening gap between developed and developing nations' priorities, and a hesitancy on the part of the Global North to fulfil financial commitments. It was in no way a paradigm shift by a long shot but India's leadership demonstrated that multilateral forums are essential for overcoming the North-South divide and emphasized the G20's potential to advance climate action in a way that considers both ambition and justice.

Climate Multilateralism and Trump

The future of multilateralism and climate funding is extremely uncertain, particularly in light of Donald Trump's re-election as US president. Many in the Global South feel abandoned and demoralized by Trump's previous withdrawal, threats of withdrawing from the Paris Agreement in the future, and his general scepticism about climate change during his previous presidency. His administration's approach to climate change, which prioritized economic expansion and the use of fossil fuels over environmental preservation, made matters worse for unwealthy countries and jeopardized the sustainability of international climate initiatives. The dynamics of international collaboration on climate concerns are massively influenced by US policies, as the nation holds huge sway over policies generally, including being a key contributor to climate financing projects amongst other things. The fiscal deficit that the Global South now faces would be made worse with a downslide in foreign aid and a lack of effective climate action would be forthcoming if the Trump administration chooses to pullout from international climate agreements. The spirit of multilateralism required to confront a global catastrophe like climate change may also be weakened by the broader tendency towards populism and protectionism, which is best represented by Trump's "America First" policy. Under such a government, the Global South—which has already been hardest hit by climate change—would probably find itself much more excluded from international discussions.

As nations in the Global South continue to grapple with the dual problems of economic hardship and climate adaptation while also aspiring for prosperity, climate finance continues to rank among the most urgent issues facing these nations. The Global South expressed displeasure over broken pledges at COP29 in Baku, which revealed persistent gaps in the delivery of climate funds. Going forward, the political course that major powers—especially the United States—take will determine the future of multilateralism and climate funding. As climate impacts intensify, it is imperative that the Global North live up to its moral and financial commitments, and that multilateral platforms are strengthened to ensure a just and sustainable global response to climate change.

*The Author is a Research Intern at the Kalinga Institute of Indo-Pacific Studies (KIIPS). She is a Post Graduate in Political Science with a Specialization in International Relations, Central University of Jharkhand.

Disclaimer: The Views in the Article are those of the Author

Image Credit: MIT Technology Review