Crypto News: COP29: A game of chicken

Good evening from Baku. We're hearing lots of possible numbers for a finance deal being thrown around. Negotiators are expected to work late tonight, setting the stage for a new draft on Wednesday. Read on for more, and catch up with all of our COP29 coverage for free on Bloomberg.com.

By Jennifer A. Dlouhy

It was Food, Agriculture and Water Day at COP29 on Tuesday, so perhaps it's appropriate that the biggest deliberations feature a game of chicken.

The standoff is deepening over the marquee negotiating track: how to boost an expiring $100 billion annual climate finance commitment. Neither side is willing to concede yet, and feathers are starting to get ruffled.

In talks over the "new collective quantified goal," the diplomatic term of art for the giant pool of climate finance to assist poor countries, negotiators from developed nations have been reluctant to lay out numbers for the public funding they could provide, without knowing the type of finance that would be accepted. By their thinking, there's a wide gap between what they can cough up in terms of grants and other affordable finance versus loans at near-market rates. As a senior US official said: you wouldn't want to put a number on the table without knowing what that will entail.

By contrast, developing countries have planted their numbers — plenty of them, surpassing $1 trillion a year — but they are pushing for grant-like finance that won't lock in already unsustainable debt burdens for generations. And there's no conference-wide consensus emerging on the scope and quality of the final finance target.

The key issues in the finance goal are all so deeply intertwined it defies easy progress on any one of them. "It's a complex equation," observed Alden Meyer with E3G. "You've got to resolve multiple pieces simultaneously."

Wealthy countries have come to negotiations with dollar figures based on the "vague accounting" that underpinned the earlier $100 billion annual goal that's being replaced now, said Michai Robertson, climate finance negotiator for the Alliance of Small Island States. And now, their argument is that if "the accounting rules" get changed, "they'll have to reduce the number," Robertson said.

It's all created a dynamic where after three years of official work on the new finance goal, there's an impasse over its major, core issues with just three days left in COP29 — not to mention deep divides in other negotiating tracks including on adaptation and mitigation. Even though we're reaching the midpoint of the final week of talks, as one COP veteran observed: "No one's going to concede on a Tuesday."

It's creating a lot of pressure for the final 48 hours. Robertson said he worries that the current dynamic sets the stage for "backdoor deals," like those that led so many countries to leave the 2009 summit in Copenhagen feeling bitter and disenfranchised: "We're basically flying in the dark, and we are supposed to finish this COP two days from now."

Certainly no one's flying from the COP yet. And a deal seems very far from being hatched.

Less than this share of all public climate finance goes into food systems, even though they make up about a third of the global greenhouse gas emissions.

"This year's COP has the hallmarks of Copenhagen and could end up very similarly, with impasse and the prospect of failure broken at the last minute by a number almost plucked out of thin air."

Avinash Persaud

Special Advisor on Climate Change to the President, Inter-American Development Bank

Persaud, a longtime COP veteran, referred to the 2009 UN climate summit in Copenhagen, which was largely deemed a failure as it did not produce a global warming target all countries could agree on. That was eventually set at the Paris meeting in 2015.

We reported earlier that Colombia is considering China as a back-up plan for finance if it can't seal a climate funding deal in the US before Donald Trump takes office. Susana Muhamad, Colombia's climate minister, said she would go to Washington in the coming weeks to try and secure initial finance for an ambitious $40 billion strategy to overhaul her country's fossil fuel-based economy in favor of green investments. The outlook for the deal is now more complicated that Trump won this month's election, she said. Colombia is among 13 countries that have endorsed the Fossil Fuel Nonproliferation Treaty, which calls for ending the expansion of new fossil-fuel projects. Today it also joined a new group, the Coalition on Phasing Out Fossil Fuel Incentives Including Subsidies, with the UK and New Zealand. COFFIS, as it's known, says it's aiming to tear down barriers and improve transparency toward the phase-out of fossil fuel subsidies. It now has 16 member countries.

There's been a lot of talk about the suitability of Belém to host the climate talks next year. One concern has been around the shortage of hotel rooms in the relatively obscure Brazilian city, which is the last major port of call on the Amazon before the Atlantic. The organizers for COP30, who are on the ground in Baku, say they're looking into several different options for accommodating thousands of extra people over the two weeks of the summit. One idea could be to use ships. There's plenty of other things being worked out as well. As Bloomberg's CityLab reported this summer, ahead of COP30, local authorities in Belém are "tearing up the town with lavish engineering projects — new roads, bus systems, pavilions and parks" in preparation.

There's hope we'll see a draft of the COP29 finance deal tomorrow evening. All eyes are on the text around the new collective quantified goal. Everyone is going to be scanning for numbers. Azeri press has said there's work being done to get pledged contributions from public sources up to a range of $300 billion to $500 billion, which the unofficial betting market in the Blue Zone thinks is a bit punchy. Other things to look out for are any mentions of the COP28 pledge to "transition away" from fossil fuels. As we reported last weekend, Saudi Arabia had been resisting a reaffirmation of those words in any final deal.

Reporter Akshat Rathi sits down with ExxonMobil CEO Darren Woods, who made his second-ever appearance at the United Nations climate conference. Woods made the case for why incoming US president Donald Trump shouldn't exit the Paris Agreement, and should uphold the country's monumental climate legislation passed under the Biden administration. It's quite the tone shift for a company that has a well-documented history of sowing doubt about the dangers of global warming. Listen now, and subscribe on Apple, Spotify, or YouTube to get new episodes of Zero every Thursday.

We may have spotted a place to spend the long nights ahead of us. At the Kyrgyzstan pavilion, attendees can pop inside a very comfortable looking yurt.