As global negotiations on climate finance continue to struggle, Azerbaijan, the host of this year’s climate conference, has introduced a new initiative aimed at supporting climate action in developing nations. The newly unveiled Climate Finance Action Fund (CFAF) is designed to gather “voluntary” contributions from countries and companies involved in fossil fuel production. Azerbaijan, a nation with a significant petroleum industry, will make the fund’s initial contribution, though the total fundraising target remains unspecified.
Focus of COP29
The CFAF is part of a broader set of proposals that Azerbaijan plans to present at COP29, scheduled to take place in Baku from November 11 to 22. This conference will focus on finalizing an agreement on climate finance, specifically determining how much developed nations should contribute in the post-2025 period to support climate action in developing countries. Under the 2015 Paris Agreement, industrialized nations are required to mobilize at least $100 billion annually starting from 2020, with an obligation to increase this amount every five years.
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Ongoing Negotiations
Despite ongoing discussions throughout the year, significant progress on the finance agreement has been elusive. Several meetings are set to occur before COP29 to advance these negotiations.
Proposals Included in COP29 Agenda
Azerbaijan’s proposal for the CFAF is part of a larger set of initiatives that the country hopes will be integrated into the final COP29 outcome. Other key proposals include:
– A commitment to expand global energy storage capacity sixfold by 2030.
– Efforts to establish a global market for green hydrogen.
– Measures to minimize the emissions associated with the growth of digitalization and data centers.
Details of the CFAF
The CFAF aims to add to the array of existing climate funds, most of which face financial shortfalls. Azerbaijan has suggested that contributions from fossil-fuel producers could be either fixed amounts or based on production volumes. The fund plans to allocate 50% of the contributions to climate projects in developing countries and the remaining 50% to support the implementation of national climate action plans in these regions.
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