To capitalize the fund, Azerbaijan is looking for at least $1 billion from ten major nations and corporations.
The government of Azerbaijan, which is hosting the Cop29 climate meeting in November, is creating a climate investment fund.
Countries and businesses that produce fossil fuels are being asked to contribute to a new global fund to assist developing nations in addressing the effects of the climate catastrophe.
Contributions to the Climate Finance Action Fund will come from nations and businesses that produce fossil fuels, and the funds will be used to fund initiatives in developing nations that lower greenhouse gas emissions and increase resilience to extreme weather events.
Yalchin Rafiyev, the head negotiator for the Cop29 presidency, stated that a different approach has been chosen because the traditional funding methods have proven to be inadequate to the challenges of the climate crisis. Contributions from fossil fuel-producing nations and businesses will finance the fund, which will stimulate the private sector. Money from the fund will be available to any developing nation.
However, the fund would only accept voluntary contributions, and no system is in place to compel the nations and businesses that emit the greatest amounts of greenhouse gases to do so.
While the announcement of a new fund for developing nations echoes the long-standing demands for holding the fossil fuel industry accountable, it must not serve as a free pass for continued extraction of gas, oil, and coal, according to Harjeet Singh, the global engagement director at the Fossil Fuel Non-Proliferation Treaty Initiative.
Since the fossil fuel business is to blame for the climate catastrophe, it must face severe penalties in order to cover the costs of the transition and climatic damage.
To capitalize the fund, Azerbaijan is looking for at least $1 billion from ten major nations and corporations. The supervising board of the fund, which would be independent of the World Bank and other current multilateral development institutions, will be composed of representatives from the contributors and have its headquarters located in Baku, the capital of Azerbaijan.
According to Tucker, polluters should be held accountable for their climate crimes with billions of dollars, not with a $1 billion voluntary fund that would empower Big Oil to make decisions. Interests in fossil fuels need not to be included at the table since they have purposefully and repeatedly obstructed, postponed and undermined important climate solutions.
Although it has promised to make a contribution, Azerbaijan has not yet specified how much it will contribute to the fund. As of yet, no other nations have ratified.
The fund will not make any investments in gas or other fossil fuels. There won’t be a chance for governments or private sector investors to take profits since any earnings the fund makes – for example, from investing in renewable energy – will be reinvested in the fund.
Bob Ward, a policy director at the London School of Economics’ Grantham Research Institute on Climate Change and the Environment, issued a warning: if the goal of the Climate Finance Action Fund is to lessen the push to phase out gas, coal, and oil, then it may be seen as climate-washing.
Azerbaijan expressed its desire for Cop29 to be a “peace Cop” and hinted that it would ask for warring in November, among other pronouncements made during its presidency.
UN climate chief Simon Stiell has been visiting his birthplace in Grenada, where relatives’ homes were severely damaged by Hurricane Beryl. He has called on all nations to develop more robust strategies to reduce emissions and to support the poorest nations most affected by the climate issue.
The UN Framework Convention on Climate Change’s Cop, or conference of the parties, is significant because it represents humanity’s best chance to address the climate catastrophe, achieve decarbonization, and develop climate resilience, the speaker said. Results from this process are evident, as we have observed.