UN warns of ‘economic carnage’ if G20 leaders cannot agree on climate finance for poor countries

Wealthy nations are yet to offer the hundreds of billions of dollars that economists say are needed to help the developing world cut emissions

Leaders of the world’s biggest economies meeting in Rio de Janeiro on Monday must agree to provide the finance that the world’s poorest need to tackle the climate crisis or face “economic carnage”, the UN has warned.

The G20 nations are about to gather in Brazil for two days of talks, while many of their ministers remain in Azerbaijan where crucial negotiations at the Cop29 climate crisis summit have stalled. Rich countries’ governments have not yet put forward the offers of hundreds of billions of dollars in financial aid that economists say are needed to help poorer countries cut their greenhouse gas emissions and adapt to the impacts of extreme weather.

Simon Stiell, the UN’s climate chief, called on the G20 leaders to break the logjam. “The G20 was created to tackle problems that no one country or group of countries can tackle alone. On that basis, the global climate crisis should be order of business number one, in Rio,” he said.

“Climate impacts are already ripping shreds out of every G20 economy, wrecking lives, pummelling supply chains and food prices, and fanning inflation. Bolder climate action is basic self-preservation for every G20 economy. Without rapid cuts in emissions, no G20 economy will be spared from climate-driven economic carnage,” he warned.

The G20 must also discuss debt relief, he added, as many poor countries are unable to take measures to protect themselves from climate breakdown while they are already struggling with debt servicing costs that have been pushed higher by interest rate rises.

“In turbulent times and a fracturing world, G20 leaders must signal loud and clear that international cooperation is still the best and only chance humanity has to survive global heating,” he added. “There is no other way.”

Only a few heads of government of G20 countries attended the Cop29 talks when they began last week. Keir Starmer, Italy’s Giorgia Meloni and Recep Tayyip Erdoğan of Turkey flew into Baku, the Azerbaijani capital, but many countries sent ministers or high-ranking officials instead.

Poor countries are hoping for a global financial settlement from Cop29 that will reach $1 trillion a year by 2030, a widely accepted figure based on research by the leading economists Nicholas Stern, Vera Songwe and Amar Bhattacharya.

They found that developing countries, excluding China, require about $2.4 trillion a year to meet the terms of the Paris climate agreement, but that most of this can come from domestic budgets.

Of the $1 trillion in external finance needed, about half should come from the private sector, according to the research, and about a quarter from multilateral development banks such as the World Bank. The rest should come from a mixture of philanthropy; overseas aid from big economies; potential new levies on high-carbon activities such as frequent flying; and the proceeds of sales of carbon credits.

The process of the Cop – which stands for conference of the parties, as set up under the 1992 UN Framework Convention on Climate Change – has also come under attack.

A group of senior global voices on the climate wrote to the UN last week, calling for safeguards to ensure that future Cop summits could only be held in countries that already have strong commitments to climate action.

Azerbaijan’s economy has been built on oil and gas since the mid-19th century, when Baku became one of the world’s first oil towns. Fossil fuels make up 90% of the country’s exports, and the country’s president, Ilham Aliyev, told the opening sessions of Cop29 last week that they should be seen as “a gift of God”.

Last year’s Cop was also held in a petro state – United Arab Emirates, whose choice of Cop president, Sultan Al Jaber, kept his job as chief of its national oil company throughout his tenure.

This year, there are at least 1,773 fossil fuel lobbyists among the more than 60,000 delegates, which is more than the delegations of the 10 most vulnerable countries combined. Next year’s Cop will be held in Brazil, which is also hosting this year’s G20. The country’s president, Lula da Silva, is likely to push G20 leaders in Rio to agree not only new climate finance for the poor but also more stringent emissions targets for their own economies, as these need to be delivered by February, according to UN rules, and will form the main outcome of Cop30 next November.

The UK has already submitted its new target: an 81% cut in carbon by 2035, compared with 1990 levels. Starmer was widely applauded at Cop29 when he announced the goal, along with a re-commitment to providing £11.6bn in overseas climate finance between 2021 and 2026.

That target was set by Boris Johnson, but he failed to ensure it was met and Rishi Sunak threatened to scrap it, leaving Labour to make up the shortfall in the next two years.

The Cop29 talks will officially end at 6pm on Friday, but are likely to carry on into next weekend. While progress in the past week was slow, delegates were generally supportive of the Azerbaijani presidency, and several who spoke to the Observer pointed to past Cops, which faced similar problems in the first half.

“This is to be expected at this stage,” said one. “I wouldn’t say these talks are in trouble. We do need to step up the pace next week, though.”

Cover photo: By The Guardian