Wealthy nations have committed to providing billions of dollars of “climate finance” to developing countries, as part of the global effort to tackle climate change.
At the COP29 climate summit, nations must decide on a new global goal to replace the existing target of $100bn each year.
Delivering this money is widely viewed as important for helping vulnerable nations in the global south and maintaining trust between countries in UN climate talks.
Yet, for decades, climate finance has been plagued by accusations of exaggerated numbers, poor transparency and money going to “questionable” places. Much of this stems from a lack of consensus on what counts as “climate finance”.
Most climate finance comes from the aid budgets of a handful of developed states, including western Europe, the US and Japan. Governments use their own criteria to assess “climate finance”, often prompting criticism from civil society groups and developing countries.
Most climate finance goes towards legitimate causes. However, analysis of the available data reveals examples of countries reporting funds going to, say, fossil fuels and airports. Some donors report finance that may never be spent and others hand out loans that, ultimately, see them making a profit.
These activities are all allowed under the UN climate finance system.
As countries gather to negotiate a new climate-finance target at COP29 in Baku, Azerbaijan, Carbon Brief – in no particular order – explores six of the issues that make climate finance such a “wild west”.
- There is no agreed definition of what counts as ‘climate finance’
- Climate-finance accounting is not consistent or transparent
- Some climate finance is not helping to tackle climate change
- Reliance on loans ‘overstates’ climate finance flows
- Countries are reporting money that may never get spent
- Climate finance is used to boost donors’ economic interests
1. There is no agreed definition of what counts as ‘climate finance’
There is no universal agreement on what should, or should not, count towards the international “climate finance” provided by developed countries to developing countries.
Unofficial definitions, including those of the UN Standing Committee on Finance (SCF) and the Organisation for Economic Co-operation and Development (OECD), broadly agree that climate finance should support activities that cut emissions or help adapt to climate change.
As for the types of finance that should count, nations decided that the $100bn target would cover “a wide variety of sources”, including public money, support via multilateral development banks (MDBs) and private investment spurred by public spending.
However, the kinds of activities and finance streams falling into these broad categories are open to interpretation. In practice, governments of developed countries use their own methodologies and set their own rules when reporting climate finance.
Developed countries also pledged to provide climate finance that is “new and additional” – a term often taken to mean extra funding on top of other aid programmes. However, this framing is contested and, in practice, much of the reported climate finance comes from existing development budgets.
Prof Romain Weikmans, an international climate-finance researcher at the Free University of Brussels, tells Carbon Brief that developed countries have “diverging understandings on what should count as climate finance and on how to count it”. He adds that reporting requirements negotiated at the UN “allow countries to remain vague”.
Many expert analyses have concluded that self-reporting by governments, facing political pressure to act on climate change, contributes to an “overestimation” of total climate finance.
While it was widely reported that, based on OECD data, developed countries met the $100bn target two years late in 2022, Weikmans says the lack of a universal definition “makes it impossible to assess whether the $100bn has been met or not”.
The chart below shows how different assumptions about “climate finance” by key financial organisations lead to divergent estimates of how much has been provided.
Igor Shishlov, head of climate finance at Perspectives Climate Group, tells Carbon Brief that the lack of clarity contributes to an “erosion of trust” in climate negotiations between developed and developing countries.
These tensions have existed since the start of UN climate negotiations in the 1990s. An attempt by COP presidencies in 2015 to “reassure” nations about progress towards the $100bn goal with a special OECD report ended up sparking more disputes.
(A response at the time from the Indian Ministry of Finance – reflected in the chart above – estimated that climate finance was 26 times smaller than the OECD estimate. This was based on money that had been paid out, rather than pledged, from climate funds deemed “new and additional”.)
Efforts since then to agree on a definition have failed. Joe Thwaites, a senior advocate on international climate finance at NRDC, tells Carbon Brief that both developed and developing countries contribute to this deadlock:
“Developed countries oppose a definition that would restrict climate finance to certain financial instruments, while petrostates oppose a definition that would exclude counting funding for fossil-fuel projects as climate finance.”
As countries negotiate the “new collective quantified goal” (NCQG) for climate finance at COP29, observers say it is unlikely that nations will make significant progress on a comprehensive definition.
2. Climate-finance accounting is not consistent or transparent
The systems for climate-finance accounting have been described as full of “inconsistencies” and “discrepancies”, as well as “prone to huge overestimations”.
Joseph Kraus, senior policy director at the ONE Campaign, which has attempted its own assessment of climate finance based on available data, tells Carbon Brief:
“Climate finance accounting is like the wild west: Every climate finance provider makes its own rules about what to count. Predictably, that makes it virtually impossible to get accurate numbers.”
Governments report their climate-finance contributions to three major international bodies: the OECD; the UNFCCC; and, in the case of EU member states, the European Commission.
Most climate finance is drawn from developed countries’ aid budgets and they register their bilateral contributions in the OECD Creditor Reporting System (CRS). Officials then mark projects as being related to climate mitigation or adaptation.
This “Rio marker system” was implemented in 1998 to assess whether aid projects align with the three “Rio Conventions” on climate change, biodiversity and desertification.
The tags were never meant to define the amount of “climate finance” counted under the UN system. They have effectively filled the gap left by the lack of official guidance.
Most developed countries use the data submitted to the OECD CRS to guide what they report as “official” climate finance in reports to the UNFCCC. Only a handful, including the UK and the US, assess projects on a more case-by-case basis.
Governments use the Rio Markers to calculate climate finance in different ways. Most say they count 100% of the projects where climate has been marked as a “principal” objective towards their UNFCCC totals.
Projects where climate is deemed “significant”, implying a partial focus on climate, vary a lot more. Countries state that they report between 30% and 50% of these projects as climate finance.
Analysts have warned that the blanket application of fixed percentages is arbitrary and can lead to figures being inflated. They also note that, in practice, UNFCCC and OECD figures are difficult to compare and do not always match up in the ways countries report them.
The figures for bilateral climate finance that developed countries report to the UNFCCC are used as the basis for the OECD’s annual reports of progress towards the $100bn goal. They are combined with the OECD’s figures for MDBs, multilateral funds and the private sector.
(These are generally cited as the definitive figures for $100bn tracking, although they are contested. The OECD does not provide a breakdown of contributors to the target and its reports are released two years in arrears, making real-time scrutiny difficult.)
While the OECD screens projects reported in its system, it has no power to amend those that have been marked “incorrectly”. Analysis by Development Initiatives of climate-related aid projects found countries, such as France, Japan and Australia, frequently tagged projects that “deviated” from OECD guidance – those that include fossil fuels, for example.
Independent audits in Denmark, the Netherlands and the EU have all found significant evidence of “climate” projects being mislabelled, or their relevance overstated.
Reflecting on the wider state of climate-finance accounting, Thwaites tells Carbon Brief:
“I think understanding of climate finance is getting better, both through improvements in official reporting and through greater scrutiny from journalists and civil society. But as those third-party audits have shown, there is much room for improvement.”
All of this is further complicated by the lack of transparency from governments, when reporting their official climate-finance contributions to the UNFCCC. The lack of detail in submissions makes it difficult to assess the relevance of each project for tackling climate change.
For example, NGO FragDenStaat has documented its difficulties evaluating the German government’s claim that its climate finance reached a “record level” in 2022.
Poor transparency makes it difficult for those in developing countries as well. Turkish banks have received millions of dollars in climate finance from Germany and France, but there is little information provided either by the banks or the donors on how it is used.
“Citizens have no access to any information about these public funds,” Özgür Gürbüz, campaign director of the Turkish NGO Ekosfer, tells Carbon Brief.
Sehr Raheja, a programme officer specialising in climate finance at the Centre for Science and Environment in India, tells Carbon Brief:
“Implications…include the inability to clearly hold actors accountable, or even first understand the complete reality of the situation of climate finance for developing countries.”
Such scrutiny is important. The UK has traditionally been viewed as one of the more rigorous climate-finance reporters, but the government loosened its accounting system in 2023 to bring it more in line with those of less strict donors.
In doing so, an independent audit found that the UK added an extra £1.7bn ($2.2bn) to its projected climate finance spending without contributing any new funds, as the chart below shows.
3. Some climate finance is not helping to tackle climate change
Climate-finance databases contain details of tens of thousands of projects operating in developing countries around the world.
Most of these projects have clear links to tackling climate change. They might, for example, support solar power projects in Kenya, the construction of a train line in India, or improving the climate resilience of drought-prone farms in Guatemala.
However, among them are aid projects that may bring benefits to the target countries, but have little or no relevance for tackling climate change. Some could even undermine such efforts, by supporting fossil fuels and carbon-intensive sectors.
Stacy-ann Robinson, a climate-adaptation finance researcher at Emory University in the US state of Georgia, tells Carbon Brief that some climate finance “has been going to questionable places to support objectives that are clearly not related to…reducing vulnerability or increasing resilience”.
Some assessments indicate that “inaccurately” categorised climate projects are relatively common among the largest donors, notably Japan and France. NGOs have also identified many “troubling and high-emitting projects” reported as climate finance by MDBs.
Over the years, researchers and journalists have unearthed climate finance being used to, for example, buy uniforms for park rangers, support anti-terrorism programmes and fund luxury hotels.
However, the overall lack of transparency makes it difficult to ascertain exactly how much money from these “questionable” projects is feeding into the official totals reported to the OECD.
An investigation by Reuters in 2023 uncovered $3bn of finance reported to the UNFCCC that had gone towards “programmes that do little or nothing to ease the effects of climate change”. However, Reuters noted that its review only covered around 10% of countries’ submissions.
Carbon Brief has identified at least $6.5bn of finance attributed to projects involving coal, oil and gas that has been tagged as climate-related in the OECD’s climate-related aid database, over the decade from 2012-2021. If countries have followed their own guidelines for reporting climate finance, much of this money will have been reported to the UNFCCC.
Japan is frequently cited for labelling fossil-fuel finance as climate finance, including billions of dollars for coal- and gas-fired power plants in places such as Bangladesh and Indonesia.
However, Carbon Brief’s assessment of the data reveals that some European countries have also been reporting smaller amounts of fossil fuel-related “climate finance”.
For example, Sweden counted around €5m for a gas-fired power plant in Mozambique between 2012 and 2015, while Germany supported a gas power plant in the Ivory Coast in 2022. In both cases, the governments have confirmed to Carbon Brief that projects marked in the OECD registry were also reported to the UNFCCC.
Defenders of fossil-fuel finance argue that developing countries need investment in cleaner or more efficient fossil-fuel infrastructure – and that this does, in fact, reduce emissions. Others argue that these funds simply should not be labelled as climate-related.
Another example of questionable climate finance comes from the French development finance institution Proparco, which provided a €20m loan to Cabo Verde Airports in 2023, a subsidiary of French construction company Vinci Group.
This project was too recent to have been officially reported to the UNFCCC. However, Proparco has reported that 20% of its financing for the project would lead to “climate co-benefits”, such as “renewable energy investments, the installation of LED lighting and the replacement of air-conditioning systems”.
At the same time, Vinci Group says its other goal is to help Cabo Verde boost tourism through increased traffic at its airports. The company has celebrated “record passenger numbers” at its Cabo Verde airports, where traffic increased by 17% year-on-year in August thanks to rising passenger flows from western Europe.
4. Reliance on loans ‘overstates’ climate finance flows
Most climate finance is delivered as loans to developing countries and their institutions. This is one of the most contentious issues in international climate-finance reporting.
More than half of the bilateral finance committed by wealthy countries – and around three-quarters of the investments by MDBs – comes in the form of loans, as shown by the red bars in the figure below.
In fact, the nations that consistently rank among the largest climate-finance providers – Japan, France and the US – all provide the majority of their climate finance as loans.
Loans have to be paid back, leading to climate finance returning to contributor countries as profits, through repayments plus interest. This has led to accusations by civil society groups that developed countries “overstate” their climate finance by leaning heavily on loans.
Public climate-finance institutions generally offer loans at lower-than-market “concessional” rates, or else with longer repayment periods.
However, Carbon Brief analysis shows that at least $18bn of official climate finance reported by developed countries between 2015 and 2020 – roughly 10% of the total – was “non-concessional”, as the chart below shows. (While less desirable than loans officially described as “concessional”, these public institution loans are still generally offered at better-than-market rates.)
The reliance on loans is especially controversial amid the debt crisis facing many developing countries.
The world’s least-developed countries and small-island developing states collectively spent twice as much repaying debts in 2022 as they received in climate finance, according to analysis by the International Institute for Environment and Development (IIED).
There has been considerable pressure from civil society, researchers, developing countries and even UN climate chief Simon Stiell to increase the “concessionality” of climate finance.
NGOs, such as Oxfam, argue that climate-related loans should be reported as “grant equivalents”, rather than at face value. This is a measure of how much the developed-country government is subsidising the loan.
Since 2018, development aid reported in the OECD’s database has been expressed in grant equivalents in order to better communicate the “financial effort” being made by donors.
However, when the OECD reports progress towards the $100bn climate-finance goal, drawing from developed countries’ reports to the UNFCCC, it still uses face-value figures for loans. This is one of the key reasons that developing countries have disputed these figures.
Oxfam releases an annual report that drastically downgrades the OECD figures, primarily by using grant equivalent values. Rather than exceeding the $100bn goal in 2022, the NGO argues that developed countries’ true financial effort only amounted to around $28-35bn that year.
From 2024, countries will be able to start reporting loans in grant-equivalent amounts to the UNFCCC in the newly introduced “biennial transparency reports” (BTRs) that all nations must file under the Paris Agreement. However, they are not required to do so, meaning it is unlikely that an “official” total for grant-equivalent loans will be available.
5. Countries are reporting money that may never get spent
Climate finance only has an impact when it is provided – or “disbursed” – to people and institutions who can use the money.
Yet some countries, including France, Germany and Denmark, choose not to report the amount of climate finance they have actually provided to developing countries.
Instead, they record the amount they have “committed”, or else a mix of committed and provided sums. These numbers feed into the totals reported by national governments and they count towards the $100bn target, even if the money has not left the donor country.
The OECD defines a commitment as a “firm written obligation by a government or official agency”. Over time, the amount of money provided should match the amount committed.
But between a nation committing money and handing it out, all sorts of things can change, as Mattias Söderberg, global climate lead at the NGO DanChurchAid, tells Carbon Brief:
“In some situations, projects are interrupted. Changes in the context or in the projects or within partners, for example, when there was a coup in Mali, means that committed funds may not be disbursed as planned.”
Climate projects could also collapse because a new government in the donor country decides to cancel the project for political or financial reasons. Other issues, such as shifting exchange rates, can also lead to divergences between committed and disbursed funds.
The reliance on commitments to meet climate-finance targets has drawn criticism. In its 2015 critique of progress towards the $100bn target, the Indian government said it needed “actual disbursements” rather than “promises, pledges or multi-year commitments about promised sums in the future”.
An analysis by ONE Campaign of climate-related aid reported to the OECD found that, of $616bn committed since 2013, data was missing for $69bn of disbursements and another $228bn had not yet been disbursed. (This data is not a direct reflection of “climate finance” under the UN, but it is a rough proxy.)
Some lag between commitments and payments is to be expected. Countries tend to commit to big climate-finance projects and then gradually pay out the money over time.
However, civil society groups have highlighted “significant differences” between committed and provided sums.
In recent years, EU member states have had to start reporting both commitments and disbursements. The chart below shows the sizable gap between the money Germany, France, the Netherlands, Sweden and Italy pledge and the amount they provide.
(It is worth noting that there is significant variability. Sweden sometimes provides more finance than it commits, whereas, in two years, France did not report disbursements at all.)
Identifying climate-finance projects that have completely failed to pay out is difficult. Governments are not obliged to report to the UNFCCC when they have provided finance and neither do they have to update the record to reflect any cancellations or changes.
Reuters identified three French climate projects between 2016-2018 – collectively worth half a billion dollars – that had been cancelled. This equates to 4% of France’s climate finance over this period.
“Commitments look better, so more effort is put into reporting them than into tracking actual disbursements,” Kraus from ONE Campaign tells Carbon Brief.
Civil society groups argue that all governments should start reporting disbursements to reduce the risk of “over-reporting”.
6. Climate finance is used to boost donors’ economic interests
Developed nations provide climate finance in a variety of different ways.
In projects that involve building infrastructure, such as windfarms and train lines, companies must be enlisted to work on the engineering and construction. Often, donor governments will work with firms based in their own countries to carry out climate projects.
The French Development Agency (AFD) has reported that the majority of its aid is entrusted to projects involving at least one French “economic actor”, resulting in significant economic benefits for the country.
Meanwhile, one-third of Japanese climate loans are given with the condition that Japanese companies are hired to work on the project, according to Reuters analysis of OECD data.
Stacy-ann Robinson of Emory University notes that this is not a “black-and-white” issue, as sometimes a company from the donor nation will be best placed to carry out the project. However, she notes that it has implications for capacity building in developing countries.
France has committed billions of dollars towards rail infrastructure in developing countries. Given France’s global leadership in the sector, a significant share of these projects have been implemented by French companies.
Project-level data about which companies are awarded contracts is not reported to the UNFCCC. However, one climate-finance project identified by Carbon Brief involves €230m worth of loans provided by AFD for an express regional train in the Senegalese capital, Dakar. This was co-funded with an extra €1bn from development banks.
While the project has clear benefits for the decarbonisation of transport in Dakar, it also helped several French companies expand their activities in the region.
These include Eiffage, which built the infrastructure; Systra, which provided engineering consultancy services; Thales and Engie, which together won a €225m project to design and build the electricity infrastructure for the train; and Alstom, which supplied trains.
Reflecting on this issue, Robinson tells Carbon Brief:
“Perhaps we need regulations around the conditionalities associated with [climate] finance that would reduce the possibility of only French companies, for example, being able to work on these climate-finance projects.”
Another way climate finance might benefit donor nations is through projects that involve hiring consultants and other experts based domestically. One paper notes how such projects can result in money “flowing back to developed countries”.
Previous Carbon Brief analysis found that one-tenth of the climate funds disbursed by the UK between 2010 and 2023 had gone to private consultancies, largely based in the UK.
This article was developed with the support of Journalismfund Europe. Carbon Brief worked with journalists based in France, Germany, Sweden and Turkey, and they provided input on how different countries have been providing international climate finance.
The post COP29: Six key reasons why international climate finance is a ‘wild west’ appeared first on Carbon Brief.
COP29: Six key reasons why international climate finance is a ‘wild west’
With the International Court of Justice’s landmark advisory opinion on climate change hot off the press this July, hopes were high it could be used as a diplomatic lever for stronger climate action at COP30 in Brazil. But it proved a difficult tool to wield in a tense atmosphere.
The advisory opinion (AO) from the world’s top court – which determined that all states have obligations to protect the climate system from significant harm – has already been woven into new climate litigation and existing legal cases, and judges are starting to reference it in their rulings.
The Mexican community of El Bosque in Tabasco even managed to use it as leverage in recent negotiations with the central government over its latest national climate plan (NDC).
Yet, while some countries wanted the ICJ’s non-binding conclusions to feature in the main political decision approved at November’s climate COP in the Amazon city of Belém, the lack of a coordinated strategic push meant that did not happen, legal experts said.
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Monaco, Mexico, the Alliance of Small Island States (AOSIS) and the group of Least Developed Countries (LDCs) all called for the ICJ’s decision – and two other climate advisory opinions from the Inter-American Court of Human Rights and the International Tribunal on the Law of the Sea – to be recognised during various COP30 presidency consultations.
But Jennifer Bansard, the Earth Negotiations Bulletin team leader, told journalists at COP30 that these requests were “at very generic levels” and did not go into the courts’ actionable findings.
“Deep, deep, deep red line”
The closest the ICJ advisory opinion came to being mentioned in a formal text was during a review of the Warsaw International Mechanism for Loss and Damage (WIM). This is key as experts believe the decision has particularly significant implications for the new loss and damage fund.
During these discussions, the Independent Alliance of Latin American and Caribbean Nations (AILAC) said the AO provides “an informed legal foundation” for advancing work on loss and damage. They pointed to “the need for comprehensive assessment and health protection” for vulnerable groups and “forms of reparation” This was supported by Vanuatu, which led the diplomatic work resulting in the ICJ opinion.
But Saudi Arabia, representing the Arab Group, responded that the ICJ’s final outcome is “non-binding” and “does not represent parties’ views” even though it participated in the process. Negotiations, it added, are a “party-driven process based on consensus, and not litigation”.
According to a source in the room, the Arab Group described the inclusion of the ICJ AO anywhere in the WIM document as a “deep, deep, deep red line”. “If you insist on discussing it, we might as well just suspend this session to not waste each other’s time,” said Saudi Arabia’s negotiator. The AO is not mentioned in the final agreed WIM text.
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Harjeet Singh, founding director of the Satat Sampada Climate Foundation and strategic advisor to the Fossil Fuel Non-Proliferation Treaty Initiative, said the group was particularly concerned about the ICJ’s reference to the status of a state as developed or developing as “not static”.
“They feared that formally recognising the opinion would open the door to limitless legal liability for fossil fuel production,” he explained.
Left out of the COP30 cover decision
In addition, the AO’s recognition of a “just and fast transition in line with best available science” was mentioned by Fiji, for the Alliance of Small Island States (AOSIS), at an inaugural meeting on the Just Transition Work Programme. AILAC, Egypt and the UK also raised it during just transition negotiations, while Malawi used it to try to frame transition finance as a legal necessity.
Some states had expected the cover decision to recognise the AO in some form, but text drawn up by Brazil’s COP presidency did not include relevant wording.
The lack of references came despite the fact that the UN asked the ICJ for the advisory opinion unanimously and 96 countries spoke at the hearings.
Data visualisation developed by law professor Margaret Young and designers Dan Parker and Stanislav Roudavski.
Singh said the COP30 battle lines were drawn so sharply on the ICJ opinion because it validates the claims of vulnerable countries for climate justice, while historical and large polluters wanted “to avoid acknowledging any legal framework that implies liability”.
But, he added, while pushing back strongly against it, developed countries “neither championed nor explicitly opposed it in open plenary to avoid negative optics”.
The ICJ’s recognition that COP decisions may have legal effects could also make negotiators more wary of what they agree to.
In the closing COP30 plenary, Palau for AOSIS noted the ICJ’s clear assertion of 1.5C as the legal temperature limit. Yet the final Mutirao decision explicitly reiterates the Paris Agreement’s language of “pursuing efforts” to reach that level, while retaining the original goal of “well below 2°C”.
No coordinated push to champion the AO
Harj Narulla, a barrister specialising in climate litigation and counsel for the Solomon Islands, argued the COP30 decision “undermined” the ICJ’s conclusions. But barring a few nations like Saudi Arabia, he saw the overall outcome as a “failure of capacity and coordination, rather than a principled opposition to using the AO”.
Insiders said government negotiating teams remain too separate from their legal teams, and the former were not properly briefed on how the AO could be used in practice.
The leadership expected from climate-vulnerable countries, particularly the island nations that had advocated for the AO in the first place, also seems to have been absent. A briefing by Ed King and Lindsey Smith, who work on international climate strategy for the Global Strategic Communications Council, described AOSIS’s showing at COP30 in particular as “insipid”.
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Ralph Regenvanu, minister of climate change of Vanuatu and a key architect of the AO campaign, mentioned it several times in public, including at Cambodia’s announcement that it would formally support a fossil fuel non-proliferation treaty. But his focus seemed to be on pursuing a new UN resolution recognising the ICJ’s findings.
Neither AOSIS nor Regenvanu responded to requests for comment.
Influencing the wider narrative
Nonetheless, Mohamed Adow, director of Power Shift Africa who has followed the climate talks for many years, believes the AO is “starting to influence the wider narrative around responsibility and liability”.
“Though it did not make the ‘waves’ in the formal text that many hoped for, it was clearly the ‘undercurrent’ beneath many streams of negotiation,” agreed Singh.
Nikki Reisch, climate and energy programme director at the Center for International Environmental Law, an organisation that supports the youth activists who sparked the AO process, said the opinion also supports “the need to reform the UNFCCC to make it fit for purpose”. That includes preventing fossil fuel industry influence and allowing majority voting so that a handful of countries cannot block climate action.
Eyes on Colombia fossil fuel transition conference
In 2026, the opinion may start to play a stronger role on the global stage, including at an international conference on a just transition away from fossil fuels co-hosted by Colombia and The Netherlands next April.
The Fossil Fuel Treaty initiative says that gathering will align with the AO, “which confirmed that states have a legal obligation to protect the climate, including by addressing fossil fuel production, licensing and subsidies”.
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Experts, meanwhile, expect more domestic lawsuits underpinned by the advisory opinion aimed at pushing countries to raise their ambition on cutting emissions and say inter-state litigation cannot be ruled out.
“COP30 in Belém is by no means the last word on the ICJ AO or the climate duties it confirms,” Reisch said.
A version of this article was originally published in The Wave.
The post Why the ICJ’s advisory opinion on climate change took a backseat at COP30 appeared first on Climate Home News.
Why the ICJ’s advisory opinion on climate change took a backseat at COP30
After holding stable for two years, China’s carbon emissions may climb back up as the construction of new fossil fuel power plants accelerates and recent policy changes cloud the outlook for clean energy, a new report warned.
The world’s biggest carbon polluter is expected to keep total emissions flat in 2025 despite rising energy demand – a sign that clean power may, for the first time, fully offset the growth in electricity consumption, the analysis by the Centre for Research on Energy and Clean Air (CREA) showed.
But the Finland-based research group cautioned that a “concerning” policy environment for the next few years increased the risk of an emissions rebound. It added that China was also set to miss its key target for cutting carbon intensity – CO2 emissions per unit of gross domestic product – this year, meaning steeper reductions will be needed to hit its headline 2030 climate goal of slashing carbon intensity by 65%.
Belinda Schäpe, China policy analyst at CREA, said it was unclear how strongly committed China remained to its targets, despite leaders’ assertions that the government always makes good on its climate promises.
“All of this uncertainty raises a lot of questions around where emissions are going,” Schäpe told Climate Home News. “At the moment, it’s very finely balanced. They are just about flat but could well go up or down again based on the decisions that the government will make.”
New pricing model for renewables
Record solar energy installations and strong growth in wind power capacity have increased the share of non-fossil fuel electricity this year, with emissions from the power sector set to decline for the first time since 2016, the report said. But that progress has been partially countered by the rapidly growing use of coal for the production of plastics and other chemical products, meaning overall emissions are expected to remain stable.
At the same time, experts have warned that China’s new pricing system for solar and wind projects risks slowing the clean energy boom. Under the new policy introduced last June, developers of new solar and wind power plants need to secure contracts with provincial authorities through competitive auctions, instead of being guaranteed a fixed price.
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Schäpe said prices had been “very, very low” in some of the auctions so far. “Of course, that’s great for consumers, but it’s really bad for project developers because they don’t want to go ahead and invest in new projects facing the risk of no returns,” she said.
Earlier this year, the International Energy Agency (IEA) cut its forecast for China’s 2025-2030 renewables growth by 5% due to the changes in the pricing model. The watchdog’s head Fatih Birol said the profitability of renewables projects – especially solar and wind – was expected to decline between 10% and 15% with the new policy.
Coal power boom continues
Coal power plants, on the other hand, are protected from this market-based system, relying instead on long-term power purchase agreements that lock in prices, Schäpe said, describing it as “unfair competition”.
China’s rapidly expanding coal power fleet is adding to the concerns. In 2025, the country has added the largest amount of coal-fired capacity since 2015, while progress on retiring older plants remains very slow, CREA’s report highlighted.
This runs contrary to a pledge made by President Xi Jinping in 2021 to “strictly control” new coal power projects. That commitment was omitted from Beijing’s updated national climate plan (NDC) submitted in late October ahead of COP30.
In its new NDC, China set an absolute emission reduction target for the first time, committing to cutting its greenhouse gas emissions by between 7% and 10% by 2035 from unspecified “peak levels”.
Focus on next five-year plan
Schäpe said that the absence of a base year could create an incentive to raise emissions and “storm the peak” – pushing them as high as possible to make future reduction targets easier to meet.
She said this put the focus on China’s 2030 carbon intensity target, adding that if Beijing was still serious about meeting it, emissions would need to peak “around now”.
China targeted an 18% reduction between 2021 and 2025, but it is projected to achieve about 12% by the end of this year, CREA’s report said. If that is confirmed, China will then need to significantly ramp up efforts to cut carbon intensity in the next five years to achieve its headline climate commitment for 2030.
Analysts expect China’s new five-year plan – the blueprint for its economic development – to provide more clarity on the country’s energy policies next year.
“We will see how the government is going to balance these two opposing forces: the outgoing coal industry interests and the new cleantech sectors that are meant to become the driver of future growth,” Schäpe said.
The post China risks emissions rebound amid policy shifts, experts warn appeared first on Climate Home News.
China risks emissions rebound amid policy shifts, experts warn
Saudi Arabia, Russia and Iran are among countries opposed to discussing options for agreeing on global norms to protect people and the planet from the impacts of mining, processing and recycling minerals needed for the clean energy transition, documents seen by Climate Home News show.
Environment officials gathered in Nairobi, Kenya, ahead of the UN Environment Assembly (UNEA) next week are discussing a resolution by Colombia and Oman that aims to make mineral supply chains more transparent and sustainable at a time when growing demand is spurring resource-rich countries to court investment and boost production.
They have proposed the creation of an expert group to identify a range of binding and non-binding international instruments “for coordinated global action on the environmentally sound management of minerals and metals” from mining to recycling. The group would also look at how to handle mining waste and provide guidelines on recovering minerals from tailings responsibly.
Those instruments could range from a global minerals treaty to a non-binding declaration or set of standards on best practice. The resolution is co-sponsored by Armenia, Ecuador and Zambia.
Colombia has previously called for an international minerals treaty to define rules and standards that would make mineral value chains more transparent and accountable.
China, US on the sidelines for now
But Iran, Russia and Saudi Arabia, which is emerging as a major player in mineral supply chains, oppose launching a process that could lead to an international agreement on the issue, according to several sources and documents shared with Climate Home News.
Countries will vote on the proposal next week, during the seventh session of UNEA, the world’s top decision-making body for environmental matters.
China, which dominates the processing of 19 of 20 minerals deemed critical for the global economy, has so far stayed quiet about the proposal, but analysts said Beijing was unlikely to support any supranational initiative to govern mineral supply chains.
China’s priority is “to remain sovereign throughout the process of how these minerals are produced and traded” and to promote cooperation “on its own terms”, said Christian-Géraud Neema, an expert on Chinese engagement in Africa’s transition minerals sector and the Africa editor of the China-Global South Project.
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The US, which has been trying to counter China’s critical minerals clout, is not attending UNEA, while the EU – another major global market – is understood to broadly support the proposal.
A spokesperson for the US State Department said: “Our team in Nairobi is focused on the US-Kenya relationship and delivering results for the American people, rather than litigating endless woke climate change theater.” The European Commission did not immediately respond to a request for comment.
Several other countries have raised objections. Chile, a top producer of copper and lithium, wants to narrow the focus of the resolution to voluntary cooperation on illegal mining.
In Africa, most countries back the Colombia-Oman proposal, but Uganda and Egypt oppose it, said Nsama Chikwanka, director of Publish What You Pay Zambia, an NGO focused on resource sovereignty.
“Race to the bottom”
Campaigners say countries should unite at UNEA to pave the way for talks on the issue, with some saying binding rules should be the eventual target.
“The investments that are coming to countries like Zambia are from multinational enterprises and national laws are inadequate to ensure that robust standards are applied. So we need something that is internationally binding,” Chikwanka said.
This comes after opposition from China and Russia thwarted a push by mineral-rich developing countries as well as the UK, the European Union and Australia to reflect the environmental and social risks associated with mining-related activities in the outcome of COP30.
“What we are seeing at the moment is a huge race to the bottom of environmental standards at the same time as the impacts of mining are already immense,” said Johanna Sydow, a resource policy expert who heads the international environmental policy division of Germany’s Heinrich-Böll Foundation.
“It is the chance now to create a long-lasting space for governments to work together on this issue,” she told Climate Home News.
The race to extract minerals like lithium, nickel, copper, cobalt and rare earths needed to manufacture batteries, solar panels, wind turbines and other advanced digital and military technologies has led to growing cases of human rights violations, social conflict and environmental harms around the world.
In Indonesia, nickel mining is fuelling deforestation, in Zambia, copper mining has led to catastrophic leaks of mining waste and in Latin America, Indigenous Peoples say the rush to extract lithium for batteries is trampling their rights.
In 2024 alone, the Business and Human Rights Resource Centre recorded 156 allegations of human rights abuses linked to the mining of energy transition minerals.
Counter-proposals favour non-binding measures
Opposed to global discussions about possible binding tools to govern mineral supply chains, Saudi Arabia and Iran have instead suggested the creation of a technical platform that could review the impacts of mineral extraction in developing countries, explore options for support to address them, and advance voluntary cooperation on environmentally-sound practices.
Digging beyond oil: Saudi Arabia bids to become a hub for energy transition minerals
Saudi Arabia is already cooperating with mineral-rich nations on its own terms by investing billions of dollars in transition minerals abroad in a bid to become a global mineral processing hub that could become a counterweight to China’s dominance.
China, meanwhile, threw its weight behind a G20 agreement on a voluntary and non-binding Critical Minerals Framework intended to ensure that mineral resources “become a driver of prosperity and sustainable development”.
At the G20 leaders’ summit in South Africa last month, which was snubbed by the US, China also launched an economic and trade initiative on minerals, aiming to secure access to minerals in exchange for cooperation on technology, capacity-building and financing.
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At least 19 countries, including Cambodia, Nigeria, Myanmar and Zimbabwe, alongside the UN Industrial Development Organisation, have reportedly joined the initiative.
For Neema, of the China-Global South Project, this is an explicit attempt to counter resource diplomacy by the US, which is offering developing countries security and military support in exchange for minerals.
“Producing countries in the Global South are more likely to be attracted by this approach because they know that the likelihood of Chinese companies and banks showing up is quite high,” he said.
The post Proposal for global minerals deal meets opposition as China looks away appeared first on Climate Home News.
Proposal for global minerals deal meets opposition as China looks away
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