After two years of stonewalling, governments agreed at COP30 to hold a series of annual discussions about how their trade policies can enable emissions reductions while helping, rather than hindering, economic development. But analysts warn the process may not be able to achieve much in practice.
Since COP28 in Dubai in 2023, emerging economies including China, India and South Africa have been pushing – in the face of resistance from developed countries – to get the UN climate negotiations to discuss “unilateral trade measures”. These, they argue, include the European Union’s imminent tax on imports of certain high-emission products, known as the Carbon Border Adjustment Mechanism (CBAM).
The Brazilian presidency of COP30 bundled trade and other contentious issues such as finance and emissions-cutting together in the summit’s most high-profile outcome: the “Global Mutirão” decision of the Belém political package.
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Under that, governments agreed to hold dialogues on opportunities, challenges and barriers for international cooperation on trade and climate at the mid-year June talks in Bonn for the next three years as well as an additional “high-level event” in 2028, and then produce a report.
Besides governments, other relevant bodies will be asked to participate in the dialogues, including the International Trade Centre, the United Nations Conference on Trade and Development and the World Trade Organization, the decision says.
On its own initiative, the Brazilian government has also launched what it calls an Integrated Forum on Climate Change and Trade, a three-year effort open to all countries that will bring together officials working on the two issues to consider how trade can support sustainable economic growth.
It is expected to develop ways for trade and climate policies to better intersect across key areas such as the energy transition, the fight against deforestation and carbon accounting
Mixed reactions to trade outcome
The formal move to broaden UN climate discussions on trade beyond their previous narrow placing under negotiations on climate response measures and just transition met with a mixed reaction.
One African negotiator, who is critical of the EU’s carbon border tax plan, told Climate Home News that while the UN dialogues are “a start, it is weak to not have a full COP item on it”. “What’s the point if it’s only at Bonn sessions and not going to COP?” they asked. “It’s like they want to kill it in a polite way.”
Aaron Cosbey, a climate and trade researcher at the European Roundtable on Climate Change and Sustainable Transition, said the dialogues are “very unlikely to have any impact” because most trade-climate topics are “just too hot to handle”.
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But Li Shuo, head of the China Climate Hub at the Asia Society Policy Institute, said he hoped the new discussions would help define a constructive role on the issue for the UN climate process, while Arunabha Ghosh, head of the Delhi-based Council on Energy, Environment and Water, said the dialogues represented “progress”.
Ellie Belton, E3G’s trade and climate lead, said referencing trade was a significant step towards addressing trade tensions in UN climate talks. Dialogues, she added, could “offer the space many countries have been calling for to continue collaborative discussions on both the opportunities and challenges, which should help to rebuild trust and unlock enduring solutions”.
The European Union agreed to these dialogues after references to unilateral trade measures – which the bloc regards as a loaded term targeting the CBAM – were downgraded. EU climate commissioner Wopke Hoekstra had told a press conference at COP30 that “we’re not going to be lured into the suggestion that [the EU’s carbon border tax] is a unilateral trade measure, and in that realm we’re also not going to discuss it.”
The final COP30 deal just repeats a previous agreement that “measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade”.
Europe’s contentious carbon border tax
From January 1 2026, the EU will tax imported cement, steel, chemicals, aluminium, hydrogen and fertilisers at a rate depending on the amount of greenhouse gases emitted during their production. The UK will introduce an almost identical policy a year later.
European countries argue that the new levy will level the playing field and ensure companies do not move their production out of the continent to countries with lower carbon taxes and weaker environmental regulations.
They have some international support, with Vanuatu’s climate minister Ralph Regenvanu telling Democracy Now at COP30 that measures such as this are important because they pressure countries to reduce emissions, rather than just relying on voluntary action as much of the Paris Agreement does.
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Nonetheless, China, India, Russia, South Africa and others have argued that the European scheme is unfair, as developing countries cannot afford to clean up these industries on their territory or pay higher prices for green versions of the affected products.
The EU’s recent promise to offer “flexibilities” on the CBAM tax to the US also angered many developing countries, particularly as the bloc rejected calls to exempt the world’s least developed countries.
David Ryfisch, co-head of international climate policy at the Germanwatch advocacy group, praised the border tax for helping European industries decarbonise and pressuring governments outside Europe to improve their climate policies.
But, he said, the EU could have made the policy “more acceptable to other countries if it had consulted with them earlier and if the collected revenues were re-channelled to developing countries for them to accelerate decarbonisation domestically”.
Other issues that could be tackled by these UN climate dialogues and the Brazil-led forum include tariffs on green economy goods such as solar panels. The US has imposed tariffs on panels from China and some other parts of Asia. Meanwhile, other countries including India have introduced tariffs on solar panels in an attempt to encourage domestic manufacturing of clean energy equipment.
The post Trade breaks into agenda of UN climate talks – but will it have teeth? appeared first on Climate Home News.
Trade breaks into agenda of UN climate talks – but will it have teeth?
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New data on international climate finance for 2023 and 2024 suggests that wealthy countries are highly unlikely to have met their pledge to double funding for adaptation in developing nations to around $40 billion a year by 2025 amid cuts to their overseas aid budgets.
At the COP26 climate summit in Glasgow in 2021, all countries agreed to “urge” developed nations to at least double their funding for adaptation in developing countries from 2019 levels of around $20 billion by 2025. Funding for adaptation has lagged behind money to help reduce emissions and remains the dark spot even as the data showed overall climate finance rose to a record $136.7 billion in 2024.
A United Nations Environment Programme report warned last year that wealthy nations were likely to miss the adaptation finance target and the data released on Thursday by the Organisation for Economic Co-operation and Development (OECD) shows that in 2024 adaptation finance was just under $35 billion.
The OECD, an intergovernmental policy forum for wealthy countries, said the increase between 2022 and 2024 was “modest”, adding that meeting the doubling target would require “strong growth” of close to 20% in 2025.
More cuts likely
The OECD’s figures do not go up to 2025, but several nations announced cuts to climate finance last year. The most notable was the abandonment of US pledges to international climate funds by the new Trump administration but the UK, France, Germany and other wealthy European countries also pared back their contributions.
Joe Thwaites, international finance director at the Natural Resources Defense Council, said developed countries were “not on track” to meet the adaptation funding goal.
Power Shift Africa director Mohamed Adow said adaptation finance is needed to expand flood defences, drought-resistant crops, early warning systems and resilient health services as the world warms, bringing more extreme weather and rising seas. “When that money fails to arrive, people lose homes, harvests and livelihoods – and in the worst cases, their lives,” he warned.
Imane Saidi, a senior researcher at the North Africa-based Imal Initiative, called the $35 billion in adaptation finance in 2024 “a drop in the ocean”, considering that the United Nations estimates the annual adaptation needs of developing countries at between $215 billion and $387 billion.
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If confirmed, a failure to meet the goal is likely to further strain relations between developed and developing countries within the UN climate process. A previous pledge to provide $100 billion a year of total climate finance by 2020 was only met two years late, a failure labelled “dismal” by the UAE’s COP28 President Sultan Al Jaber and many other Global South diplomats.
Missing that goal would also raise doubts about donor governments’ commitment to meeting their new post-2025 adaptation finance goal. At COP30 last year, governments agreed to urge developed countries to triple adaptation finance – without defining the baseline – by 2035.
African and other developing countries have pointed to lack of funding as a key flaw in ongoing attempts to set indicators to measure progress on adapting to climate change.
Speaking to climate ministers from around the world in Copenhagen on Wednesday, Turkish COP31 President Murat Kurum stressed the importance of climate finance. “It is easy to say we support global climate action,” he said, “but promises must be kept.”
He said the COP31 Presidency will use the new Global Implementation Accelerator and recommendations in the Baku-to-Belem roadmap, published last year, to scale up climate finance – and will hold donors accountable for their collective finance goals.
He noted that developed countries should this year submit their first reports showing how they will deliver their “fair share” of the new broader finance goal set at COP29 in 2024, to deliver $300 billion a year in climate finance by 2035. They are due to report on this once every two years.
Broader climate finance
The OECD data shows that the overall amount of climate finance – including funding for emissions cuts – provided by developed countries grew fast in 2023 before declining in 2024. In contrast, the amount of private finance developed countries say they “mobilised” increased in both 2023 and 2024, pushing the top-line figure to a record high.
While the OECD does not say which countries provided what amounts, data from the ODI Global think-tank suggests that the 2024 cuts to bilateral climate finance were spread broadly among wealthy nations.
Thwaites of NRDC welcomed the fact that overall climate finance provided and mobilised by developed countries exceeded $130 billion in both 2023 and 2024. He said that this was “well above earlier projections” and “shows that when rich countries work together, they can over-achieve on climate finance goals”.
But Sehr Raheja, programme officer at the Delhi-based Centre for Science and Environment, said these figures are “modest” when set against the new $300-billion goal.
“While the headline total figure of climate finance remains alright,” she said, “declining bilateral climate spending raises important questions about the predictability of high-quality, concessional public finance, which has consistently been a key demand of the Global South.”
She also lamented that loans continue to dominate public climate finance and that mobilised private finance is concentrated in middle-income countries and on emissions-reduction measures rather than adaptation projects. “Private capital continues to follow bankability rather than climate vulnerability or need,” she added.
Ritu Bharadwaj, climate finance and resilience researcher at the International Institute for Environment and Development, said the figures painted an outdated picture as climate finance has since declined as rich countries shrink their overseas aid budgets and increase spending on defence.
Last month, the OECD published figures showing that international aid – which includes climate finance – fell by nearly a quarter in 2025. The US was responsible for three-quarters of this decline. The OECD projects a further decline in 2026.
With Thursday’s climate finance report, the OECD is “publishing a victory lap for 2023 and 2024 at almost the same moment its own aid statistics show the funding base eroding underneath it,” Bharadwaj said.
The post New data shows rich nations likely missed 2025 goal to double adaptation finance appeared first on Climate Home News.
New data shows rich nations likely missed 2025 goal to double adaptation finance
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