Cop29 host Azerbaijan asks fossil fuel producers to contribute to $1bn climate fund

The host of Cop29, Azerbaijan, announced on Friday the launch of a climate fund with a goal of mobilising $1bn.

It will be backed by annual voluntary contributions from fossil-fuel-producing countries and companies, the Cop29 presidency said.

The Climate Finance Action Fund will be based in the country’s capital, Baku, with Azerbaijan as a founding contributor, and it aims to support climate projects in developing countries.

Cop29 president-designate Mukhtar Babayev told reporters that Azerbaijan was committed to leading by example.

Fundraising drive

“We have heard that communities want action not words and today by launching the climate finance action fund we are taking a significant step,” said Mr Babayev.

“We are calling on donors to join us so that we can fulfil the Cop29 plan to enhance ambition and enable action.”

Azerbaijan - a major fossil-fuel producer on the Caspian Sea - did not disclose how much it would contribute but said more details would be released in the coming months.

Cop29 will take place in Baku, Azerbaijan. Pawan Singh / The National

The Cop29 presidency also announced several other initiatives on Friday and the thematic schedule for the crucial climate talks with just months to go before they start at Baku Olympic stadium.

The pressure is on Azerbaijan for the November 11 to 22 summit as the country had less time to prepare for the talks.

It was only chosen as host at Cop28 last year following months of political wrangling.

Cop29 organisers said the fund was just one of 14 initiatives to raise ambition for the crunch talks at a time when scientists say climate change is driving extreme weather events from droughts to intense floods.

Last year at Cop28, the presidency announced a $30bn fund to mobilise $250bn of private-sector investment by 2030.

The Cop29 fund is the standout part of the 14 initiatives as finance is expected to dominate Cop29 with countries expected to try to reach an agreement on a new target for climate finance.

Investing in the planet

The fund will become operational after the initial fundraising round and when 10 contributing countries have committed as shareholders.

Members will commit to transfer annual contributions as a fixed-sum or based on volume of production and about 20 per cent of revenues generated from investments would go to a “rapid response funding facility” that would help the most vulnerable countries respond to climate disasters.

“This will be the first fund with both fossil fuel producing countries and companies across oil, gas and coal,” said Cop29 chief negotiator Yalchin Rafiyev.

“It will be the first to both provide investment and to address the consequences of natural disasters. And it will be the first to receive annual transfers from its contributors.

"We also have given special attention to accessibility and speed when addressing the consequences of natural disasters and to ensuring that shareholders collectively make decisions.”

Mr Rafiyev told reporters that the fund was an “initial concept" and a working group to be established soon would iron out the details.

The presidency also dismissed concerns that the fund would be seen as controlled by Azerbaijan.

Green vision

Other initiatives announced on Friday include a green energy pledge to commit to green energy corridors, zones and grids; a green energy storage pledge with global targets to increase capacity six times on 2022 levels reaching 1,500 gigawatts by 2030; and a clean hydrogen initiative.

There are also plans for empowering farmers, villages and rural communities; a dialogue on water and climate; and tackling the growing global emissions from tourism.

Another initiative is the “Cop truce appeal” which aims to promote peace, dialogue and reconciliation more broadly.

Azerbaijan said it was also working to submit a nationally determined contribution – or climate action plan – that meets the 1.5ºC goal and the presidency is urging all parties to come forward with similar plans.

“A successful Cop in Baku is more important than ever,” UNFCCC executive secretary Simon Stiell told the briefing remotely.

“But this process is not easy and there is much to do. I am grateful for the hard work of the incoming COP President, his team, and the initiatives they are spearheading to create the grounds for success.”