COP30: The climate crossroads where finance and fossil fuels collide

COP 30 an important Climate Conference under United Nations Climate Change is being held at Belem Brazil during November 6-21. The COP 30 has seen several significant initiatives and declarations, however major binding agreements particularly in the areas of transition away from fossil fuels where more than 80 countries have supported a call for a roadmap to transition away from fossil fuels, however, some major producers of fossil fuels resist specific language on this and it is expected final decision will be taken which is still under negotiation.

Another major issue is Climate finance, which is very much vital for enhanced adaptation execution as well higher contribution and implementation of loss and damage Fund. The developing countries have been demanding that Developed nations who are primarily responsible for current temperature being high with heat waves and heat warming in the last three years, have to take the responsibility with higher contribution by way of climate finance made available particularly through grants and aids along with funds from private sector participation as well from multinational banks to bear the cost of adaptation plans implementation to substantially reduce the climate change risk events.

The level of support so far pledged is much lesser than the demand and the need from developing countries and in the beginning a roadmap from Baku to Belem has been released which reiterate the need for climate finance plan (developed by the COP presidencies of Azerbaijan and Brazil, aimed at delivering $1.3 trillion annually by 2035 to developing countries for climate action).

With US absence from Climate Agreements who should support for such climate finance is a major handicap. There has been demand that China and India should also contribute towards climate finance as their per capita income has gone up which issue has not found favour with these two countries as they are also from developing countries and they are also demanding higher contribution from Developed nations.

Heads of nations from China, India, Russia were absent from the COP 30 even though their officials were present. USA has not sent officials also. UK and European Leaders even though present their measures like Carbon Border Adjustment Mechanism (CBAM), a policy puts a carbon price on certain imports to EU to ensure they face similar carbon costs as domestic products which has not found favour and thought to have negative impacts, primarily on the export oriented carbon intensive industries of non- EU developing countries such as India and China.

These negative effects include reduced export competitiveness, potential economic disruption and significant adminstrative burdens. The European Union mounted a firm defence of its Carbon Border Adjustment Mechanism at COP30 saying that the policy is not a unilateral trade measure. However, tension exists as both India and China view CBAM as a potential trade barrier

In the absence of big tall Leaders, China and India has taken the prime position to express the demands and stand of developing countries particularly on behalf of low income and less developed countries and vulnerable countries as advocate of the Global South particularly in matters of providing financial support for adaptation and loss and damage.

COP30 President Andre Correa do Lago has praised both India and China for leading the clean energy transition through vast scale and technological development which driving down the cost of clean tech globally. India, in particular using its domestic climate action, e.g., (achieving renewable energy targets ahead of the schedule) to project credibility and more confident diplomatic posture. China is attempting to fill the void left by the US in some areas, aiming to portray itself as leader in green transitions, while India is working to position itself as a bridge between global North and South.

COP 30 was set to end on Friday, but there has not been able to seal a deal as European Union refusing to accept a draft deal it said would fall to advance global efforts to curb greenhouse gas emissions driving climate change with the result the summit struggles to reach fossil fuels phase out deal thereby the outcome of Brazil’s COP 30 climate summit was left hanging in the balance.

The oil producing countries particularly Arab group of nations had warned any mention of phasing out fossil fuels in final negotiations would see the talks collapse. In view of the same, the final draft didn't mention anything about fossil fuels phase out whereas the European union refusing to accept a draft deal it said would fall to advance global efforts to curb greenhouse gas emissions driving climate change.

UK Energy Secretary ED Miliband said: “A deal to create roadmap away from fossil fuels needed to happen one way or another.”

The draft deal also called for global efforts to triple the financing available to help nations adapt to climate change by 2030 from 2025 levels. However the draft deal was silent as to how this climate finance would be made available, whether this money would be provided directly by wealthy nations or other sources including development banks or the private sector.

The commitment made in 2021 during COP 26 in Glasgow, for adaptation funding which needs to be doubled from $20 billion to $40 billion, is expiring this year and the Least Developing countries (LDCs) had called for a clear milestones for post adaptation finance targets.

But the latest draft stops far short of that demand. It merely ‘calls for efforts’ to triple adaptation finance compared to 2025 levels by 2030. Further, it ‘urges’ developed country Paries to increase the trajectory of their collective provision of climate finance for adaptation to developing countries Parties.

It is absolutely essential for Least Developing countries which are already facing climate threats and risks to a greater extent, in the absence of climate finance not being made available by Developed countries and there is much uncertainty in providing provision for climate finance by wealthy nations, there will be gap in funding adaptation plan in the Least Developing countries.

The latest United Nations Environment Programme Adaptation Gap Report has found that as per current trends, the Glasgow Climate Pact Goal will not be met. It revealed that developing countries, including India, will need at least $310 billion every year by 2035 to adapt to climate change, nearly 12 times more than the current international public finance available.

As developed countries and wealthy nations are not coming forward for any higher Commitment and in the absence of any specific mention about the quantum of such finance and sources of such finance, the developing countries and vulnerable countries plan for adaptation will suffer lack of adequate finance whereas on the other hand these countries are already struggling with escalating climate change impacts in the form of extreme weather events which are threatening lives and livelihoods.

Most of the vulnerable countries cannot afford to borrow as debt in view of already high in debt and as such they need aides and public funds that does not add to their debt.

As of Saturday, November 22, 2025, the final outcome to ‘seal the deal’ at COP 30 has not been reached and negotiations are in overtime.

More than 200 countries who are part of the COP 30 have to agree to seal the deal and currently heated argument and discussion are primarily on Fossil fuels phase out, Climate Finance. Let us hope the COP 30 will be able to finally arrive at at a mutually acceptable proposition on these two issues are they are absolutely essential and imperative in the current increasing climate incidents and the extent of loss and damages suffering which has to be mitigated and enhanced adaptation plans and finance should be made available so that the objectives of these COP meetings could be found really helpful at the ground level.

(The author is former Chairman & Managing Director of Indian Overseas Bank)