Bonn Climate Talks End in Gridlock Over Finance Commitments and Green Trade

The Bonn climate conference, or SB64, was expected to solidify frameworks worked out at COP30 in Brazil in areas like adaptation, the transition away from fossil fuels, trade and just transition. Instead, the two-week conference ended in a stalemate between developing and developed countries on most issues, barring one success.

The clear win was progress achieved on the Just Transition Work Programme, which has now been formalised as the Belem-Anatalya Mechanism. As part of the Action Agenda Launch, the COP31 Presidency had made announcements in the first week of Bonn around raising the share of final energy demand met by electricity to 35% by 2035 from the current target of a little over 20%, reducing growth in global waste by half and reducing energy consumption intensity in the building sector by at least 25% by 2035.

But the failure to reach consensus on the Global Goal on Adaptation (GGA), and the disagreements over trade measures laid bare the difference in priorities for different countries.

For GGA, the core conflict was in the pledge given by developed nations to triple global adaptation finance. While developing countries pushed for formalising the finance promise into formal negotiating text, there was resistance from developed nations, which led to a stalemate.

On the issue of trade, developing nations argued that unilateral trade-restrictive climate measures must adhere to the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC), but developed nations disagreed.

Stalemate

Developing and least developed nations urgently need climate finance to protect their countries from the worst impacts of climate change like sea level rise, agricultural decimation and increasing extreme weather events. The solution was adaptation finance provided by developed nations. At COP30 in Belem, an agreement was reached to triple it. 

At Bonn, developing countries, led by the African Group and Small Island Developing States (SIDS), wanted to take this forward by demanding that this tripling commitment be explicitly codified into the formal negotiation tracks.

But developed countries simply disagreed with having finance commitments be entered into formal negotiating texts. The result was a deadlock, and negotiations on GGA have stalled completely. The onus is now on COP31 to deliver fresh progress on this. 

“Without commitment on climate finance disbursement to developing countries and quality of finance another programme or initiative is not meaningful,” said Labanya Prakash Jena, Director at Climate and Sustainability Initiative (CSI).

According to Sehr Raheja, Deputy Programme Manager, Climate Change and Green Economy, CSE, the language on tripling adaptation finance remains weak on accountability and delivery. “Even though the tripling target was announced as part of the political package at COP30 in Belem last year, civil society has been demanding explicit mention of the same in the GGA decision text as well, so as to ensure there exists a legal hook to hold providers accountable and push for implementation of the target,” she said.

There was also no clear outcome on the future mandate for the Climate Finance Work Programme (CFWP), and as negotiations progressed, there were concerns that the programme might not be explicitly carried forward onto the draft agenda for COP31 in Türkiye.

CFWP was established at COP30 to facilitate discussions on the implementation of Article 9 of the Paris Agreement, particularly the provision of climate finance from developed to developing countries. Originally proposed by developing countries as a forum to advance discussions on Article 9.1—the provision that establishes developed countries’ obligation to provide financial resources—the programme was broadened through negotiations to cover Article 9 more generally. Developing countries accepted that compromise and, according to Raheja, participated in good faith in the workshops and technical dialogues expecting the process to eventually generate substantive outcomes and political guidance.

Raheja said the central problem is not simply the scope of the discussions, but the lack of a clear pathway toward accountability and decision-making. “The process now risks becoming little more than a series of exchanges with no clear outcome and no guarantee that the conversation will continue under political oversight at the COP. Without a pathway to substance and accountability, process becomes a form of delay,” she said.

Regarding trade as well, there is disagreement between the Global North and Global South. Developing countries demand that trade measures must be aligned with Article 3.5 of the UNFCCC and the Paris Agreement. The emphasis needs to be on the principles of equity, and nationally determined contributions (NDCs). 

But developed countries like the EU and the UK argued that this must not undermine a country’s regulatory autonomy, or question how they choose to comply with their own climate commitments. 

“The rejection of the Global Goal on Adaptation text came down to the lack of commitment by developed countries to fulfil their legal obligation to not only provide, but triple finance for adaptation, as agreed at COP30. Discussions throughout the Bonn sessions largely steered away from finance and means of implementation, focusing instead on technical processes and indicators and not the means to implement them,” said Jacobo Ocharan, Head of Political Strategies at CAN International.

Limited Progress

At Bonn, however, there was some silver lining. Negotiators finalised a text outlining the structural functions for a Just Transition Mechanism. It is structured to deliver on three fronts: identifying sectors and geographic territories where workers are most vulnerable to job displacement; mobilising international public finance for regional retraining programs; and facilitating direct technical transfers to help developing nations scale their domestic clean energy workforces.

Also, the 2035 electrification targets announced at Bonn by the COP31 Presidency are ambitious, and much needed, say experts. According to Vaibhav Chaturvedi, Senior Fellow at the Council on Energy, Environment and Water (CEEW), the crisis in West Asia has brought this strategy back into focus. 

“Electrification across sectors is arguably the single most important strategy to boost energy security. The call by the COP31 president is thus relevant not just critical from the long term decarbonisation perspective but from a near term crisis management point of view as well,” he said.

However, the electrification targets need to be aligned with realities of the developing world. For instance, big growing economies like India are still heavily dependent on coal for its booming power needs.

“Electrification of the energy system as a way to decarbonisation without bringing clarity on the source of electricity is not a wise idea,” said Jena.

All in all, the Bonn climate conference ended on a rather sombre note, with developing countries ruing the stalled progress on crucial matters like trade and adaptation. 

Even Simon Stiell, UN climate chief, said in the closing plenary that he witnessed “groups refusing to deliver commitments or allow the process to move forward unless others go first. This is a recipe for gridlock.”