But let's take a step back first. As early as 2015 and 2018, Diffenbaugh and Burke et al. presented initial results on the economic damage to the LICs and SIDs by showing the damage and losses in terms of the decline in gross domestic product (GDP) in individual countries. The declines in GDP in the individual countries for the years 2050 (in about 30 years) and 2100 (in about 80 years) were analyzed, assuming compliance with the 1.5° target. Yes, you read that right, in line with the 1.5° target. For a country like Sudan, this means that it will lose around 22% of its gross domestic product over the next 80 years. If we do not meet the 1.5° target and continue as before, Diffenbaugh and Burke even calculated a decline of 84% in Sudan's GDP.

All this is well known. But it is also clear that these states need to receive more support from the rich industrialized countries and wealthy emerging markets. Until now, the agreement was that the donor countries would jointly provide an annual climate finance package of 100 billion USD by 2025. This hurdle was first overcome in 2022, with a total of 115.9 billion USD.

This target has now been redefined at the 2024 UN Climate Change Conference, COP29. It was agreed that an annual climate finance package of 300 billion US dollars should be achieved by 2035. Even if many critics still consider this to be insufficient, it represents a significant increase in the financial resources to be made available. A prerequisite for achieving this ambitious goal is that all donor countries actually make their full contribution. That this is not the case, or was not the case in the past, is shown by a study by Colenbrander, Cao, Pettinotti and Quevedo from 2021. Countries such as Spain, Canada, New Zealand, Australia, Portugal, Greece and the USA fulfilled their contribution to well under 25%. Countries such as the United Kingdom, Ireland, Italy and Austria paid only up to 50% of their pledged share. Norway, Sweden and Germany paid their full share already in 2021.

In terms of the new climate finance target, the commitment by China and other wealthy emerging economies, which are still formally considered developing countries, to contribute to climate finance on a voluntary basis from now on is an important milestone.

For developing countries, the annual amount of 300 billion USD is not enough. This was made clear by representatives from Nigeria, Bolivia, India and some island states at COP29 through verbal contributions and their temporary departure from the negotiating round. They are calling for a total of 1.3 trillion USD annually until 2035 and at least 500 billion USD annually until 2030, which was not decided, but was written into the agreements as a target.

Not all of the more than 40,000 participants at COP29 were positive about climate financing. They pointed out the misuse of funds in some developing countries and considered it more sensible to invest money in research projects.

However, the participants at COP29 not only discussed compensation payments to developing countries, but also decided, for example, that climate projects financed abroad should count towards their own national climate targets. But more on that later.

The United Nations Climate Change Conference is the annual meeting of the Conference of the Parties (COP) to the UN Framework Convention on Climate Change. Next year's conference, COP30, will take place in Belém, Brazil.