The COP29 UN climate summit released a first draft deal on Thursday, which puts at least US$1 trillion of financing on the table, yet key details on where that money will come from still need to be ironed out.

Host Azerbaijan presented the 10-page draft finance deal shortly before 8am local time. It sparked heated debate among conference delegates in Baku, about the lack of detail on how that level of funding can be achieved, including how much would come from loans that can put pressure on debt-laden poor nations. 

The draft plan appeared to set a funding floor of US$1 trillion a year, coming from a range of sources that go beyond those included in an existing US$100 billion target that expires next year. It included two options on how to get to that goal — one that gives countries time to ramp up to the increased sum, and the other that seeks that sum annually from 2025 to 2035. Both would open the door for wealthy nations that aren’t currently donors, such as China and Saudi Arabia, to offer support.

In one option, “developing country parties willing to contribute to the support” would be invited to provide that help voluntarily, without it being counted towards the annual pledge. A second option makes clear that developed countries take the lead in pursuing the new finance goal, including “efforts of other countries with the economic capacity to contribute”.

Yet many key numbers were left blank and will form one of the battlegrounds over the next days. Thorny questions over the scale of the finance — including how much would come in the form of affordable support, with grants or deeply discounted loans — were left unresolved.

“The lack of a clear bridging proposal and any numbers leaves negotiators with a huge amount of progress to make, over the next day or two,” said Rob Moore, associate director at E3G. 

Developed country negotiators, including those from the European Union and the US, have said any deal needs to be balanced between finance and securing the emissions-cutting ambition.

A key element at this year’s climate summit has been to reaffirm a pledge made last year at COP28 in Dubai, to transition away from fossil fuels. That objective features in just one of four possible options in a separate document, under the implementation of the so-called Global Stocktake, which aims to get countries to bridge the big gap between climate targets and current actions towards them.

“Other than capturing the groundstanding of both sides, this text hardly does anything more,” said Li Shuo, director of the Asia Society Policy Institute, referring to the draft deal on finance. “We are far from the finish line.” 

  - Bloomberg