By Valerie Volcovici and Nailia Bagirova

BAKU (Reuters) -The annual U.N. climate summit began on Monday with some prominent leaders planning to skip the event ahead of tough talks on finance and trade, after a year of weather disasters that have emboldened developing countries' demands for cash.

Delegates gathering in Azerbaijan's capital, Baku, hope to resolve the COP29 summit's top agenda item – a deal for up to $1 trillion in annual climate finance for developing countries, replacing a target of $100 billion.

"Let's dispense with the idea that climate finance is charity," U.N. climate chief Simon Stiell said at the Baku Stadium venue. "An ambitious new climate finance goal is entirely in the self-interest of every nation, including the largest and wealthiest."

But the financing goal is competing for attention with economic concerns, wars in Ukraine and Gaza, and the election of Donald Trump, a climate-change denier, for a second term as president of the United States, the world's biggest economy.

Political leaders expected to stay away include U.S. President Joe Biden, Chinese President Xi Jinping and European Commission President Ursula von der Leyen.

The Caspian Sea nation, which is home to the world's first oil wells, faces pressure to make progress on last year's COP28 pledge to transition away from fossil fuels.

Azerbaijan's oil and gas revenues accounted for 35% of its economy in 2023, down from 50% two years earlier. The government says these revenues will decline to 22% by 2028.

One of the first tasks as the summit talks began, was to adapt the agenda to accommodate China's last-minute proposal to discuss trade.

The Chinese proposal - made on behalf of the "BASIC" group of countries including Brazil, India and South Africa - asked for the summit to address "restrictive trade measures" such as European Union carbon border tariffs going into effect in 2026.

Those concerns have been compounded by Trump's campaign promise to impose 20% tariffs on all foreign goods, and 60% on Chinese goods.

China's request showed it flexing its muscles after Trump's election, Li Shuo, director of China Climate Hub at the Asia Society Policy Institute, said.

Trump has called climate change a hoax and said he will again withdraw the U.S. from the Paris Agreement, the global treaty to reduce planet-warming emissions, which he did during his first stint in the White House.

Michai Robertson, finance negotiator for the Alliance of Small Island States, told Reuters the impact his time could be greater given more countries were "leaning right" politically.

"The ball is back in the court of the developed countries and their populations: you all need to get your act together, or we... will suffer because of your negligence," he said.

Despite the Trump concerns, the United States, under the outgoing Biden administration, delivered an early statement of positive climate intent with a world-first deal to guarantee some of the Asian Development Bank's loans.

EXTREME WEATHER

This year is on track to be the hottest on record. Rich and poor countries alike have been challenged by extreme weather events, including flooding disasters in Africa, coastal Spain and the U.S. state of North Carolina, drought gripping South America, Mexico and the U.S. West.

Most countries are not prepared.

"Unless the world collectively steps up its efforts, the impacts of climate change will become increasingly severe and frequent and will be felt by an increasing number of people in all countries, including in the United States," said Kaveh Guilanpour, vice president for international strategies at the nonprofit Center for Climate and Energy Solutions.

Many people gathered in Baku worry U.S. disengagement could lead other countries to backpedal on existing climate pledges or scale back future ambitions.

"People will be saying, well, the U.S. is the second biggest emitter. It's the biggest economy in the world ... If they don't set themselves an ambitious target, why would we?" Marc Vanheukelen, the EU's climate ambassador from 2019 to 2023, told Reuters.

Azerbaijan has lobbied governments to accelerate their move to clean energy while touting gas as a transition fuel.

President Ilham Aliyev has called Azerbaijan's fossil-fuel bounty "a gift of God," and Baku has proposed creating a Climate Finance Action Fund to collect voluntarily up to $1 billion from extractive companies across 10 countries including Azerbaijan.

Azerbaijan's gas exports to Europe this year are expected to exceed 12 billion cubic metres, after 11.8 billion cubic metres last year, as Europe seeks to reduce its reliance on Russian gas.

Azerbaijan has drawn international criticism for jailing political prisoners including journalists and ethnic Armenians whom Baku describes as separatist leaders.

Aliyev has rejected the criticism and said it could undermine peace negotiations with Armenia.

(Additional reporting by Kate Abnett, Gloria Dickie, William James, Simon Jessop and Virginia Furness; Editing by Katy Daigle, Lincoln Feast, Timothy Heritage and Barbara Lewis)