With just a day to climax the 29th Session of the Conference of Parties of the United Nations Framework Convention on Climate Change, the organizers have released the draft document outlining how funds for the New Collective Quantified Goal on Climate Finance (NCQG) will be mobilized and distributed. However, the amount paid by which country is not mentioned.
The NCQG — a widely discussed topic at the conference — is set to replace the $100 billion climate commitment made by developed countries in 2009. Developing countries grappling with the impact of climate change can leverage funds in the NCGQ to boost adaptation and mitigation.
In the ten-page document released by UNFCCC, developed countries are invited to provide voluntary contributions to finance. However, this voluntary support shall not be accounted for in the NCQG. A variety of sources will be used to generate finance, including public and private mediums.
“[Encourages Parties and other relevant actors to continue to use, explore, develop and][Urges developed country Parties to] scale up finance through the use of grants and innovative instruments that create fiscal space for developing countries including debt for-climate swaps, guarantees, and equities, and instruments that mobilize new sources of climate finance and private finance such as green bonds, hybrid capital, first-loss instruments and local currency lending and high-integrity voluntary carbon markets, taking into account national circumstances in an equitable and just manner.”
Funds will be received through grants, meaning poorer countries will access money through grants, projects, and initiatives. It also provides more finance for adaptation, mitigation, and loss and damage.
“Climate finance provided by developed country Parties for adaptation and loss and damage response shall be grant-based, to the largest extent possible, with the highest levels of concessional afforded to the least developed countries and small island developing states,” the document said.
Option 1 recognized that the goal of collectively mobilizing $ 100 billion per year to address the needs of developing countries by 2020 and through 2025 in the context of meaningful mitigation actions and transparency on implementation was met and exceeded in 2022, reaching USD 115.9 billion.
“Option 2 notes with deep regret that the goal of developed country Parties to mobilize jointly USD 100 billion per year by 2020 in the context of meaningful mitigation actions and transparency on implementation has not been met, and decides that developed country Parties shall mobilize the arrears of the USD 100 billion per year goal by no later than 31 December 2026 and report on progress in doing so with third-party verification and assurance separately from their delivery of the new collective quantified goal.”
Developing countries contribute less than four percent of the greenhouse gas emissions, suffering the brunt of climate impact. Sea level rising, flooding, and drought are vivid phenomena developing nations are experiencing. At the ongoing conference, in which climate finance is high on the agenda, developing countries are seeking $1.3 trillion from developed countries to address loss and damage from climate change.
In the NQGC developed countries such as the U.S., China, Germany, Russia, and Japan, the world’s biggest emitters are supposed to commit to climate funding to the NCQG.
Developing countries at the conference are demanding grants and not loans. “The new climate goal should largely be supported by public finance. This is the commitment of developed countries.” Evans Njewa, Chair, Leased Developed Countries (LDCs), said.
In a joint statement, the LDCs and the Alliance of Small Island States (AOSIS) called on developed countries to commit to the new climate policy to help them address the escalating climate change impacts—which have taken the lives of hundreds of people in LDCs this year and the homes and sources of income of many more.
“Make no mistake, we are paying more than our fair share of climate finance. This burden is forcing our governments to divert resources from essential health care, education, and other development needs. COP29 must deliver finance for the least developed countries—because this global crisis demands a cooperative global response,” said Njewa.
Meeting adaptation, mitigation, and loss and damage needs is critical for the LDCs, with a proposed allotment of at least $220 billion annually in grants. “Climate change brings additional costs to our countries on top of existing challenges, so the goal should not be met through rebranding ODA as ‘climate finance.'” We also don’t expect loans at market rate to be called ‘climate finance’. We need grants.”
Climate finance is critical for addressing the effects of climate change. Developing countries have often relied on rich nations such as the U.S., China, and Germany to provide support to meet emission reduction targets in their Nationally Determined Contributions (NDCs). These supports have been voluntary, with no binding consequences if a country refuses to help. U.S. outgoing president Joseph Biden has provided $11 billion in international climate to poorer nations and initiated several initiatives, and laws including the 2022 Inflation Reduction Act.
Biden reentered the country in the Paris Agreement after his successor, Donald Trump, drew the country in 2017. His reelection has raised global concern since, in fact, during his campaign trail he said that climate change is “all a big hoax” and has vowed to pull out again.
John Podesta, the U.S. head of delegation to the COP29, said it’s clear that the Trump administration will try to take a U-turn and reverse progress on the Biden government climate commitments.
“This fight is bigger than one election, one political cycle, in one country. This fight is bigger still,” Pedesta said in his opening remarks delivered at a press conference in Baku, Azerbaijan.
The U.S. envoy has assured the world of his country’s climate commitment even after Trump is in office.
