Last update:October 29, 2024, 10:39 AM IST

A new climate finance target is expected to be set at COP29 in Baku to replace the previous pledge of $100 billion/year by 2020 made by rich nations in 2009, which has remained largely unfulfilled.

Representatives from more than 200 countries are set to meet in Baku in November for the biggest climate conference of the year, COP29. (Getty)

Just 1 percent of global GDP — about $1 trillion a year — can help meet the immediate climate requirements of developing countries, the New Delhi-based Center for Science and Environment (CSE) said in its latest paper. position before COP29.

Representatives from more than 200 countries are set to meet in Baku in November for the biggest climate conference of the year, COP29. The UN summit is crucial as it seeks to set a new climate finance target – the first since 2015. The new Collectively Quantified Goal (NCQG) is expected to be a milestone as it will help developing countries vulnerable to climate to keep the temperature targets of the Paris Agreement within reach.

It will also replace an earlier pledge of $100 billion/year by 2020 made by rich nations in 2009, which has remained largely unfulfilled except for one in 2022. It remains that they have limited financial and technology resources .

“COP29 has the potential to become the most important climate conference since Paris, given how crucial financial support is for developing countries to achieve their climate goals. We have seen so far that the Global North’s provision of climate finance has been inadequate, and the Global South has been repeatedly let down by unfulfilled commitments and commitments. We hope to see a change in this status quo in Baku,” said Sunita Narain, Director General, CSE, in her pre-COP briefing.

POLLUTERS MUST PAY IN TRILLIONS

According to the latest report of the UNFCCC’s Standing Committee on Finance (SCF), at least US$5-6.8 trillion in cumulative support would be needed by 2030 to help developing countries meet their Nationally Determined Contributions declared national targets (NDCs). This is higher than the range of $5.8–5.9 trillion proposed in the First Needs Determination Report. Developing countries, especially India, have made strong demands for US$1-2 trillion per year.

In its position paper, the CSE said the NCQG level must be in the trillions and be determined first over a five-year period to 2030. “We believe that this must be provided through debt-free financial instruments, in the first grants and concessions. loans, for the Global South. This can help advance their climate ambition while meeting their development priorities,” said Avantika Goswami, Program Manager, Climate Change, CSE.

LAST CHANCE FOR COURSE CORRECTION

Furthermore, an analysis of national positions revealed that rich countries, led by the United States and the European Union, have so far refrained from negotiating the amount or quantity of funding to be provided. Instead, they turned their attention to other details, such as who should all contribute to it – which experts called “a mere distraction at this stage”.

“The focus now should be on setting that financial target, which will set the course for climate action in most of the world this decade,” Goswami said. “In an atmosphere where confidence in the multilateral process is being eroded, the NCQG is one of the last opportunities for the Global North to correct course, show courage and pay its fair share.”

VITAL FINANCE QUALITY

Experts also pointed out that countries in the Global South are often considered “high risk” environments by private credit rating agencies and face higher interest rates, making investments more expensive than the Global North, through therefore, NCQG should rely on international public finance. , and non-debt flows.

This is another key debate that is likely to rock the negotiations – public versus private funding – with developing countries demanding that the NCQG be more of a public finance objective to be supported by their respective governments. Rich nations, on the other hand, are pushing for the inclusion of private finance.

“The NCQG is critical to enabling global action on climate change. Developed countries can raise more than US$5.3 trillion/year for NCQG through taxation of fossil fuel extraction, aviation and other measures. They even continue to pour money into harmful fossil fuel subsidies,” said Sehr Raheja, Program Officer, Climate Change, CSE, who also co-authored the report.

Other issues likely to dominate the COP29 talks are Article 6 of the Paris Agreement as countries seek to operationalize carbon markets, as well as talks to expand mitigation ambitions and close the growing adaptation gap.