Context: The recently concluded Bonn climate conference in Germany, expected to outline the political agenda for the crucial end-of-year Conference of Parties 28 (COP28) in Dubai, was critical for reviewing and reforming the climate finance architecture. The conference has exposed a gaping hole in the funding needed to pay for climate action.
What is NCQG?
- At the 2009 CoP, the commitment of ‘$100 billion per year till 2020’ to developing nations from developed countries was set.
- Therefore, under Article 9, the 2015 Paris Climate Agreement agreed to set a New Collective Quantified Goal (NCGQ) for climate financing before 2025.
- The deliberations were aimed at strengthening the global response to the threat of climate change in the context of sustainable development and efforts to eradicate poverty, including by making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.
- The NCQG work programme runs from 2022–24 and includes four technical expert dialogues (TEDs) each year and a High-level Ministerial Dialogue.
- The NCGQ is termed as the “most important climate goal” because,
- It pulls up the ceiling on commitment from developed countries.
- It is supposed to anchor the evolving needs and priorities of developing countries based on scientific evidence and
- It should respond “to the ever-increasing sums of funding, necessary for Loss and Damage in response to failed and/or delayed financial support.
Why do we need a new financial goal?
- The finance provided by developed countries may be inflated and misleading.
- The $100 billion target set in 2009 was seen more as a political goal since there was no effort to clarify the definition or source of ‘climate finance’.
- The economic growth of developed countries has come at the cost of high carbon emissions, and thus they are obligated to shoulder greater responsibility.
- Funds available for climate finance have increased quantitatively, but they are inaccessible, privately sourced, delayed, and not reaching countries in need.
Challenges to NCQG:
- Developed countries argue that NCQG must be viewed as a “collective goal” for all developed and developing countries.
- This argument pushes the “net zero” pathways onto developing countries, which cannot feasibly pay for mitigation, adaptation, loss and damage, along with sustainably developing key elements of infrastructure.
- The technical expert dialogues (TEDs) didn’t establish a clear roadmap for reaching an agreement by 2024.
- In 2021, the standing committee on finance of UNFCCC concluded in its first needs determination report (PDF) that developing countries will need $5.8–5.9 trillion up to 2030 to finance actions listed in their Nationally Determined Contributions (NDCs).
- However, instead of identifying a single aggregate figure, the NCQG could also set separate targets (or subgoals) for focus areas such as mitigation, adaptation, and loss and damage.