With the 29th Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change approaching, Delhi-based think tank Centre for Science and Environment (CSE) has issued a position paper on climate finance, which is expected to take the spotlight at the summit.
The paper, titled Show Us the Money, was launched October 28, 2024. It called for a transformative approach to funding climate initiatives in the developing world and urged leaders gathering in Baku, Azerbaijan on November 11, 2024 to commit to an ambitious new climate finance target, with a focus on non-debt creating financial support. The report outlined the stakes and principles for equitable climate finance.
CSE argued that COP29 could be the most consequential climate summit since the Paris Agreement, especially as discussions are set to address the New Collective Quantified Goal (NCQG) for climate finance. This new framework aims to replace the 2009 commitment from developed countries to provide $100 billion annually by 2020 — a target met only once, in 2022.
“We have seen till now that the provision of climate finance by the Global North has been inadequate and the Global South has been repeatedly let down by unmet pledges and commitments. We are hoping to see some change in this status quo at Baku,” said Sunita Narain, director general of CSE, during a pre-summit briefing.
There’s a pressing need for scaled-up climate finance far beyond $100 billion annually. Some estimates point to at least $1 trillion per year — 1 per cent of global GDP — to meet the immediate climate needs of developing countries, the CSE report highlighted.
Avantika Goswami, CSE’s Climate Change Programme Manager, emphasised the importance of non-debt funding, advocating for grants and concessional loans rather than market-rate debt that could burden poorer nations.
“We believe that this can help the Global South further its climate ambition, while meeting its developmental priorities,” said Goswami.
The paper outlined a clear divide in priorities for COP29. Developed nations have avoided defining specific financial commitments and instead support expanding the pool of contributors to include private entities and even other developing countries.
Additionally, they propose integrating “climate-consistent” finance flows — funding aligned with broader climate goals, as referenced in Article 2.1c of the Paris Agreement — into the NCQG framework.
In contrast, developing countries seek an annual finance commitment between $1 trillion and $2 trillion, with a focus on direct public funding from developed nations, rooted in principles of historical responsibility. They argue that issues like climate-consistent finance should remain separate from Article 9 of the Paris Agreement, which mandates direct support for developing nations.
Sehr Raheja, CSE programme officer and report co-author, underlined the necessity of this funding: “The NCQG must also be informed by existing barriers to accessing climate finance that are faced by developing countries, such as a higher cost of capital for green technologies and growing debt burdens.”
In addition to finance, COP29 will address key issues such as carbon markets, scaled-up mitigation targets and adaptation support.
Carbon markets under Article 6 of the Paris Agreement are likely to be a focal point, with countries seeking to establish robust, accountable trading mechanisms.
“If these rules are poorly framed, we risk yet another carbon market that looks promising on paper but fails in practice. If crafted well, they could set the benchmark for a market that actually works — something the world desperately wants to see,” Trishant Dev, CSE programme officer, cautioned.
With adaptation goals in focus, particularly through the United Arab Emirates Framework for Global Climate Resilience, discussions will revolve around working on indicators to track adaptation targets. Meanwhile, the issue of means of implementation (such as finance and technology transfer) in adaptation remains a point of contention.
CSE’s Climate Change team will be on the ground in Baku, monitoring negotiations and providing updates on the outcomes of COP 29, a conference poised to influence global climate finance structures for years to come. For commentary and insights, the think tank has invited media and stakeholders to connect with their team for ongoing coverage and analysis.