CSE-DTE at COP29: G77 and developing country allies reject first draft of climate finance text

Discussions on the headline issue of climate finance are off to a spirited start at the 29th Conference of Parties (COP29) to the United Nations Framework Convention on Climate Change. The G77 and China group — the largest bloc representing over 130 developing countries at the UN climate conference — has rejected the framework for a negotiating text that countries have entered Baku with. 

What is the text to be discussed? 

The substantive framework for a draft negotiating text prepared by co-chairs of the Ad Hoc Work Programme on NCQG was published in October this year. Released as an addendum to the Co-chair’s summary report based on NCQG proceedings throughout the year, the framework was the first formal document that countries were to deliberate on. If this is accepted, they would negotiate on specific aspects of the text, and work to arrive at a consensus by the end of the conference. But the framework for the draft itself was rejected on November 12 by the G77 and China and echoed by other developing country groups.

In the run up to COP29, rumours emerged that Parties had not responded positively to the draft text and were not ready to treat it as a legitimate foundation on which to begin negotiations.

The framework document provides a summary of proceedings and is supposed to be a representation of the suggestions put forward by different countries. The G77’s disapproval is based on their positions being inadequately represented. This has been echoed today by various developing country groups, including the Like-Minded Developing Countries (LMDCs), Independent Alliance of Latin America and the Caribbean (AILAC), Alliance of Small Island Developing States (AOSIS) and Group SUR (Brazil, Paraguay, Uruguay, Argentina). 

What do developing countries want? 

The G77 in their opening statements have detailed several asks: 

· They have requested a new text be prepared by Co-chairs before the next session for the negotiations. 

· They demand an amount of at least $1.3 trillion per year from developed countries for all developing countries. They stated that the new goal must be informed by the evolving needs and priorities of the developing countries. 

· Negotiations must be in line with Articles 9.1 and 9.3 of the Paris Agreement and Article 4 of the Convention; any negotiating text must specify that the mandate is for the new goal to be the “provision” goal from developed to developing countries, in line with obligations in the landmark climate treaties. The NCQG must not be an investment goal. 

· The NCQG must specify what does not count as climate finance, from an accounting perspective; non-concessional loans and export credits cannot be considered climate finance. 

· The new goal must acknowledge the dis-enablers of accessing finance for developing countries that are part of the international financial architecture by design. 

· Additionally, developed countries must provide arrears for the US $100 billion commitment. 

· Resources provided under the new goal must be predictable, new and additional, adequate, grant-based and concessional, and must not create fiscal constraints or indebtedness. 

What developed countries are saying

Developed countries made interventions listing out their own perspectives on the NCQG, for which they are on the hook to be the primary donors of finance.

The United Kingdom expressed that the quality of finance, debt, and conditions for accessing finance are areas on which they can advance discussions, and that finance must come from a wide variety of sources.

Switzerland on behalf of the Environmental Integrity Group stated that the text is imperfect but should not be restarted from scratch. Norway stated that there is a need to steer investment to developing countries, and there is a need to look at more options for the contributor base.

The European Union stated that the quantum for public finance is dependent on many factors such as the sources, contributor base, and timeframe of the finance goal. They also called for more targeted language for SIDS and LDCs.

The US expressed disappointment with the document, calling it ‘unbalanced’. They added that it is essential that the goal helps to scale up investments needed to combat the climate crisis and needs to be a multilayered global investment goal for all countries. They also added that new contributors need to step up, especially those already providing large amounts of climate finance bilaterally. 

Deliberations will continue, but to what extent a new iteration of the framework, if any, will reflect the first round of discussions remains to be seen.