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Ahead of the 29th Conference of Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC), negotiations failed to reach consensus on finalising financial commitments by the member countries. The COP29 is slated to be held in the Azerbaijani capital of Baku in November, this year.
The negotiators representing the member countries had assembled in Baku to adhere to the new climate finance goal for our climate-risked world. The set of goals are known as the New Collective Quantified Goal on Climate Finance (NCQG).
The negotiating parties had met for the third Ad Hoc Work Programme and the 11th Technical Expert Dialogue on the NCQG in Baku between September 9 -12. These meetings were in continuation of the previous talks held in Colombia and Germany in April 2024 and in June 2024 respectively.
Where the negotiations stand
The negotiating countries were presented with an updated input paper prepared by the Co-chairs of the meeting. The paper reflects the proposals gathered from multiple discussions between the parties over the past year.
This document is meant to be submitted during COP29 as a pathway towards final negotiations on NCQG at the political level. The paper presents varying options reflecting the differing positions of negotiating countries on the subject of climate finance.
The discussions ranged over crucial issues on the aspects of sources, instruments, recipients, access, transparency and the way forward for the post-2025 climate finance goal.
While there were aspects of the input paper that various negotiating blocs could agree upon, there were many critical concerns, particularly from the Global South, that remain unresolved.
It is important to note that in 2009, developed nations had committed to an annual target of $100 billion as part of the Copenhagen Accord for supporting climate action in developing nations.
However, various reports point towards this target not being met in any single year till 2022, since its announcement. In that regard, the NCQG presents a critical opportunity to address historical injustices and find actionable solutions to one of the most pressing challenges of our time.
One of the main points of difference between the Global North and South was the lack of a comprehensive definition of ‘climate finance’, which leads to ambiguities, misrepresentations and unfair accounting practices.
The independent alliance of Latin America and the Caribbean (AILAC) stated that the current version of the text does not do justice to the evolving needs and contexts of developing countries.
The assurance that NCQG is meant to support developing countries would enable real headway in discussions. A regional balance (of different contexts and realities) needs to be reflected in the goal, and this point was supported by multiple parties from the Global South.
The African group supported a stronger focus on adaptation, loss and damage, with instruments such as concessional finance and grant-equivalent finance, rather than market-term loans.
These proposals were also supported by the Least Developed Countries (LDCs) bloc.
The Arab group pointed out that they are yet to see commitment from developed nations on the questions of quantum, responsibility or accountability, stressing that the goal should reflect the sole obligation of developed countries.
The Alliance of Small Island States (AOSIS) urged negotiators not to undermine provisions for Small Island Developing States (SIDS) and LDCs, reiterating that if SIDS and LDCs have access to adequate climate finance, it would follow that all developing countries have the necessary access as well.
The negotiators from the developing countries also warned about not repeating the follies of the $100 billion a year target, while keeping a strong check on debt instruments being used as means of financial support for developing countries. The climate crisis cannot be resolved with a debt crisis.
On the other hand, developed nations stressed that in order for the NCQG to be practical and achievable, the scope of climate finance has to be expanded to include private finance instruments as public resources may not be enough to cover the quantum required. There were proposals of multi-layered investment mechanisms for climate finance as well as expansion of the contributor base in ways that reflect modern economic realities. These points, being outside the ambit of the Paris Agreement, were heavily contested by the Global South representatives.
The latest round of talks in Baku have ended without achieving final consensus between the negotiating parties, and critical issues around the quantum of the goal and expansion of the contributor base have remained unaddressed.
Most negotiating parties have asked for further streamlining of the input paper based on the provisions of the Paris Agreement.
The co-chairs of the meeting are now set to incorporate the latest proposals and comments from the delegates and put together a substantive framework for a draft negotiating text to be presented at COP29 for final consideration.
The path ahead is clearly political, and the need remains for ambition, accountability, clarity and cooperation as we head into the critical decade of climate action.