There can be no discussion on enhancing mitigation ambition in developing country Parties without an accompanied discussion on enhancing financial support ambition from developed country Parties, they said
Screen grab of footage by UN Climate Change - Events Climate finance is a crucial issue under discussion at the 58th Subsidiary Body Meetings in Bonn and at the 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCCC) later this year. The world is in the process of negotiating an updated climate finance commitment from the Global North towards the Global South, called the New Collective Quantified Goal (NCQG).
In Bonn, the conference started with countries disagreeing on various agenda items, and consequently failing to adopt the agenda for the conference. One key area of disagreement has been the European Union’s new Mitigation Work Program (MWP) proposal which seeks to accelerate climate mitigation action across all countries. Without a consensus on the conference agenda, conversation around key topics cannot be discussed at COP28 formally.
Bolivia, on behalf of the Like Minded Developing Countries Group has submitted a request to include a joint agenda item of the Subsidiary Body for Scientific and Technological Advice and Subsidiary Body for Implementation on ‘Urgently scaling up financial support from developed country Parties in line with Article 4.5 to enable implementation for developing countries in this critical decade’.
The South American country has cited Articles 4.5, 9.1 and 9.3 of the 2015 Paris Agreement to bring attention to financial support obligations of developed countries which they are required to deliver in order to support enhanced climate ambition in developing countries.
They have pointed out that “there can be no discussion on enhancing mitigation ambition in developing country Parties without an accompanied discussion on enhancing financial support ambition from developed country Parties”.
| Article 4.5 |
States that “support shall be provided to developing country Parties” in recognition of that fact that “enhanced support for developing country Parties will allow for higher ambition in their actions”. |
| Article 9.1 |
Relates to developed countries providing financial resources to assist developing countries with mitigation and adaptation in continuation of developed country obligations under the UNFCCC |
| Article 9.3 |
States that “As part of a global effort, developed country Parties should continue to take the lead in mobilizing climate finance from a wide variety of sources, instruments and channels, noting the significant role of public funds, through a variety of actions, including supporting country-driven strategies, and taking into account the needs and priorities of developing country Parties. Such mobilization of climate finance should represent a progression beyond previous efforts”. |
On June 6, at a side event titled Options for Scaling Climate Finance — Exploring Article 2.1c, the NCQG and JETPs organized by GIZ, UNCTAD, and TERI, experts discussed various issues relating to the NCQG and global financial sector reforms.
Sophia Vargas Lozada, lead climate finance negotiator for the Independent Alliance for Latin America and the Caribbean group, responded to a question on lessons learnt from the “regretfully missed” 100 billion goal.
She said unlike the old $100 billion goal, the new updated quantum should be tied to two critical elements: It should be tied to the needs of developing countries and what climate science is telling us, so it should be bottom-up and top-down simultaneously.
Lozada added that the qualitative elements of the NCQG and the principles attached to the quantum are also key — and it is important that the new climate finance does not generate more debt risks for developing countries and opportunities for more concessional finance should be explored.
She added that rich countries falling short of meeting the $100 billion goal has eroded trust between developed and developing countries.
Alongside the continuously evolving discussions on climate finance in UNFCCC forums, there has also been a parallel global discussion on the urgent need to reform the global financial architecture — one that looks at the urgent need to address systemic financial barriers that are hindering the urgently needed green transition in developing countries.
This includes discussions on issues like resolving the debt crisis in the Global South and increasing the lending headroom of Multilateral Development Banks through an infusion of fresh capital into these banks to address the climate crisis.
Richard Kozul-Wright, director of UNCTAD’s globalisation and development strategies division, was asked a question on how the call for broader global financial architecture reform intersects with the ongoing discussion on scaling climate finance.
Wright said the current international financial system is not fit to deliver on the climate challenge — for mitigation, adaptation, and loss and damage.
He said dealing with the extensive debt burden of countries should be a priority when it comes to reforming the financial system, and that there is a need for greater use of Special Drawing Rights (SDRs — an international reserve asset created by the International Monetary Fund to back reserves of member countries) as part of a more effective financial system.
Wright also added that increasing the capital base of public development banks — including multilateral, regional and domestic development banks and getting more money from development bank balance sheets is a critical component of the reform agenda, in addition to incentivising the private sector to channel finances in accordance with climate goals.
Next week, the Sixth Technical Expert Dialogue on the NCQG is scheduled to commence in Bonn.
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