An update on climate finance negotiations at the ongoing COP28 in Dubai, UAE
Delhi-based Centre for Science and Environment’s Sehr Raheja discusses what has happened regarding climate finance at the ongoing 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change in Dubai, United Arab Emirates (UAE).
So far, first of all, all parties have been negotiating on the New Collective Quantified Goal (NCQG) on climate finance. As only technical expert dialogues have been conducted over the last two years, most countries have agreed that, before COP29, the process needs to shift into a negotiation mode. This way, countries can have a better reflection of political considerations and political elements that need the involvement of ministers for the way forward.
On day two of COP28, the UAE presidency formally announced the COP28 UAE Leaders Declaration on a global climate financing framework. The declaration calls on countries and non-country stakeholders to ensure the doubling of adaptation finance to ensure that the $100 billion goal on climate finance is actually met as well as increasing the replenishments to the green climate fund.
The declaration also lists suggestions for countries to increase and widen their fiscal space, including through the use of instruments such as the International Monetary Fund’s special drawing rights for liquidity as well as calls on the multilateral development banks (MDB) to increase and expand their capital base through MDB reforms.
The COP28 presidency UAE also announced a commitment of $30 billion to the catalytic climate vehicle called ALTÉRRA. Its aim is to mobilise $250 billion for climate action through this $30 billion investment by 2030.
COP28 also saw several new announcements in commitments for climate finance by the World Bank — an important non-party stakeholder in the finance conversation. The World Bank has announced that 45 per cent of all of its financing will be used and channeled towards climate action by 2025, of which half is to be used for adaptation and half for mitigation.
The World Bank has also announced the introduction of a high integrity voluntary carbon market, which it sees as one of the most effective ways to ensure money really flows from the developed world to the developing world. They aim to mobilise $125 million credits within the next five years.
Additionally, the World Bank has also announced the introduction and reiteration of climate resistant debt clauses, which will enable countries struggling with debt burdens during climate-induced natural disasters and activities to pause their debt repayment as well as interest for a period of up to two years.
As the first week of COP28 is nearly coming to an end, every element being discussed and negotiated actually relates to finance. On climate finance specifically, negotiations on the NCQG, long-term climate finance and Article 2.1c of the Paris Agreement are expected to yield some results in the next few days.
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