During the first week of the 60th meeting of the Subsidiary Bodies (SB60) at the June Climate meetings in Bonn, discussions focused on addressing diverse challenges faced by climate finance, particularly concerning the New Collective Quantified Goal (NCQG).
The new climate finance goal to be set under the NCQG is expected to address the needs and priorities of developing countries, as agreed upon at COP21, and is to be developed before 2025. The New Collective Quantified Goal (NCQG) represents a step towards mobilizing equitable, sustainable, and sufficient climate finance following the failure of developed countries to meet their 2009 COP15 commitment of USD 100 Billion annually by 2020.
A key point of disagreement has been how developed countries will deliver on their commitments, ensuring that these are not in the form of loans as in the past. Additionally, the question of how developing countries facing adverse climate change impacts will benefit from climate finance to build resilience remains unresolved despite the loss and damage fund having had pledges at COP28.
According to Imane Saidi, Diplomacy and Cooperation researcher at the Imal Initiative for Climate & Development, NCQG consultations have been held hostage by debates over the reform of the contributor base and the relevance of Article 2.1c of the Paris Agreement. She suggests that these issues fall outside the mandate and stall substantive discussions on defining the structure, timeframe, and quantum of the goal.
“A progressive NCQG text for Africa and other developing countries should move beyond the tactics and conditionalities set by developed country Parties, to avoid their historical responsibility and focus on the core mandate. It should emphasize genuine accountability from developed countries and prioritize the real needs of the developing world,” said Imane Saidi.
Anticipations of a clear financing mechanism are laid on the ongoing Bonn technical discussions with high expectations that this preparatory work sets a clear ambition envisioning a realistic finance target commensurate with the scale of needs and speed required to address the climate crisis.
Reiterating the call for focus on what matters, Stela Herschmann, Climate Policy Specialist at Observatório do Clima, Brazil, stressed the need for developed countries to stop avoiding substantial climate finance conversations, including how much funding is required.
Herschmann urged concrete discussions on climate finance, emphasizing the need for clear proposals and figures to avoid stagnation in the Bonn meetings and prevent a troubled situation heading into COP29.
Financing Needs of Developing Countries
Ali Mohamed, Chair of the African Group of Negotiators, expressed the AGN’s desire to leave SB60 with a progressive draft text ensuring substantial, non-debt-inducing climate finance flows to developing countries. This funding is crucial for fostering non-carbon-intensive and climate-resilient development.
Climate change impacts are increasingly severe in least-developed countries and across the African continent, resulting in significant losses, particularly for the most vulnerable populations. The NCQG aims to mobilize financing for climate needs and priorities of developing countries, encompassing adaptation, mitigation, loss and damage, and just transitions.
Beyond mobilizing financing, the NCQG seeks to clarify the public funding available for developing countries to effectively implement their next rounds of Nationally Determined Contributions (NDCs) and adaptation plans, due in February 2025.
Shifting Away from Loans
The New Collective Quantified Goal financing will involve providing quality support to developing countries with a specific amount the trillions. The African Group of Negotiators (AGN) estimates that a minimum of $1.3 trillion per year by 2030 is needed to answer the needs of the most vulnerable.
“SB60 provides an opportunity to rebuild trust in the principle of common but differentiated responsibilities and respective capabilities,” said Ali Mohamed. “This trust will only be possible if the Bonn meetings offer a specific amount of $1.3 trillion per year by 2030 to adequately cover the needs of the African continent.”
Calls for climate finance to be provided in a form like grants other than loans are increasing, as loans have exacerbated the debt burden of developing countries. Climate financing is supposed to be part of an addition to development finance, addressing the current situation where financial outflows from the continent exceed inflows.
A ONE campaign study of 2023 revealed that debt service repayments have resulted in financial outflows from African countries exceeding inflows, including official development assistance. Despite this data, the technical discussions at Bonn have shown reluctance to define specific amounts for the NCQG.
Quality Financing and Shared Responsibilities
Sven Harmeling, Head of Climate at Climate Action Network Europe, emphasized the need for the EU to significantly increase the quality of financing and shift away from non-grant instruments like loans, which have comprised 50% of funding. Grants are particularly important for vulnerable countries to address the climate crisis, considering the low emissions from the least developed countries and developing countries.
Ultimately, timely action is essential to fulfill obligations, as climate finance is a crucial factor that, if not addressed with due diligence, risks repeating past mistakes. An arbitrary figure based on political guesswork would disregard real needs, duties, and the purpose of the financing sought.
Evans Njewa, Chair of the Least Developed Countries Group, expressed hope that developed countries will provide climate financing that is scientifically based, accessible, and scaled up to meet the needs of developing countries. He also called for agreement on shared commonalities to produce a draft text leading to positive decisions in Baku.
