The 29th Conference of the Parties (COP29) commenced this Monday, with expectations high among developing nations, particularly in the Global South, for decisive action on a $1.3 Trillion climate finance mechanism capable of building resilience and addressing climate impacts.
At the forefront is a call for a $1.3 trillion annual fund under the New Collective Quantified Goal (NCQG), with African nations emphasizing the need for financing that is ambitious, equitable, and primarily grant-based.
The Group of 77 (G77) and China, representing developing countries, have united in advocating for the NCQG target of at least $1.3 trillion annually, allocated across key areas including mitigation, adaptation, and loss and damage. This consolidated stance has contributed to advances in promoting adaptation support, despite the limited influence developing countries have over industrialized and emerging economies.
The proposed funding level reflects a critical step for developing nations as the gap widens between their climate adaptation needs and the current financial support available. This disparity underscores the urgency of the NCQG for bridging the funding gap in adaptation finance and loss and damage responses.
In a joint effort, countries across Africa, Latin America, and the broader Global South have united to demand the $1.3 trillion commitment from developed nations. They remain opposed to proposals to broaden the scope of contributors or establish an alternative climate investment goal.
Developed nations, however, have advocated for an expanded contributor base to include richer emerging economies, such as Saudi Arabia and China, as well as broader climate investment objectives, a stance that would lessen the pressure on traditional donor countries. This further heightens the contention about historical injustices and who needs to pay who and how much and by when discussions.
According to Kenyan Environment Cabinet Secretary Aden Duale, Africa’s demand for a new climate financing mechanism is worth $1.3 trillion, which he described as the “irreducible minimum” for the continent.
“Kenya, already facing severe climate challenges, illustrates the urgent need for such funding. Over the last five years, droughts have reduced the country’s GDP by 5%, while floods and landslides have caused more than 400 fatalities, including 42 in Nairobi alone,” he said.
Further pointing out that Africa is introducing a new $1.3 trillion climate financing mechanism to hold polluters accountable and support victims of climate impacts.
Developed nations further argue that increasing their contributions beyond $100 billion annually requires expanding the contributor base and ensuring transparency in how funds are allocated, emphasizing that climate finance should avoid fossil fuel projects or those that undermine human rights. This position is in contrast to that of developing countries, which prioritize grant-based financing over restrictive loan conditions.
Developing Countries’ Priorities for the NCQG
Facing severe climate impacts—such as floods, droughts, food insecurity, cyclones, and heat waves—developing nations seek grants and concessional funding, rather than loans, to meet the $1.3 trillion target within the NCQG.
They believe this fund can expedite progress on Article 2 of the Paris Agreement and bolster their Nationally Determined Contributions (NDCs), National Adaptation Plans (NAPs), and adaptation communications, enhancing both ambition and implementation capacity.
Capital is essential to translating these pledges into action, making COP29, known as the “Finance COP,” a pivotal moment. For countries in the Global South, the NCQG must address their evolving needs, increasing climate finance through diverse sources, instruments, and channels.
Despite limited financial support, NDCs from developing countries reflect ambitious targets, with policy reforms to enhance resilience to climate crises. Public interventions are particularly valuable in these countries, where the cost of climate technologies often far exceeds those in developed regions. However, access to available climate finance remains a challenge for the Global South due to bureaucratic obstacles.
The importance of climate finance is underscored by estimated needs of between $5.0 and $6.9 trillion by 2030, or $455–584 billion annually, according to the Standing Committee on Finance’s second report on developing countries’ needs for implementing the Paris Agreement. Yet, these figures do not fully encompass the needs and costs across all regions, due to data limitations.
