Climate Finance and COP29 Outcomes

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Historical Context

• UNFCCC (1992):

  • Article 4(7): Developing countries' climate action depends on finance and technology support from developed nations.

• Paris Agreement (2015):

  • Article 9(1): Developed countries are obligated to mobilize climate finance for developing countries.

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Climate Finance Commitments

• $100 Billion Target (2009):

  • Agreed at COP15, meant to be delivered annually by 2020.

  • Achieved only in 2022, falling short of growing climate finance needs.

• New Collective Quantified Goal (NCQG):

  • Announced at COP29 (2024) to replace the $100 billion floor.

  • Target: $300 billion per year by 2035.

  • Falls short of UNFCCC Standing Committee on Finance estimates:

    • Financial needs of developing countries: $455-$584 billion annually.

    • Covers only half of the needs identified in Nationally Determined Contributions (NDCs).

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Challenges in NCQG

• Lack of Specific Allocations:

  • No minimum allocation floors for Least Developed Countries (LDCs) and Small Island Developing States (SIDS).

  • LDCs demanded $220 billion, and SIDS demanded $39 billion annually, but these were ignored.

• Global Stocktake (GST):

  • GST (2023) estimated economic costs of climate change to reach $447-$894 billion per year by 2030.

  • No significant influence on NCQG outcomes.

 

India's Perspective

• Equity Framework:

  • Advocates "common but differentiated responsibilities and respective capabilities."

  • Calls for a climate finance target of $1.3 trillion by 2030, with $600 billion in grants and concessional resources.

• Rejection of NCQG:

  • Criticized the process and outcomes of COP29, citing lack of consultation and inadequate finance commitments.

  • Linked its future NDC submission to decisions on finance.

5. Broader Implications

• Shortfall in Climate Finance:

  • Developed nations’ failure to meet commitments affects the ambition and implementation of NDCs by developing countries.

• Vulnerability of LDCs and SIDS:

  • Disproportionately affected by climate change; underfunded under NCQG.

• Call for Coherent Finance Architecture:

  • Need for accessible, adequate, and equitable climate finance.

6. Way Forward

• Enhanced Financial Commitments:

  • Developed countries must increase contributions to meet actual financial needs.

• Focus on Grants and Concessions:

  • Ensure finance is accessible to the most vulnerable countries.

• Strengthen Global Cooperation:

  • Build trust and collaboration for fair climate action.

• Support for LDCs and SIDS:

  • Introduce minimum allocation floors to prioritize their needs.