(MENAFN- Live Mint) New Delhi: The UN summit on climate change (COP29) on Wednesday released a new draft of the new collective quantified goal (NCQG) after the first version was rejected by developing countries.
“The version released on Tuesday seems obviously written for developed countries to get out of grant or concessional financing responsibilities by allowing any investments (even non-concessional) to be counted towards the goal,” Arun Krishnan, climate finance expert, said.
Mint last week reported India's plan to leverage its climate commitments to pitch for grants and concessional loans, instead of investments for the Global South, at the global climate negotiations in Baku as the developed nations were pushing for investments more.
Developing countries require up to $1.5 trillion a year for their unique climate needs and net zero transition, according to various estimates. However, the loss and damage fund negotiated at an earlier summit has failed to take off after being operationalised.
Read more: COP29: The climate funds math that needs to be reset, explained
The actual climate action funding requirement, however, could be several times higher than the estimates of $1-1.5 trillion. The UNFCCC Standing Committee on Finance estimates that a total of $5.8-5.9 trillion will be needed by 2030 to cover the needs of 153 developing countries.
Even this is likely to be an underestimation given that only a small proportion of requirements were accounted for across the documents provided. Regionally, around $2.5 trillion of global need comes from African states, around $3.2 trillion from Asia-Pacific and around $168 billion from Latin American and Caribbean nations, according to the Asian Development Bank.
Because of the scale of the financing required, some experts and countries, including Switzerland, Canada and the US, have suggested expanding the list of countries mandated to contribute, also called the contributor base, to include emerging countries with high emissions and high incomes.
In the new text released by UNFCC on NCQG, there are three options with several sub-options. The options include provision and mobilisation goals, a multi-layered approach, including investment, provision and mobilisation and option 1 and 2 expressed as a cumulative goal or in combination with a cumulative goal over the time frame.
Read more: Mint Primer: Your two-minute guide to COP29... and dystopia
The group of 10 MDBs, including the World Bank, said their overall climate finance provision is projected to reach $170 billion a year by 2030, up 30% from a record high of $125 billion in 2023.
When the numbers are analyzed, over 70% of the money ($120 billion) is anticipated to go to low-and middle-income countries.
“The NCQG should be aligned with the needs of developing countries and should amount to at least $1 trillion per year, composed primarily of grants and concessional finance. Climate finance must be concessional, catalytic, convenient and credible,” said Arunabha Ghosh, CEO of the Council on Energy, Environment and Water.
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