Nations come together in Azerbaijan next week for annual talks about how to address and reduce the ever-increasing effects from the burning of fossil fuels.
This year’s negotiations need to agree to a new climate finance goal to replace the previous commitment dating back to 2009 of $US100 billion annually by 2020, which was only achieved with a two-year delay in 2022.
Final talks in preparation for COP29 about the shape of the new goal, known as the New Collective Quantified Goal (NCQG), have been ongoing throughout 2024. A draft framework has been agreed but three major sticking points can be highlighted.
The first is the donor base.
While initially the “elephant in the room”, developed countries have increasingly and more openly brought up the point that the economic realities have changed. A number of countries considered to be “developing” under the climate change convention from 1992 have built wealth by consistent GDP growth, and with that increased greenhouse gas emissions.
While the new goal requires an increased financial commitment from its predecessor, it must be realistic and achievable if nations want to avoid setting themselves up for failure.
Most notably, China is now the world’s second largest economy and emits more than three times as much carbon dioxide as the United States, taking up a third of the total global greenhouse gas pie. The countries of Southeast Asia are the most rapidly growing region and estimates by the International Energy Agency suggest that they will account for over a quarter of global energy demand between 2010 and 2035, which equals an increase in greenhouse gas emissions by 35% between now and mid-century.
Despite many developing countries opposing the push to reflect these evolving circumstances and responsibilities in the new design of the finance goal, a recent analysis by the Lowy Institute has revealed that South-South flows, particularly in Southeast Asia, already exist, with the largest amount provided by China. While it might be unreasonable to expect financial contributions from developing countries, such flows, at the very least, should be captured for reasons of transparency and accuracy of climate finance flows.
The second point of contention is the quantum.
The African group and India demand financial assistance to cope with the impacts from climate change while developed countries have been silent on a figure. The previous $100 billion goal was reached in 2022, and while the new goal requires an increased financial commitment from its predecessor, it must be realistic and achievable if nations want to avoid setting themselves up for failure.
Third, countries need to agree on a time frame for the provision of the goal.
Various suggestions were put forward that range from five, 10 or 20 years, a close link to various re-occurring milestones within the Paris Agreement or interim revision cycles within time frames.
Regardless of which option is agreed, there is an urgent need for action now. The most vulnerable developing countries, in particular, are being hit hard by intensified cyclones, droughts and rapid sea level rise. Many Pacific Islands, for example, are in a constant state of repair from multiple extreme weather events and the encroaching ocean poses an existential threat to their territory, biodiversity and culture. A delayed and insufficient provision of financial assistance, for both mitigation and adaptation would be an abdication of responsibility.
One thing is clear, preparatory talks in the lead up to the major annual climate summit have shown that an agreement on a new climate finance goal and its structure will not be straightforward. However, it is paramount that developed and developing countries show their willingness to shape a meaningful goal with an ambitious target, providing timely assistance and acknowledge everyone’s responsibility.
