“The unresolved issues regarding funding reliability, governance and integration with broader climate strategies highlight the need for further negotiation and innovation. Ensuring that the fund meets its transformative potential will require sustained political will, transparency and a clear commitment to addressing the systemic injustices of the climate crisis. These funds should not come with strings attached or in the form of debts. Owing to continuous climate extremes, developing countries, already vulnerable, are not in a position to navigate through such arrangements.”
My reflections on COP29 and finance
https://lnkd.in/ejNuRhPH
🌍 At COP29 in Azerbaijan, the EU is championing global action to meet the Paris Agreement goals and limit temperature rise to 1.5°C.
With €28.6 billion in public climate finance provided in 2023, the EU is driving efforts to align global financial flows with climate goals.
This year’s focus? The adoption of a New Collective Quantified Goal (NCQG) on Climate Finance to unlock investments and accelerate climate action.
Discover how the EU is leading the way in climate finance at COP29! 👇
#COP29#ClimateAction#ParisAgreement#Sustainability#ClimateFinance#GlobalLeadership#EUClimateLeadershipEuropean CommissionEuropean UnionUnion for the Mediterranean
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After CoP 29 in Baku, the need for considerably greater volumes of public climate finance ( which will attract commensurate quantities of private finance) is a problem that has not yet been properly addressed by the international community.
We are told that the trillions of climate finance urgently needed to support climate mitigation and adaptation activities around the world cannot be made available for these purposes. The rules of the dominant economic global model appear to “trump”the serious, current, existential requirement for vast quantities of ( largely) public funding to allow humanity to have some hope of avoiding the spectre of catastrophic global climate change and the possible extinction of the human race.
So what stops the international community from acting collectively to generate a massive, multi- year programme of climate finance that could be distributed equitably amongst all countries of the world to support urgent climate action on their part?
Oh yes- I forgot! The current rules of the global economy do not allow for such large volumes of finance to be agreed by the international political community, even though - if the idea had the backing of the governments of all countries around the world - the finance generated could be considered quite stable and risk- free as long as all countries using it were willing to abide by clear and agreed rules.
The additional finance generated would need to be “ debt- free” rather than adding to the mountains of pre- existing debt carried by both developing and developed countries at present. The additional, debt- free climate finance could be put into circulation and drawn down by all countries on an agreed, timed, basis so that the risk of inflation arising could be mimimised.
This additional, debt- free international climate finance would be best issued in the form of a new international reserve currency linked to global decarbonization efforts. While this would certainly have a potentially negative impact on the American dollar ( the current international reserve currency) , such action would represent a prudent move by the rest of the international political community, given how unpredictable and “ America First” in its political and economic/ monetary orientation the new Trump Administration is likely to be.
A new international reserve currency linked to global decarbonization efforts is likely to promote much greater international political stability than the American dollar will do in the hands of Donald Trump, Elon Musk and others in the incoming US Administration.
So what are we waiting for? Will the international political community consider the many political, economic and climate benefits of generating large volumes of debt- free climate finance at the international level and act accordingly, or will it continue to procrastinate and to avoid taking such action for fear of being in breach of the existing rules of the global economy.??
Earlier this week I published this op-ed at Al Jazeera on the politics of climate finance that we are witnessing at #COP29. We are under the risk of shifting the narrative from meeting the needs of developing countries - where developed countries have the responsibility to deliver - to a profits base approach. This would bring "The Wall Street Climate Consensus" into the politics of the UN. Only governments are accountable to the UN climate talks, private sector is not. Any big number agreed for the new climate finance goal #NCQG will be completely meaningless without public grants at scale. More here:
The upcoming COP29 presents a crucial moment for climate action globally. As we stand on the brink of this pivotal event, the focus must be on delivering tangible outcomes in terms of climate finance and establishing ambitious New Collective Quantified Goals (NCQG) that can truly make a difference for vulnerable communities worldwide.
It is imperative to recognize the disproportionate impact that climate change has on regions like Africa, despite their minimal contribution to global emissions. For these vulnerable areas, it is essential that climate finance comes in the form of grants rather than loans. Loans only serve to exacerbate economic burdens and perpetuate cycles of debt, diverting resources away from vital development efforts. Grant-based financing, on the other hand, acknowledges historical responsibilities and allows nations to address climate challenges without hindering their economic progress.
The financial frameworks established at COP29 must be founded on principles of equity and justice, ensuring that grants are easily accessible to those most in need. The NCQG should accurately reflect the severity of the climate crisis, prioritizing adaptation and mitigation efforts in the Global South. Establishing clear accountability measures and timelines is crucial to guarantee that these funds bring about tangible and sustainable changes.
COP29 represents an opportunity to translate aspirations into concrete commitments. By securing fair and inclusive climate financing and defining ambitious NCQG, we can pave the way for a future where climate justice empowers every nation to enhance resilience and embrace the future with optimism. 🌱 See you in Baku
Delegates at UN climate negotiations are set to agree on a new international climate finance goal, succeeding the $100bn, by COP29 in 2024. This target will include details on the sources of finance and likely reshape the climate finance landscape for the next decade.
COP28 could build the groundwork for a consensus on the so-called “new collective quantified goal” (NCQG), including an acknowledgement of existing contributions from developing countries.
The NCQG could do this while providing reassurance that the obligations of developed countries in leading the global climate-finance effort will continue, emphasising that voluntary contributions by developing countries will not be conflated with the politics of country categorisation.
New Climate Fund to be launched at COP29. As the world grapples with the pressing challenges of climate change, the upcoming COP29 summit is set to unveil a significant initiative: the New Collective Quantified Goal on Climate Finance (NCQG). Initially proposed in Paris in 2015, the fund aims to reshape climate action by providing essential financial support to developing nations, often on the frontlines of climate risk.
The NCQG seeks to replace the existing commitment of developed nations to contribute $100 billion annually, aiming for a much larger financial target to empower these nations in their climate efforts. With calls for trillions of dollars to meet the needs of developing countries by 2030, this initiative is not just about funding; it represents a transformative step in global climate diplomacy.
As developing nations gain access to increased resources, the potential for robust participation in carbon markets expands, offering new opportunities for both sustainability and innovation. The emphasis on inclusive climate diplomacy highlights all nations' critical role in achieving global net-zero targets.
This initiative could redefine the landscape of climate finance, fostering collaboration and ensuring that developing nations are integral to the worldwide transition to sustainable practices. This is a pivotal moment worth exploring for those interested in the future of climate action and its implications for the carbon market.
This development could be crucial for the future of climate finance, and all those involved should pay close attention to it.
CarbonAl offers you the chance to do just this. With advanced insights into carbon pricing and industry developments, it equips organisations with the tools to navigate this evolving landscape.
Find out more and read any of our 100 other articles here:
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🆓 FREE TO READ 🆓 COP29 : In the early hours of Sunday morning countries agreed a New Collective Quantified Goal on Climate Finance to triple public finance to developing countries, from the previous goal of $100bn to $300bn a year by 2035.
Its size and the emphasis on private finance to find further funding have been roundly criticised.
The climate summit was “not a success, but at best the avoidance of a diplomatic disaster”, said Ottmar Edenhofer, climate economist and co-director of the PIK - Potsdam Institute for Climate Impact Research.
Read more analysis below.
#COP29#climatefinance#climatefinancegoalhttps://lnkd.in/ebPBjy8w
CLIMATE FINANCE: Without the funding there won’t be any climate action. This is why we develop bankable projects to help bridge the gap in financing nature-based climate projects.
The NCQG isn't just about numbers; it's about meeting the real needs of developing nations to tackle climate change. But the ultimate question is, what could the new climate finance goal look like?
Imperatively, the new climate finance goal should channel greater funds toward urgently needed climate action in developing countries. It will have to support implementation of low-carbon, climate resilient solutions in energy, transport, agriculture and other vital systems. By increasing financial support, it should enable developing countries to step up their climate ambitions in the next round of national climate plans/Nationally Determined Contributions (NDCs), which are due in 2025.
Ultimately, to ensure that developing nations can deal with loss and damage and fulfill more ambitious climate commitments, greater funding for climate and development is ultimately necessary. Rebuilding and bolstering confidence in the global climate financing system will start with the adoption of a robust NCQG at COP29. Additionally, at a pivotal juncture for climate action, it will foster solidarity between wealthy and developing nations.
Therefore, the final NCQG needs to have an ambitious and deliverable financial commitment. It should include clear rules defining who will contribute, for what purpose, over what timeframe and how progress will be monitored.
#AdaptationInFocus#ClimateFinance
Associate Coordiator at Ahmed Salim Resource Centre-SDPI
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