Intense Discussions Emerge Over Climate Finance Goal Draft During COP29 in Baku

On the third day of COP29, discussions heated up over the draft of the New Collective Quantified Goal (NCQG) on climate finance. This new goal is set to replace the current USD 100 billion annual commitment, which expires in 2025. The G77 and China, representing about 130 countries at the UN climate talks, rejected the framework for a draft negotiating text on a new climate finance goal. This issue is central to this year's climate summit in Baku, Azerbaijan.

The draft NCQG text has highlighted tensions as countries navigate funding sources, distribution mechanisms, and financial targets. The High Ambition Coalition (HAC), including some G7 countries absent from COP29 like Canada, France, and the Netherlands, stressed that developed countries must lead and meet their financial obligations. Brazil announced a targeted emission reduction of 59-67% by 2035, along with a commitment to adaptation strategies.

Challenges in Drafting Climate Finance Goals

Arunabha Ghosh, CEO of the Council on Energy, Environment, and Water (CEEW), noted challenges posed by the draft's numerous options. He called for a finance goal that aligns with developing nations' needs. "The NCQG should be at least USD 1 trillion per year, comprised largely of grants and concessional finance," he stated. Ghosh emphasised that climate finance must be concessional, catalytic, and credible to drive real impact.

Professor Purnamita Dasgupta from the Institute of Economic Growth stressed the need for a comprehensive framework addressing transparency, equity, and dedicated allocations for mitigation, adaptation, and loss and damage. She noted that the NCQG must be a "strategic, urgent, and real-time deliverable," addressing public finance and arrears alongside future flows to avoid previous pledges' shortfalls.

Rejection and Revision of Draft Text

Alejandra Lopez, Climate Diplomacy Director at Transforma, explained why the G77 rejected the initial draft. "It was really long, lots of repetitions, lots of duplications, and basically options weren't clear. It wasn't a workable text to negotiate," she said. Following this rejection, co-chairs were tasked with drafting a new version to be presented the next day.

Joe Thwaites from NRDC described the iterative process the text has undergone. "The text started at 65 pages, was reduced to 35, then down to 10 pages. But...there are a lot of parties that weren't happy with that," he explained. Negotiations are often complicated by countries wanting their ideas visibly included in the draft.

Ensuring Equitable Financial Support

Sandra Guzman from the Climate Finance Group for Latin America and the Caribbean emphasised that countries need their perspectives reflected before streamlining discussions. She pointed out challenges: "Proposals from certain groups were in brackets and others were not, creating discomfort and a sense of imbalance." Stakeholders underscored the need for a robust NCQG ensuring equitable financial support for developing countries.

David Ryfisch from German Watch noted time is running out. Some elements of the draft like transparency arrangements could serve as convergence points. However, he acknowledged political complexity as each step must be carefully sequenced to reach agreements on financing targets.

For Guzman, achieving qualitative elements like targeted finance for adaptation is crucial. She shared her hope for convergence soon: "It is possible...but the point is how we are going to get there and the willingness actually from the countries." Ryfisch highlighted developed countries' focus on directing finance towards developing nations despite no concrete numbers yet.