A New Global Climate Finance Goal that Responds to Developing Countries’ Needs
Climate finance continues to increase, but the scale is still far from adequate. While estimates vary widely (due to the models and inputs they use), most find that developing countries, after deploying their own resources, will need an additional $500 billion to $1 trillion per year in climate finance from international sources. That's at least 5 times as much as the current $100 billion commitment.
Countries committed under the 2015 Paris Agreement to establish a new collective quantified goal on climate finance (NCQG) in 2024 that would replace the $100 billion annual target, taking into account the needs of developing countries. But what this new pledge will look like remains unclear.
At COP29, it’s essential that negotiators not only significantly increase the total amount of climate finance, but specify the timeframe and terms of its provision; what the finance will support; how it will reach the communities that need it most; and how all climate finance will be measured. Negotiators should also improve the quality of the finance delivered through more strategic use of diverse financial instruments, better access to finance, greater financial predictability, and a focus on results.
However, the NCQG alone will not fill the immense global gap in climate and adaptation finance.
Outside of COP, the new goal should be supported by broader financial reforms — initiated through the G20 and other relevant processes — to help achieve the level and quality of finance needed. Reform and re-capitalization of international financial institutions, such as development banks, can equip them to channel more and higher-quality finance to developing countries’ low-carbon, climate resilient, nature positive and inclusive development plans. It can also help mobilize more private finance toward these ends. The world could increase climate finance by ending and redirecting harmful subsidies (such as fossil fuel subsidies) and creating new 'solidarity levies’ on wealth or high-emissions activities. Finally, developing countries’ own resources could be increased by improving domestic resource mobilization and a more comprehensive approach to debt relief and restructuring.
Momentum for Stronger National Climate Commitments
Countries agreed under the Paris Agreement to submit stronger national climate commitments (known as “nationally determined contributions,” or NDCs) every five years. The next round is due just a few months after COP29. This makes the UN summit in Baku the last major opportunity to set clear expectations for what this next generation of NDCs should aspire to.
At Climate Week in New York in September and at COP29, countries — especially the world’s largest emitters — should announce their intentions to submit bold and ambitious new NDCs. This can encourage other nations to follow suit and spur more action from investors, businesses and cities.
Specifically, countries should ensure their NDCs align with the level of emissions reductions scientists say are necessary for limiting global temperature rise to 1.5 degrees C (2.7 degrees F) and preventing some of the worst effects of climate change. NDCs should also include sector-specific targets, such as concrete goals for shifting to emissions-free energy and food systems. They should put people at the center, ensuring a ‘just transition.’ And they should include stronger adaptation commitments with a focus on the most vulnerable, marginalized groups and communities. These should align with sectoral targets outlined in the Global Goal on Adaptation and with countries’ own longer-term National Adaptation Plans.
Show Progress Towards Existing Commitments on Cities, Energy, Food and Forests
The COP28 outcome saw unprecedented global commitments to transition away from fossil fuels, triple renewable energy, double energy efficiency, build resilient food systems and accelerate low-carbon transportation, among others. At COP29, countries must hold themselves accountable for making progress on those aims.
Meanwhile, in recent years hundreds of countries have joined voluntary climate action efforts such as the Global Methane Pledge; the UAE Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action; the Glasgow Declaration on Forests and Land Use; and the cities-focused Coalition for High Ambition Multi-Level Partnerships (CHAMP). These initiatives are backed by impressive pledges, but they’re only worthy of celebration if there’s demonstrable action.
COP29 is the moment for countries to stand by their pledges by announcing concrete steps to achieve them, as well as provide data and information about their progress so far.
A Clear Process for Funding and Responding to Loss and Damage
After years of intense talks, the COP28 summit in Dubai yielded an agreement to fully operationalize the Loss and Damage Fund. This fund is designed to help vulnerable countries deal with the impacts of climate change that go beyond what people can adapt to — such as the disappearance of coastal heritage sites due to rising sea levels, or the loss of lives and homes during extreme floods. The World Bank will host the fund, while a board will shape its policies and governance.
Leaders must come to COP29 prepared to scale up financial pledges to the “Fund for responding to Loss and Damage.” Countries should also provide finance to the Santiago Network, which aims to provide developing countries with technical assistance in addressing loss and damage.