GS Paper III
News Excerpt:
A crucial climate meeting in Bonn, Germany, concluded without significant progress on establishing a new climate finance goal.
More about the news:
- By the end of 2024, nations need to agree on a new financial target, exceeding the current $100 billion per year, to be mobilized by developed countries for developing nations to combat climate change.
- This annual June meeting was anticipated to provide indicative figures for finalization at COP29 in Baku, Azerbaijan, in November 2024.
Importance of Financial Support in Climate Action
- Financial resources are essential for climate action, enabling mitigation and adaptation efforts and supporting the collection and reporting of climate data required by the 2015 Paris Agreement.
- Developing and poor countries, lacking the necessary capacity, need significant financial assistance to meet these obligations.
- According to the UN Framework Convention on Climate Change (UNFCCC), rich and developed countries are responsible for providing this support due to their primary role in causing climate change.
- The $100 Billion Commitment:
- In 2009, developed countries pledged to mobilize $100 billion annually by 2020 to assist developing countries in addressing climate change.
- The Organisation for Economic Cooperation and Development (OECD) recently claimed this target was met for the first time in 2022.
- However, developing countries dispute this, citing double-counting and creative accounting, and have criticized the developed world for failing to fully honor its financial commitments.
The New Collective Quantified Goal (NCQG):
- The 2015 Paris Agreement mandates periodic increases in climate finance targets post-2025 to address the growing need for financial resources. This new target, the NCQG, must be finalized this year.
- Estimates suggest that developing countries now need trillions of dollars annually.
- A UNFCCC assessment last year indicated that these countries require around $6 trillion by 2030 to implement their climate actions, with annual adaptation needs between $215 billion and $387 billion.
- The global transition to clean energy demands annual investments of $4.3 trillion until 2030 and $5 trillion thereafter to achieve net-zero emissions by 2050.
Proposals and Demands:
- India has proposed that developed countries commit to providing at least $1 trillion annually after 2025.
- Arab countries have suggested a minimum of $1.1 trillion, while African countries demand $1.3 trillion.
- Developed countries have not publicly offered any specific figures but acknowledge that the new target must exceed the current $100 billion per year.
Debate Over Contributions:
- According to the UNFCCC and Paris Agreement, only the countries listed in Annexure 2 of the UNFCCC—25 countries plus the European Economic Community—are obligated to provide climate finance to developing countries.
- These listed countries argue that many other nations are now economically capable of contributing and that the financial requirements are too large for the original group to meet alone.
- Countries like China, the world's second-largest economy, oil-rich Gulf nations, and South Korea, which are not part of Annexure 2, face pressure to contribute.
- However, China has stated it has "no intention" of taking additional responsibility, despite participating in the global fight against climate change.
Way Forward:
- NCQG remains a critical agenda item for climate discussions at COP29 to be held in Azerbaijan.
- The $100 billion figure from COP15 in Copenhagen was not a negotiated outcome but an offer made by then-US Secretary of State Hillary Clinton, later accepted by other Annexure 2 countries.
- As the climate crisis intensifies, the need for substantial financial commitments from developed nations to support global climate action becomes increasingly urgent.
