TAG: GS-3: ECOLOGY AND ENVIRONMENT
THE CONTEXT: The 29th edition of the Conference of the Parties (COP) began in Azerbaijan on November 11, 2024. At this conference, the new collectively quantified target (NCQG) has emerged as a critical commitment in global climate finance.
EXPLANATION:
What is New Collective Quantified Goal (NCQG)?
- The New Collective Quantified Goal is a forthcoming international climate finance target.
- The commitment of $100 billion per year till 2020 to developing nations by developed countries was set at the 2009 COP.
- The cost estimates for addressing climate change indicate that billions, and possibly trillions, of dollars are required.
- The 2015 Paris Climate Agreement emphasized the need for a NCQG for climate financing before 2025.
- The NCGQ aims to account for the needs and priorities of developing nations and has been termed the “most important climate goal.”
- It should reflect scientific evidence, respond to increased funding requirements for Loss and Damage, and involve developed countries increasing their commitments.
Key aspects:
- Monitoring and Accountability: Establishing robust systems for tracking the flow and impact of the climate finance to ensure transparency and effectiveness.
- Increased Financial Commitment: The NCQG is expected to surpass the existing $100 billion annual target, recognizing that the financial needs for climate mitigation, adaptation, and resilience have grown significantly.
- Expanded Scope: The goal will address not only the quantum of financial resources but also associated issues such as sources of funding, types of projects to be funded, and effective mechanisms for financial disbursement and utilization.
- Inclusivity and Fairness: The NCQG discussions involve ensuring that the contributions are equitable, with clear criteria on who should contribute based on capabilities and responsibilities.
Why NCQG is needed:
- Developed countries provided $83.3 billion in 2020 out of the promised $100 billion per year.
- However, an analysis by Oxfam suggests that these figures may be inflated by as much as 225% due to misleading and dishonest reporting.
- The $100 billion target set in 2009 lacked clarity in terms of the definition and source of ‘climate finance.’
Challenges and Concerns:
Accessibility and Sustainability of Climate Finance
- While the funds for climate finance have increased, they remain largely inaccessible to developing countries.
- The majority of climate finance comes in the form of loans and equity, burdening developing nations with a debilitating debt crisis.
- Only around 5% of climate finance is provided as grants, which severely limits the capacity of countries in need.
Developed Countries’ Perspective
- Developed countries argue that the NCQG should be seen as a collective goal for all countries.
- This perspective places the burden of mitigation, adaptation, and loss and damage on developing countries.
- Experts raise concerns that developing nations may struggle to bear the costs while also ensuring sustainable infrastructure development.
- Developed countries advocate for mobilizing private-sector investments and loans as a critical component of climate finance.
Future roadmap:
- A deadline looms for countries to agree on the NCQG before 2024.
- While there is no official figure yet, estimates suggest that transitioning to a low-carbon economy requires annual investments of $4 trillion to $6 trillion.
- Some propose setting separate targets or sub-goals for focus areas like mitigation, adaptation, and loss and damage instead of a single aggregate figure.
- The focus should be on scaling up concessional financing, halting debt creation, and transforming the NCQG into an equitable and people-led transition process.
SOURCE:
https://indianexpress.com/article/explained/explained-climate/cop29-climate-jargon-9664501/
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