The required target amount will surprise some
November 4, 2024
The world is on the cusp of a new agreement aimed at massively scaling up financing for developing countries’ efforts to tackle climate change.
Deliberations on a new collective quantified goal (NCQG) for climate finance are expected to conclude at the United Nations climate change conference COP29 set for mid-November in Baku, Azerbaijan.
The new goal seeks to raise climate finance provisions from developed to developing countries well above the current target of $100 billion per year.
But it takes more than numbers to address the evolving needs and priorities of developing nations, UN Trade and Development (UNCTAD) cautions in a new report released just ahead of the high-stakes climate summit.
Equally crucial is improving the quality of financing, making it more transparent and accessible, while upholding the principle of common but differentiated responsibilities and respective capabilities.
“Ultimately, the goal of the NCQG must be to transform the climate finance landscape and herald a new era of mutual trust, cooperation and climate action,” the report urges.
But first, how much do developing countries need for climate action?
Quantifying the goal requires first and foremost, an evidenced-based estimate of the scope of investment necessary to achieve the three main components of climate action – mitigation, adaptation and managing loss and damage – across the developing world.
Based on modelled projections using the United Nations Global Policy Model, developing countries would need about $1.1 trillion in climate finance from 2025 and some $1.8 trillion by 2030.
In a best-case scenario – with global economic governance reforms and multilateral coordination efforts in place – developed countries would fund at least three quarters of the climate investments needed by their developing counterparts.
Accordingly, the new climate financing contribution target for developed economies would be $0.89 trillion from 2025 and $1.46 trillion by 2030.
This would correspond to around 1.4% of developed countries’ GDP from 2025 and a drastic increase from the current annual commitment of $100 billion.
Despite the significant scale-up in ambition, the proposed climate finance target could still be feasible, when compared to other significant expenditures undertaken by advanced economies historically and recently…
Source: UNCTAD News
For a more detailed discussion see The New Collective Quantified Goal on climate finance | UNCTAD