NEW COLLECTIVE QUANTIFIED GOAL

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Context

• The Bonn Climate conference was recently finalized in Germany to set the agenda of COP 28 Dubai.
• It was a critical meeting for reforming the climate finance architecture.

Other Details

• In the meeting earlier commitment and targets to fund developing countries, by developed countries, were discussed and reviewed.
• It exposed a wide gap in the commitment made and delivered.

New Collective Quantified Goal

Background

• At conference of Parties (COP) in 2009, commitment of $100 billion per year for developing nations was made by developed countries to fight climate change implications.
• However it is not sufficient and may need trillions of dollars to tackle the effects of climate change.
• Hence in order to consider needs and priorities of developing nations, New Collective Quantified Goal (NCGQ) for climate financing were set in 2015 Paris Climate Agreement.

Need for a new finance goal

• In 2020 Organisation for Economic cooperation and Development reported that only $83.3 billion was disbursed to developing countries out of promised $100 billion per year.
• Also the funds disbursed may be less in actual because it is also notes that the reporting of funds may be shady, dishonest and overinflated (to the tune of 225%) according to an Oxfam analysis.
• There is no clarity on definition of climate finance.
• Also there is no provision or effort to understand the nature or source of such climate financing.
• According to a study by Centre for Science and Environment For instance -
  • 5% of climate finance comes from grants.
  • Rest 95% through loans and equity.
  • It may lead to debt crisis in developing countries and can burden them with high interest rates.
• The funds remain inaccessible, privately sources and mostly delayed.

Significance

• They are also considered the most important climate goal in fight against climate change.
• It increases the upper limit of commitment by developed countries.
• It takes evolving needs and priorities of developing countries into consideration by evaluating them on scientific evidence.
• More funding to fight climate change would be ensured also the requirement for Loss and Damage will be catered.

Position of developed countries

• NCQG must be viewed as collective goals not just for them but for developing countries too.
• This way they are pushing net zero pathways onto developing countries.
• They also advocates that private-sector investments and loans are critical in climate finance

Related concerns

• As per last year's Sharm el-Sheikh Implementation Plan, at least $4 trillion to $6 trillion may be required for climate financing and to push for low carbon economy transition.
• Deadlines for countries, to have consensus on achieving NCQG, are tight.
• No sufficient funds for developing countries to clean energy transition and fight against climate change induced vulnerability.

Way Ahead

• Instead of a single figure there should be separate targets for different areas for instance -
  • Mitigation fund
  • Adaptation fund
  • Loss and damage fund
• More responsibility to be shared by developed nation by recognizing and accepting their historic burden on climate.
• There should be more concessional financing.
• Source and Nature of financing should not be debt creating
• NCQG should be considered as a process to make it equitable.
• Make the transition people led.

Must read Article:

https://www.iasgyan.in/daily-current-affairs/climate-finance

https://www.iasgyan.in/daily-current-affairs/bonn-meeting-on-climate-action

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