Central Idea

The New Collective Quantified Goal (NCQG) has emerged as a significant commitment in global climate financing at the recently-concluded Bonn climate conference in Germany.
The conference, which sets the stage for the upcoming Conference of Parties-28 (COP28) in Dubai, has exposed significant gaps in funding for climate action.

Conference of Parties (COP)

The Conference of Parties (COP) is a key international event where countries come together to address the urgent challenges posed by climate change.
It is the supreme decision-making body of the United Nations Framework Convention on Climate Change (UNFCCC).
The COP brings together representatives from various countries to assess progress, negotiate agreements, and establish international climate policies and commitments.
The first COP took place in 1995 in Berlin, Germany, following the adoption of the UNFCCC in 1992.
Since then, the COP has been held annually, with each event designated by a specific number (e.g., COP21, COP22) indicating the sequential order.

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.

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.’

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 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.

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.