BAKU: The first iteration of the draft New Collective Quantified Goal on Climate Finance (NCQG) was released on Wednesday, which the majority of G77 countries and China have reportedly agreed to use as the basis for negotiations to achieve an ambitious climate finance goal.
It's a voluminous draft running into 34 pages as against the nine-page pre-COP draft that was rejected by developing countries terming it as imbalance and not representing their stance positively.
While some observers called the new draft also "non-workable" as it simply put all the options in black and white, others see some positives in it.
In para 55, the draft text acknowledges that in line with the principles of equity and common but differentiated responsibilities, the NCQG is the sole obligation of developed countries to provide and mobilise climate finance to developing countries and must accurately reflect the establishment of operational features in line with the needs and priorities of developing countries.
However, the text throws-up six options on the quantum of NCQG with a lot of brackets. For instance, option-1, reads: "It was decided to set a new collective quantified goal on climate finance [of USD X][from a floor of USD 100 billion][of at least USD 1 trillion][of USD 1.1 trillion][of at least USD 1.3 trillion][of USD 2 trillion] per year [in grant-equivalent terms] [from 2025 to 2029][from 2025 to 2030][from 2025 to 2035][from 2026 to 2035][by 2030] provided and mobilised by developed country Parties and to address the evolving needs and priorities of developing country Parties with a significant provision component for adaptation, mitigation and loss and damage."
So, experts say it will take some time for negotiators to work through them and on Thursday there would be another new draft text coming. Arjun Dutt, senior programme lead at the Centre for Energy Finance, CEEW termed it an initial draft, which is voluminous and contains an 'abundance' of options.
"Ultimately, the quantum of the NCQG should be based on the needs and priorities of developing countries. As per the report of the Independent High-level Expert Group (IHLEG) on Climate Finance constituted by the COP26 and COP27 Presidencies, developing countries (excluding China) require roughly $1 trillion per year by 2030 in external finance for climate action. This should be a credible basis from which the quantum of the NCQG may be derived," he told TNIE.
Harjeet Singh, Global Engagement Director for the Fossil Fuel Non-Proliferation Treaty Initiative, said there are some positives and negatives in this draft text, but overall it forms a good basis to further the negotiations. "The draft talks about the polluter pays principle, which refers to the fossil fuel countries. It has a lot of references to loss and damage etc."
In para 156, it acknowledges mobilising new sources of finance, such as carbon pricing, including targeting the fossil fuel sector and other high-emitting sectors in line with the polluter pays principle, to mobilise more private finance via blended finance instruments.
Vaibhav Pratap Singh, Executive Director, Climate and Sustainability Initiative, said: "The language and proposed options in each section and sub-section of the text are likely to be heavily contested by representatives from both developed and developing nations. There is a possibility that discussions may end in a stalemate, pushing the decision to the next iteration, or result in weaker language to close this round."
Ali Mohamed, Chair, African Group of Negotiators (AGN) on climate change emphasised the importance of a loss and damage fund that is going to respond to the evolving needs of developing countries, and countries that are most vulnerable to climate catastrophe. "The urgency of the climate emergency for millions of people in the Global South cannot be overemphasised, and Baku presents us with an opportunity to offer leadership and hope."
Who wants what:
Arab Group - Wants a minimum of $441bn delivered from 2025
US - “Entirely fair” new donors (i.e. China, Saudi) start delivering cash
Pakistan - Grants should make up 70% of the target
Turkey - Multi-layered approach an option but requires detail
G77+China - Target must focus on funds going from developed to developing nations
AOSIS - Overall goal must be above $1 trillion, small islands need specific support
Japan - Target cannot be delivered just by developed countries
UK - Goal could have ‘inner’ layer in billions & ‘outer’ layer in trillions
Africa - $1.3 trillion target required by 2030 with an overall $6.5 trillion goal
EU - New goal can only be hit if all major polluters step up
