What is the New Collective Quantified Goal?

General Studies Paper 3

Introduction

• The recently-concluded Bonn climate conference in Germany, expected to outline the political agenda for the crucial end-of-year Conference of Parties-28 (COP28) in Dubai, was critical for reviewing and reforming the climate finance architecture. The conference has exposed a gaping hole in the funding needed to pay for climate action.  This comes from a long-standing impasse between developed and developing countries, over where money for climate change policies should come from and in what form.

Defining New Collective Quantified Goal (NCQG)

• A commitment of ‘$100 billion per year till 2020’ to developing nations from developed countries was a target set at the Conference of Parties (COP) in 2009.
• But estimates since then show addressing climate change may cost billions, and even, trillions of dollars. Therefore, the 2015 Paris Climate Agreement agreed on setting a New Collective Quantified Goal (NCGQ) for climate financing prior to 2025
• The NCGQ is thus, termed the “most important climate goal”. It pulls up the ceiling on commitment from developed countries, is supposed to anchor the evolving needs and priorities of developing countries based on scientific evidence.

Need of a new finance goal

• Out of the promised $100 billion per year, developed countries provided $83.3 billion in 2020, as per a report by the Organisation for Economic Co-operation and Development.
• These figures may be misleading and inflated by as much as 225%.
• Moreover, the $100 billion target set in 2009 was seen more as a political goal, since there was no effort to clarify the definition or source of ‘climate finance’.
• The economic growth of developed countries has come at the cost of high carbon emissions, and thus they are obligated to shoulder greater responsibility.
• While funds available for climate finance have quantitatively increased, they are inaccessible, privately sourced, delayed and not reaching countries in need.
• Countries most in need of finances have to wait years to access money and pay interest high rates, thus increasing their debt burden.

Developed countries stand-

• Wealthy nations want to expand the donor base with NCQG. This would facilitate global contributions.
• The European Union is calling for global efforts instead of contributions merely coming from developed countries.
• The Environmental Integrity Group (EIG),a negotiation group comprising six nations including Switzerland, said other elements framed as “technical” by developing countries are highly political.

Developing countries stand-

• Negotiators from Antigua and Barbuda said that technical negotiators don’t have the mandate to “expand donor base”.
• Alliance of Small Island States, an intergovernmental organisation of low-lying coastal and small island countries, said broadening the donor base is a political topic.
• South Africa, on behalf of the African Group of Negotiators also opposed the expansion of the donor base.

Conclusion

• Countries are on a tight deadline to agree upon the NCQG ahead of 2024.
• There’s no official number yet, but a global transition to a low-carbon economy requires investments of at least $4 trillion to $6 trillion a year, as per last year’s Sharm el-Sheikh Implementation Plan.
• Some argue that instead of identifying a single aggregate figure, the NCQG could also set separate targets (or sub-goals) for focus areas such as mitigation, adaptation and loss and damage.
• The aim is to focus on scaling up concessional financing, stopping debt creation and allowing NCQG to be more of a “process” rather than a goal towards equitable and people-led transition.