On the 30th of November, the first day of the COP28 closed to the major announcement that the Fund for Loss and Damage had been agreed. Pledges swiftly followed and its first capitalisation so far amounts to over $500 million committed for the next four years. The COP28 Presidency has stated it may well reach $700 million by the end of the conference.
What’s happening with the new climate finance goal?
Just before COP28 kicked off, experts were invited to reflect on the work undertaken towards the NCQG to date. Among other contributions, participants have put together, the options cover: the options cover:
The timeframe of the goal
Its structure (should it be an absolute figure in terms of volume of money, or a share of GDP? Or have underlying principles etc);
Its target figure (should a balance between mitigation, adaptation and Loss and Damage finance be specified?);
Its sources (public, private and the goal’s articulation with the long term goal of aligning all financial flows);
The collective responsibility for the goal has undermined attempts to hold individual countries accountable. Consequently, only eight countries paid their fair share in 2021, as per ODI’s calculations. A burden sharing mechanism would enhance accountability, which may be why African nations hoped to see it endorsed in the Global Stocktake (GST).
Another topic that received much attention in the design of the loss and damage fund, and will be equally under the spotlight for the new climate finance goal, is the question of which additional countries should provide climate finance. It is important to clarify that any burden sharing mechanism is only applied to countries that define themselves as developed for the purposes of the climate regime. Voluntary contributions by developing countries would be very welcome, and not subject to such a formula.
What’s next in the NCQG deliberations?
The technical discussions on the elements should continue with more ‘expert dialogues’ in 2024. What is needed now are directions from the political level to guide those dialogues, identifying areas of consensus and opportunities for compromise.
Such political guidance could come from the High-Level Ministerial Dialogue on the NCQG. In the past, such dialogues have been kept fairly broad with repeat statements of commitments by developed countries and repeat calls from developing countries to keep the $100bn promise. The conversations may be more constructive now that the goal was likely reached in 2022.
Possibly, guidance could also come from the outcomes document of the GST. The GST is the five-yearly assessment mechanism mandated by the Paris Agreement on its three long term goals – the 1.5°C temperature goal, the global goal on adaptation and the means of implementation which covers finance, technology and capacity building.
Ultimately, the new climate finance goal is unlikely to include a burden sharing mechanism: the US will veto it. In the absence of a rigorous evaluation system within the UNFCCC process, it is important that civil society continue to hold individual developed countries to account.