As the Bonn talks kicked off on Monday ahead of COP29 in Azerbaijan, United Nations (UN) executive climate secretary Simon Stiell urged negotatiators to “move from zero-draft to real options” for a new global climate finance goal.
“We must make serious progress on finance, the great enabler of climate action,” said Stiell. “We cannot afford to reach Baku with too much work still to do. Please make every hour here count.”
A new and larger target, also known as the new collective quantified goal on climate finance (NCQG), is expected to displace the current US$100 billion pledge by wealthy countries, which is due to expire in 2025.
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New data from the Organisation for Economic Co-operation and Development (OECD) last week showed that rich nations managed to surpass this target in 2022, mostly driven by multilateral public climate finance – albeit two years behind schedule.
OECD secretary-general Mathias Cormann suggested that exceeding this annual commitment “goes some way towards making up for the two year delay” which should help build trust” between richer countries and their poorer, more climate-vulnerable counterparts. But whether that proves to be true remains to be seen.
Experts believe that raising the goal’s dollar amount could serve as leverage to get developing countries to step up their climate ambitions in the next round of national climate plans due in 2025 – which Stiell proclaimed will be “among the most important policy documents produced so far this century”.
Many researchers agree that annual climate funding needs will run into the trillions. Katherine Browne, a research fellow from the environmental research non-profit Stockholm Environment Institute (SEI) estimates that for just mitigation alone, developing countries will need US$2.1 trillion to meet their national climate commitments.
Citing a recent UN report, Browne said that adaptation would require up to US$387 billion a year for less developed nations. Meanwhile, the SEI’s best estimate for loss and damage is between US$290 and US$580 billion a year.
A lot remains up in the air, including the new target’s timeframe, whether loss and damage – on top of mitigation and adaptation – will be covered, and which countries will give and receive this money.
Apart from committing a higher figure, the NCQG will also need to ensure that financing does not take the form of loans that unduly add to the current debt burden of developing countries.
In 2022, OECD estimated that grants comprised just 28 per cent of public climate finance. In contrast, loans accounted for 69 per cent of the total amount, and were not always on more preferential terms compared to options on the market.
As a result, Stiell stressed that the bulk of financing should come from “new grants and highly concessional forms of finance,” adding that they “must be coupled with global financial reforms that deliver debt relief and affordable finance.”
Other items on the agenda that delegates will be busying themselves with include the first high-level dialogue under the COP27-established Just Transition Work Programme, conducting a stocktake of existing National Adaptation Plans (NAPs), and restarting Article 6 negotiations to facilitate the trading of carbon credits to meet national climate targets. The last comes at a time when the voluntary offsets market value has tumbled to a third of its 2021 peak.
The 10-day talks got off to a shaky start, as climate activists stormed the stage while Stiell was speaking and unfurled the Palestinian flag and a banner reading “No business as usual during a genocide” to protest Israel’s war in Gaza.
The demonstrators, from global civil society coalition Climate Action Network, were escorted out of the room by the UN security service shortly after, based on videos posted on social media.
The UN climate body tightened its code of conduct for all COP28 participants last year to ensure a “safe and inclusive environment for all”. This drew the ire of pro-Palestinian activists who were banned from waving flags and had their protests restricted to designated zones.
