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Climate finance at market rates not ideal, says India
New Delhi: India, speaking on behalf of developing countries has said access to climate finance at market rates will lead to further financial stress on developing countries
New Delhi: India, speaking on behalf of developing countries has said access to climate finance at market rates will lead to further financial stress on developing countries. “Going ahead, if ambitious climate targets have to be achieved, these need to be backed by intentions reflected by ambitious, appropriate, and reasonable access to financial resources by developing countries,” India has submitted on behalf of the Like Minded Developing Countries at a high level ministerial dialogue on a new collective quantified goal (NCQG) from a floor of $ 100 billion per year on Wednesday.
The Standing Committee on Finance under United Nations Framework Convention on Climate Change has estimated that resources in the range of $ 6 trillion to $11 trillion are required till 2030 to meet the targets set by developing countries in their Nationally Determined Contributions (NDCs), the statement said.
“Climate actions to meet the NDC targets require financial, technological, and capacity-building support from developed countries. The ambitious goal set down by the developing countries requires substantive enhancement in climate finance from the floor of $100 billion per year. The mobilisation needs to be led by the developed countries and should be long-term, concessional, and climate-specific with equitable allocation between adaptation and mitigation projects. The commitment of $ 100 billion made in 2009 by developed countries, was not only miniscule given the scale of needs, but has also not been achieved yet. The needs already determined can guide the mobilisation and provisioning of resources by developed countries to developing countries. It is imperative that Technical Expert Dialogues concentrate on the quantum and quality of resource mobilization,” it added.
LMDC has made it clear that the extent of resources that the developed countries bring to the table will play a critical role in determining climate flows. Focus on private finance alone is discouraging they said.
“While the previous Technical Expert Dialogues on the New Collective Quantified Goal under the Ad Hoc Work Programme have presented an opportunity for the exchange of ideas, a more structured and targeted approach needs to be adopted to enable the successful fulfilment of the mandate ahead of 2024. Discussions within the Technical Expert Dialogues in 2023 should focus mainly on the quantum, recognizing the urgency of such discussions for developing countries. That said a discussion on quality and other elements such as access and transparency is incredibly important,”a statement from LMDC said, adding that a structure must be set in place moving forward to ensure decisions on all these elements can be taken by 2024.
“It is also important to highlight in this context that access to finance at the market rate for climate action will lead to considerable stress on the finances of developing countries that the world cannot afford. Going ahead, if ambitious climate targets have to be achieved, these need to be backed by intentions reflected by ambitious, appropriate, and reasonable access to financial resources by developing countries,” the statement added.
“Finance for climate action by developing countries is a critical key in meeting global climate objectives. With the goals set out in Copenhagen (2009) not having been met, it is imperative that new and, this time firm, climate financing goals are set and committed to by the developed countries,” said Manjeev Singh Puri, former climate negotiator and ambassador responding to the LMDC statement. The issue of loans as climate finance burdening developing countries has already been raised at COP27.
“The Global North borrows at interest rates of between one to 4%, the global south of 14%. And then we wonder why the Just Energy partnerships are not working,” said Prime Minister Of Barbados, Mia Amor Mottley during Sharm El-Sheikh Climate Implementation Summit Opening Ceremony.
