New NCQG text pitches $250bn by 2035; developing nations likely to reject it

The draft Presidency text also invites developing country parties to make additional contributions

The new COP29 Presidency’s text on New Collective Quantified Goal (NCQG) on climate finance has decided to set a goal of USD 250 billion per year by 2035 for developing country Parties for climate action, from a wide variety of sources.

The sources for the goal would include public and private, bilateral and multilateral, including alternative sources. (AP photo)

The sources for the goal would include public and private, bilateral and multilateral, including alternative sources. It recognises the voluntary intention of Parties to count all outflows from and finance mobilized by multilateral development banks towards achievement of the goal set.

The draft Presidency text also invites developing country Parties to make additional contributions, including through “South–South cooperation”, to or supplementing, the goal set forth and that it doesn’t affect any Party’s development or recipient status.

"It has been a significant lift over the past decade to meet the prior, smaller goal. $250 billion will require even more ambition and extraordinary reach. This goal will need to be supported by ambitious bilateral action, MDB contributions, and efforts to better mobilize private finance, among other critical factors," a senior US official present at the conference said.

Overall, the text calls on all actors to work together to enable the scaling up of financing to developing country Parties for climate action from all public and private sources to at least USD 1.3 trillion per year by 2035.

Observers said this goal may not be acceptable to developing country parties. Developing countries had sought the goal for mobilisation to be USD 1.3 trillion with 600 billion USD of this coming through grants and grants equivalent resources.

India on Thursday said had said that NCQG is the financial support from developed to developing countries on grant and concessional terms for meeting our ambitious NDCs.

“Finance is the most critical enabler for the new NDCs we are required to formulate and implement. Action will be severely impacted in the absence of adequate means of implementation”, India said.

The document therefore needs to be specific on the structure, quantum, quality, timeframe, access, transparency, and review. The goal for mobilisation needs to be USD 1.3 trillion with 600 billion USD of this coming through grants and grants equivalent resources.

Expansion of the contributor base, reflection of conditional elements such as macroeconomic and fiscal measures, suggestion for carbon pricing, focus on private sector actors for scaling up resource flows as investments – is contrary to the mandate for the goal.”

On Wednesday, the G77 +China, African Group of Negotiators and LMDC were also clear that any contribution by developing countries should be voluntary. They had scoffed at the quantum numbers being discussed.

When asked how would they respond to a quantum of $200 billion, spokespeople of all three groups laughed and asked: “Is it a joke?”

“Even the Adaptation Gap reports say the gap in financing adaptation is $400 billion. So, this quantum cannot even respond to that,” Ali Mohamed, AGN Chair, had said.

Harjeet Singh, Climate Activist and Global Engagement Director for the Fossil Fuel Non-Proliferation Treaty Initiative, feels that the amount is less calling out the countries to stand firm.

“It is a disgrace that despite full awareness of the devastating climate crises afflicting developing nations and the staggering costs of climate action—amounting to trillions—developed nations have only proposed a meagre $250 billion per year. To add insult to injury, this paltry sum includes loans and lacks the crucial commitment to grant-based finance, which is essential for developing nations to both address climate impacts and transition away from fossil fuels.

“The trust has been shattered; developing countries must stand firm. Rejecting this is a stand for dignity—no deal is better than a bad deal, especially when it disrespects those bearing the brunt of a crisis they did not create”, Singh said.

“The USD 1.3-trillion per year by 2035 for the developing world includes finance from all public and private sources. Investment in RE technologies in the developing countries was USD 544 billion in 2022 itself. This figure should automatically reach beyond USD 1.5 trillion by 2035 accounting for the growth in the sector and inflation. The USD 1.3 trillion number is at best a sham. Even the apparent increase in the provision from developed world to developing world of USD 250 billion annually by 2035 is the same as the USD 100 billion by 2020 if 6% annual average inflation is accounted for. There is no grant or low cost finance component. This is a bad deal for the developing world, irrespective of how it is going to be portrayed by the presidency,” said Vaibhav Chaturvedi, senior fellow at Council on Energy, Environment and Water (CEEW).

“Taking into account the views expressed during the consultations, and what we heard from Parties at yesterday’s Qurultay, we have now published updated texts. These texts form a balanced and streamlined package for COP29. The COP29 Presidency urges Parties to study this text intently, to pave the way towards consensus on the few options remaining. As a first reflection of Parties indications the New Collective Quantified Goal decision contains a call on all Parties to work together to scale up financing to developing countries for climate action from all public and private sources to at least USD 1.3 trillion per year by 2035,” a statement from the COP29 Presidency said.

“Further, reflecting the submission of developed country parties, it includes a decision to set a goal in extension of the goal of jointly mobilizing USD 100 billion per year, with developed country Parties taking the lead, to USD 250 billion by 2035 for developing country Parties for climate action. We will further engage with Parties to collectively agree final adjustments to the few outstanding yet important issues. We will continue to work hard, inclusively and transparently, to press all sides for the highest ambition outcome possible,” the statement added.

"The $1.3 trillion per year by 2035 for the developing world includes finance from all public and private sources. Investment in RE technologies in the developing countries was 544 billion USD in 2022 itself. This figure should automatically reach beyond 1.5 trillion USD by 2035 accounting for the growth in the sector and inflation. The 1.3 trillion USD number is at best a sham. Even the apparent increase in the provision from developed world to developing world of USD 250 Bn USD annually by 2035 is the same as the 100 Bn USD by 2020 if 6% annual average inflation is accounted for. There is no grant or low cost finance component. This is a bad deal for the developing world, irrespective of how it is going to be portrayed by the presidency," said Vaibhav Chaturvedi | Senior Fellow, Council on Energy, Environment and Water (CEEW)