Raise $1tr annually for developing nations to deliver on Paris pact goals: Report
The Independent High-Level Expert Group on Climate Finance report said that the mobilisation should be about $1.3 trillion by 2035 while warning against a delayed action
Talks at the 2024 UN Climate Change Conference (COP29) in Azerbaijan’s Baku should focus on mobilising at least $1 trillion annually by 2030 in external finance from all sources for the investments necessary by emerging market and developing countries (EMDCs) other than China to deliver on Paris Agreement goals, a report by the Independent High-Level Expert Group on Climate Finance has said. The mobilisation should be about $1.3 trillion by 2035, it added.
The report warned that any shortfall in investment before 2030 will place added pressure on the following years, creating a steeper and potentially more costly path to climate stability. “The less the world achieves now, the more we will need to invest later.”
The report cautioned a delayed action means mobilisation of even larger sums in shorter timeframes to catch up on critical targets. “Additionally, investment needs for adaptation and resilience, as well as loss and damage and restoration of nature, will rise sharply as climate and nature risks escalate,” the report said.
The Economists Amar Bhattacharya, Vera Songwe, and Nicholas Stern-led expert group supported the deliberations on the climate finance agenda under successive COP Presidencies since COP26. The group was tasked to help develop and put forward policy options and recommendations to encourage and enable the public and private investment and finance necessary for the delivery of the commitments, ambitions, initiatives, and targets of the Paris Agreement.
The Glasgow Climate Pact, the Sharm el-Sheikh Agenda, and the COP28 Global Climate Finance Framework reinforced the agreement.
The Paris Agreement seeks to hold the increase in the global average temperature to well below 2°C above pre-industrial levels. It underlines the need to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.
In its third report, the expert group estimated that the global projected investment requirement for climate action to be around $6.3–6.7 trillion annually by 2030, of which $2.7–2.8 trillion is in advanced economies, $1.3-$1.4 trillion in China, and $2.3–2.5 trillion in EMDCs other than China.
EMDCs other than China will account for almost 45% of the average incremental investment needs from now to 2030 but they have been falling behind, especially in Sub-Saharan Africa. For 2035, the report estimates global investment requirements for climate action to be around $7–8.1 trillion annually. Advanced economies will need $2.6–3.1 trillion, China $1.3–1.5 trillion, and EMDCs other than China $3.1–3.5 trillion. These needs are estimated to be required for the meeting the Paris Agreement goals. The investments will also make a vital contribution to sustainable growth and the achievement of the Sustainable Development Goals.
HT reported on Thursday that developing countries rejected the first draft of the new collective quantified goal (NCQG), prompting co-chairs of the programme at the COP 29 to release another iteration on Wednesday morning.
The options span a wide range reflecting priorities and preferences of all negotiating groups among developed and developing countries—from a floor of $100 billion to $ 2trillion. It also has options for contributors, reflecting the evolved and dynamic nature of emissions and their economic capabilities.