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Run-up to COP27: LDCs want clear process to bridge $100 billion fund gap, loss & damage finance structure

Manjeet Dhakal, advisor to the LDC chair, talks about challenges faced by disadvantaged countries & their agenda for CoP27

As many as 46 nations are part of the Least Developed Countries (LDC) group, which are highly vulnerable to climate change and least-equipped to reduce emissions and adapt. 

These countries will demand action from wealthier countries at the 26th Conference of Parties (CoP27) to the United Nations Framework Convention on Climate Change.

In the run-up to CoP27, Down To Earth caught up with Manjeet Dhakal, advisor to the LDC chair and head of the LDC Support Team at the non-profit Climate Analytics (CA), to understand the challenges faced by the disadvantaged nations and their agenda.

Rohini Krishnamurthy: What kind of challenges are the LDCs facing? 

Manjeet Dhakal: LDCs are categorised as a special group of countries based on their economies. The COVID-19 pandemic and debt crisis have exposed how vulnerable we are. The Russia-Ukraine war has affected food security all around. 

Many countries realised for the first time how vulnerable we were in importing food and how the economy has changed. Undoubtedly, LDCs are the hardest hit by any kind of shock — natural or human-induced climate shocks.

At CoP, there is a series of agendas that are technical and procedural in nature. It may be hard to explain them to the people on the ground who, are experiencing difficulties from slow-onset events, extreme events or economic impacts. 

RK: What is the priority for LDCs to address these challenges?

MD: We have a set of expectations that we want delivered right away. In terms of the broader thematic areas, we expect progress on the global goal on adaptation (a system to assess countries’ progress on adaptation actions and ramp up adaptation funding). It was established under the Paris Agreement in 2015. 

This involves system for tracking and assessing progress on adaptation actions, and catalysing adaptation funding linking with the temperature target of 1.5 degrees Celsius, including the finance necessary for implementing adaptation action. We are mandated to have an outcome on this goal by next year at CoP28. But this year, we hope to have an interim decision that helps to track progress on adaptation for the Global Stocktake next year. We also expect decision on providing guidance for the implementation
of national adaptation plan prepared by countries outlining their adaptation priorities.

Last year, a mitigation work programme was designed in Glasgow to put the world on the right track to limit temperature rise to 1.5°C. Scientists called for a reduction of 45 per cent of greenhouse gas emissions compared to 2010 by the end of this decade. 

Emissions are set to rise by 10 per cent even if all the nationally determined contributions (NDC) are implemented. So, this mitigation work programme has to be designed in a way that can help limit temperature rise to 1.5°C. And for LDCs, this is key because we cannot adapt beyond that. 

The need for funding beyond 1.5°C will be much higher than what has been discussed and delegated. So, this CoP should be a milestone in delivering a clear key roadmap to take us towards 1.5°C within this decade.

On climate finance, we want a clear process to be set up to fill the gap of $100 billion, which has not been met yet. Developed nations promised to mobilise $100 billion annually 12 years ago by 2020. 

And still, in 2020, it was around $83 billion, according to the Organisation for Economic Co-operation and Development (OECD). Also, there was a decision made in Glasgow (CoP26) to double the adaptation finance compared to 2019 by 2025. We expect that this CoP will help operationalise how the doubling will be done. 

The final one is on loss and damage. The institutional arrangement to fund loss and damage has to be established at this CoP. Loss and damage have been discussed in the last 20-plus years. We hope the COP in Sherm El Sheikh will be a milestone in making decision to establish the funding arrangement for loss and damage. We also expect to have decision on finalizing institutional arrangement for Santiago Network on loss and damage.

RK: You have been a part of these negotiations since 2009. Have you seen any changes in how CoP operates?

MD: We have made some progress, but it is nowhere near where it should be. But there is a silver lining. In 2016, when all the countries submitted their NDCs, assessments showed that the emission would rise by about 20-23 per cent. 

In 2022, it will increase by only 10 per cent with revised NDCs. So for the first time, we are starting to see the curve going downward. So for me personally, I think this gives a little bit of hope that this process is delivering. 

And it’s also that there is no other alternative option. As this is a global problem, we need a global solution.

RK: How will you urge the developed countries to honour their commitments and ramp up climate action?

MD: LDC will work closely with the Group of 77 (G77, a coalition of 134 developing countries) and the preparatory meetings of negotiating group are in progress now. As, we all share the same planet, we all have an important role to save it. 

RK: CoP 27 is being called “implementation CoP”. What is your take on it?

MD: Targets made by countries to reduce emissions or mobilise finance are not enough. So, we will also have to raise ambition. 

If you look at the mitigation and even finance, whatever has been presented and provided are not enough. So, continue implementing but also equally raising ambition remains key.

RK: Given that as many as 54 nations are facing a severe debt crisis. What should be done to reduce the burden on the developing world?

MD: We were clear from the beginning that climate finance should be public finance and grant-based. Much of finance currently is through loans, which increases the financial difficulty in developing countries. 

Another challenge is access to funds. It is difficult for many of our countries to go through all the lengthy bureaucratic processes in the multilateral fund (a channel that provides climate finance).

Consider the loss and damage situation, when a country faces extreme disasters such as floods, landslides or glacier lake outbursts, we need ground support on the ground immediately. 

The first 12 hours in any disaster will be so crucial to save lives. In the current system, to get financial support, we will have to write a proposal, submit it and go through all the processes. This takes years. Therefore, the current climate finance architecture is not fit for purpose to respond to loss and damage. 

And also, considering that LDCs have the least capacity, it is challenging to work on all those technical details while preparing funding proposals. For example, countries were asked to explain the climate rationale for getting financial support in a situation where there were no facilities that record hydrometeorological data for the last 30 years. For such context, the process needs to be simplified.

Many of these countries may not have had the facilities to make such measurements in the past. The process needs to be simplified.

RK: There is a new climate finance goal being discussed. What lessons should stakeholders learn from the past?

MD: The new finance goal will be called New Collective Quantified Goal (NCQG). The current climate finance goal of 100 billion dollars a year by 2020 was decided in 2009. 

This was not based on any scientific assessment and on the needs of the developing countries. It was a political number. 

The new quantified goal on climate finance should be based on science and the needs of the developing country. It should consider not only the current impacts but also future ones. 

We see the NCQG as an opportunity to establish the third pillar, loss and damage, together with mitigation and adaptation.

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