COP27: The need for âNew Collective Quantified Goalâ in Climate Finance
Global South is spending five times more on debt repayments than on addressing the climate crisis’s impacts
Developed countries committed to mobilise US $100 billion in climate finance annually jointly in 2009 at the 15th Conference of Parties (COP15) to the United Nations Framework Convention on Climate Change.
The funding could be drawn from public, private and alternative sources of financing. But these wealthy nations have repeatedly failed to meet this target.
Oxfam has estimated that climate assistance provided to developing countries ($21-24.5 billion) was one-third of the estimates provided by the intergovernmental finance group Organisation for Economic Co-operation and Development (OECD).
The disparity in estimates from OECD and Oxfam stems from the fact that the world has yet to agree on a definition of climate finance consensually.
This year, along with climate finance, a New Collective Quantified Goal (NCQG) will be on the table for deliberations at COP27. The NCQG is expected to be finalised by 2024.
Developing nations want the new goal to secure funds in trillions, given the need to implement the Paris Agreement, while wealthy countries want to expand the donor base.
The call for ramping up climate finance is getting louder.
The COVID-19 pandemic and the Russia-Ukraine war have pushed as many as 54 countries into a severe debt crisis. The combined onslaught of debt and climate change is also putting the future of Small Island Developing States (SIDS) in peril.
Overall, these nations have spent 18 times more in debt repayments than they received in climate finance.
African governments owe three times more debt to western banks, asset managers and oil traders than to China. Asia received 25% of global climate finance despite being home to 60% of the world’s population.
The Global South is spending five times more on debt repayments than on addressing the climate crisis’s impacts.
Against this backdrop, nations are looking beyond conventional financing tools such as grants and loans.
Deliberations at COP27 would clarify whether the NCQG will deal with financial flows from developed to developing countries or include all flows. There is also a need to define whether NCQG will focus on a single global goal or multiple sub-goals, such as adaptation and mitigation.
However, with little time left, stakeholders must ensure that mistakes made while framing climate finances are not repeated.
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