Hindu Editorial Analysis : 1-January-2025
The 29th Conference of the Parties (COP-29), held in Baku, brought ambitious goals for addressing climate change. However, the outcomes have been met with significant skepticism, especially regarding climate finance. Despite the commitments made, many believe that the financial support promised to developing countries remains insufficient.
Background on Climate Finance
The UNFCCC and Climate Finance
Climate finance has been a key component of international climate agreements since the United Nations Framework Convention on Climate Change (UNFCCC) was created in 1992. According to Article 4(7) of the UNFCCC, developed nations are required to provide finance and technology to developing countries to help them meet their climate goals.
The Paris Agreement
Under the Paris Agreement, Article 9(1) mandates that developed countries mobilize finance to support the climate efforts of developing nations. This commitment was reaffirmed with the goal of helping countries mitigate and adapt to climate change.
IPCC’s Role in Highlighting the Need for Finance
The IPCC’s Sixth Assessment Report underscores the importance of finance, technology, and capacity-building in supporting developing countries. The report also highlighted how human activities have led to a 1.1°C rise in global temperatures since pre-industrial times, making the need for urgent climate action more critical.
Climate Finance Shortcomings
Falling Short of Commitments
Developed countries had promised to provide $100 billion annually by 2020 to support developing nations. However, this target was only met in 2022, and even then, the amount was seen as insufficient to meet the real financial needs of these countries.
Unrealistic Proposals at COP-29
At COP-29, a new proposal known as the New Collective Quantified Goal (NCQG) was put forward, aiming to mobilize $300 billion annually by 2035. This figure falls short of the $455 billion to $584 billion annually that the UNFCCC’s Standing Committee on Finance identified as necessary.
Inadequate Support for Vulnerable Countries
Small Island Developing States (SIDS) and Least Developed Countries (LDCs) made specific demands for financial support. SIDS requested $39 billion, while LDCs sought $220 billion. However, no specific allocation floors were set to address these needs, leaving these nations vulnerable.
Loss and Damage Costs
The Global Stocktake (2023) estimated that the costs of loss and damage due to climate change could reach $447 billion to $894 billion per year by 2030, highlighting a significant gap in financial commitments.
India’s Stance and Concerns
India has been vocal about the need for equity and responsibility in climate finance. It emphasizes the principle of common but differentiated responsibility and respective capability, calling for a $1.3 trillion target by 2030, including $600 billion in grants and concessional resources.
India rejected the NCQG proposal, arguing that it lacked consultation with developing countries and did not show enough ambition. India also criticized the expectation for developing nations to mobilize their own resources, which could hinder the implementation of their Nationally Determined Contributions (NDCs).
What Developed Nations Must Do
Raise Financial Commitments
Developed countries must increase both the scale and quality of climate finance to align with the ambitions of developing nations. This means providing more funds that are both accessible and adequate.
Ensure Accessibility
A coherent climate finance architecture should be developed to ensure that finance is not only available but also accessible to those who need it most.
Foster Trust and Collaboration
Trust between developed and developing nations needs to be rebuilt. Transparency and inclusivity in negotiations will be key to strengthening partnerships and ensuring that climate goals are achieved globally.
Support Vulnerable Nations
It is essential to establish specific financial allocation floors for Small Island Developing States (SIDS), Least Developed Countries (LDCs), and other vulnerable nations to ensure they receive the support needed to address their unique challenges.
Why In News
Despite the ambitious goals set at the 29th Conference of the Parties (COP-29) held in Baku, the outcomes have been met with skepticism and criticism, particularly regarding climate finance, as many feel that the financial commitments made by developed nations remain inadequate to meet the pressing needs of developing countries. This has raised concerns about the effectiveness of current climate policies and the genuine willingness of wealthier nations to shoulder their responsibilities in addressing global climate challenges.
MCQs about Climate Finance: A Critical Issue at COP-29
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What was the key concern raised at COP-29 regarding climate finance?
A. The unrealistic targets set for carbon emissions reduction
B. The inadequacy of financial commitments made by developed countries
C. The lack of attention to technological solutions for climate change
D. The focus on adaptation over mitigation efforts
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According to India, what financial target should be set for climate finance by 2030?
A. $100 billion annually
B. $455 billion annually
C. $1.3 trillion, with at least $600 billion in grants and concessional resources
D. $300 billion annually by 2035
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What is the role of climate finance under the Paris Agreement?
A. To help developed countries meet their own climate goals
B. To provide financial support to developing countries for mitigation and adaptation
C. To ensure that all countries reduce emissions equally
D. To focus on funding technology for carbon capture
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Which financial support demand was made by Small Island Developing States (SIDS) at COP-29?
A. $100 billion
B. $220 billion
C. $39 billion
D. $1 trillion
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