Market-rate climate finance will put additional financial pressure on developing countries, India said on behalf of those countries. “If ambitious climate goals are to be achieved, they must be supported by intentions that are reflected in an ambitious, appropriate and sensible approach to financial resources by developing countries,” Union Environment Minister Bhupender Yadav said at the Like-Minded meeting on Wednesday. Developing Countries Ministerial Dialogue (LMDC) on a New Collective Quantified Climate Finance Goal (NCQG).
Yadav said the UN Framework Convention on Climate Change’s Standing Finance Committee estimates that between $6 trillion and $11 trillion in resources are needed by 2030 to meet the targets that developing countries have set in their Nationally Determined Contributions (NDCs). He added that climate action to meet the NDC target requires financial, technological and capacity-building support from developed countries. “The ambitious target set by developing countries requires a substantial boost in climate finance from a minimum of $100 billion per year.”
Yadav said resource mobilization must be led by developed countries and should be long-term, leveraged and climate-specific with an equitable distribution between adaptation and mitigation projects. “The $100 billion pledge made by developed countries in 2009 was not only small compared to the scale of the need, but has not yet been achieved.”
He said that needs already identified can lead to the mobilization and provision of resources by developed countries to developing countries. Yadav called it necessary to focus on the quantity and quality of resource mobilization. The LMDC made it clear that the extent of public resources that developed countries bring will play a critical role in determining climate fluxes. Focusing only on private finance is discouraging, he added.
In a statement, the LMDC said previous technical expert dialogues on the new collective quantified target under the ad hoc work program provided an opportunity to exchange ideas. She called for a more structured and targeted approach that would enable the successful fulfillment of the mandate by 2024.“Discussions in the Technical Expert Dialogues in 2023 should focus mainly on quantum, recognizing the urgency of such discussions for developing countries. This means that the discussion of quality and other elements such as access and transparency is incredibly important,” the statement said. He added that a structure must be put in place to ensure that decisions on all these elements can be taken by 2024.
LMDC said it is also important to stress in this context that access to market-rate financing for climate action will put significant pressure on developing country finances that the world cannot afford. Former climate negotiator and ambassador Manjeev Singh Puri said financing for climate action by developing countries is a critical key to meeting global climate goals. “Given that the Copenhagen [2009] targets have not been met, it is imperative that developed countries set and commit to new and this time firm climate finance targets,” he said in response to the statement.
At the climate change conference in Sharm el-Sheikh (COP 27), the issue of loans as climate finance burdening developing countries was raised. “The Global North borrows at interest rates between one and 4%, the Global South at 14%. And then we wonder why fair energy partnerships are not working,” said Barbados Prime Minister Mia Amor Mottley at the opening ceremony of the Climate Implementation Summit in Sharm El-Sheikh.
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