What is 2015 Paris Climate Agreement?
It is a legally binding international treaty on climate change that was adopted by 196 countries at the Conference of the Parties COP 21 in Paris in 2015.
Countries aim to reach global peaking of greenhouse gas emissions as soon as possible to achieve a climate-neutral world by mid-century.
The main goal of the Paris Climate Accord is to limit global warming to well below 2° Celsius and preferably limit it to 1.5° Celsius, compared to pre-industrial levels.
Rich countries should help poorer nations by providing "climate finance" to adapt to climate change and switch to renewable energy.
The agreement requires rich nations to maintain a $100bn a year funding pledge beyond 2020.
What is New Collective Quantified Goal (NCGQ)?
A commitment of ‘$100 billion per year till 2020’ to developing nations from developed countries was a target set at the Conference of Parties (COP) in 2009.
The 2015 Paris Climate Agreement agreed on setting a New Collective Quantified Goal (NCGQ) for climate financing prior to 2025 — a reference point which accounts for the needs and priorities of developing nations.
The NCGQ is thus, termed the “most important climate goal”. It pulls up the ceiling on commitment from developed countries.
The NCGQ is expected to be finalised by 2024. It will replace the current climate finance goal of $100 billion annually from developed countries.
Why do we need a new finance goal?
Out of the promised $100 billion per year, developed countries provided $83.3 billion in 2020, as per a report by the Organisation for Economic Co-operation and Development.
These figures may be misleading and inflated by as much as 225%, an Oxfam analysis found, as “there is too much dishonest and shady reporting”.
The $100 billion target set in 2009 was seen more as a political goal, since there was no effort to clarify the definition or source of ‘climate finance’.
The economic growth of developed countries has come at the cost of high carbon emissions, and thus they are obligated to shoulder greater responsibility.
While funds available for climate finance have quantitatively increased, they are inaccessible, privately sourced, delayed and not reaching countries in need.
Recent study by the Centre for Science and Environment found roughly 5% of climate finance comes from grants; the rest through loans and equity which burden developing countries with a “debilitating” debt crisis.
Countries most in need of finances have to wait years to access money and pay interest high rates, thus increasing their debt burden.
What do developed countries say?
Developed countries argue that NCQG must be viewed as a “collective goal” for all developed and developing countries.
Experts worry this argument pushes the “net zero” pathways onto developing countries, which cannot feasibly pay for mitigation, adaptation, loss and damage, along with sustainably developing key elements of infrastructure.
Countries also argue for mobilising private-sector investments and loans as the critical component of climate finance.
What is at stake in 2023?
Countries are on a tight deadline to agree upon the NCQG ahead of 2024.
There’s no official number yet, but a global transition to a low-carbon economy requires investments of at least $4 trillion to $6 trillion a year.
Some argue that instead of identifying a single aggregate figure, the NCQG could also set separate targets (or sub-goals) for focus areas such as mitigation, adaptation and loss and damage.
The aim is to focus on scaling up concessional financing, stopping debt creation and allowing NCQG to be more of a “process” rather than a goal towards equitable and people-led transition.
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