Climate Finance in Global Negotiations
Finance has been a central issue in climate change negotiations since the 1992 UNFCCC.
It is vital for enabling developing countries to fulfill their climate commitments, as outlined in Article 4(7) of the UNFCCC and Article 9(1) of the Paris Agreement.
The Intergovernmental Panel on Climate Change (IPCC) highlights that financial support, capacity-building, and technology transfer are critical for enabling climate action in developing countries.
Shortfalls in Climate Finance
Developed countries pledged to mobilize $100 billion annually by 2020 for developing countries, but this was only achieved in 2022.
The amount remains insufficient to meet the needs of developing countries’ Nationally Determined Contributions (NDCs) or to limit global temperature rise to 1.5°C.
The financial needs of developing countries, based on their NDCs, are estimated to be between $455 billion and $584 billion annually, far exceeding the $100 billion mark.
COP29 in 2024 aims to set a new financial target (NCQG), but the initial proposal falls short of what developing countries, including India, demand.
India’s Position on Climate Finance
India insists that climate finance should be guided by the principle of common but differentiated responsibility, where developed countries provide more support to developing nations.
India calls for $1.3 trillion by 2030 for climate finance, with at least $600 billion in grants and concessional resources.
India's stance is that the NCQG must include adequate provisions to fulfill its NDCs.
India rejected the current NCQG proposal, criticizing the lack of consultation and its inadequate support for developing countries.
India views the small financial commitment as undermining the ambition and implementation of its climate goals.
What Needs to Happen
Developed nations must increase the scale and quality of climate finance, ensuring it is accessible, affordable, and directly available to developing countries.
This is crucial for enabling the global South to fulfill its climate ambitions and meet the goals of the Paris Agreement.
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