India pitches for $1.3 trillion in annual climate support for developing nations

Intervening on behalf of like-minded developing countries (LMDCs), India said that developed countries need to commit to provide and mobilise at least $1.3 trillion every year in the New Collective Quantified Goal (NCQG) till 2030.

It should be through grants, concessional finance and non-debt-inducing support that cater to the evolving needs and priorities of developing countries, without subjecting them to growth-inhibiting conditionalities in the provision of finance, it said in an official statement.

This comes as extreme weather events have become frequent and increasingly strong, affecting especially the Global South, which calls for heightening ambitions on climate action.

Delivering the statement, Naresh Pal Gangwar, additional secretary of the environment ministry and India's lead negotiator at CoP29 on Thursday said, “We are at a crucial juncture in our fight against climate change. What we decide here will enable all of us, particularly those in the Global South, to not only take ambitious mitigation action but also adapt to climate change. This CoP is historic in this context”.

Also Read: India to pitch for grants and concessional loans, instead of investments, at COP29

“The context of different national circumstances, sustainable development goals and poverty eradication, particularly with respect to the Global South, should not be lost sight of. These principles must form the basis for a strong outcome on the NCQG at CoP29," he said at the High-Level Ministerial on Climate Finance on Thursday at the global climate summit in Baku, Azerbaijan.

Global response

The statement firmly asserted that recognising the historical responsibilities and differences in capacities, the UNFCCC and its Paris Agreement envisage a global response to climate change, adhering to the principles of equity and common but differentiated responsibilities and respective capacities.

The statement recognised that such a scenario is vital for advancing towards COP30, where all parties are expected to submit their updated Nationally Determined Contributions (NDCs). Achieving this outcome will set a solid foundation for meaningful progress in global climate efforts, it noted.

Mint last week reported India planned to leverage its climate commitments to pitch for grants and concessional loans, instead of investments for the Global South in NCQG.

Talking further about the importance of the NCQG on climate finance, the statement emphasized that it cannot be changed into an investment goal when it is a unidirectional provision and mobilisation goal from the developed to the developing countries. The Paris Agreement is clear on who is to provide and mobilise climate finance – it is the developed countries, it added.

India strongly laid down the point that bringing in the elements of any new goal, which are outside the mandate of the convention and its Paris Agreement, is unacceptable. The statement ruled out any scope for re-negotiation of the Paris Agreement and its provisions.

Climate finance

Asserting that transparency and trust are the backbones of any multilateral process, India noted that there is no understanding of what comprises climate finance. Developed countries' performance regarding their existing financial and technological commitments has been disappointing.

Also Read: COP29 releases new plan on NCQG

India's intervention stated a clear definition of climate finance, in line with the provisions of UNFCCC and its Paris Agreements, will promote transparency and is vital for furthering constructive deliberations and building trust. In this regard, the statement said, “We take note of the work carried out by the Standing Committee on Finance, however, there is need to further work in arriving at a meaningful definition of climate finance”.

$100 billion by 2025

The intervention called out the developed countries and stated that they committed to jointly mobilise $100 billion per year by 2020, a deadline extended to 2025. While the $100 billion target is already inadequate compared to the actual requirements of developing countries, the real amount mobilised has been even less encouraging.

Developing countries require up to $1.5 trillion a year for their unique climate needs and net zero transition, according to various estimates. But the loss and damage fund negotiated at COP27 has failed to take off after being operationalised at COP28.

To be sure, the actual climate action funding requirement, however, could be several times higher than the estimates of $1-1.5 trillion. The UNFCCC Standing Committee on Finance, based on its assessment of NDCs, estimates that a total of $5.8-5.9 trillion will be needed by 2030 to cover the needs of 153 developing countries.

Even this is likely to be an underestimation given that only a small proportion of requirements were accounted for across the documents provided. Regionally, around $2.5 trillion of global need comes from African states, around $3.2 trillion from Asia-Pacific and around $168 billion from Latin American and Caribbean nations, according to the Asian Development Bank.

Expanding list of contributor

Because of the scale of the financing required, some experts and countries, including Switzerland, Canada and the US, have suggested expanding the list of countries mandated to contribute, also called the contributor base, to include emerging countries with high emissions and high incomes.

“The $100 billion was committed in 2009, 15 years ago. We have a common time frame for expressing ambitions every five years. There is a similar need in terms of climate finance. We are hopeful that developed countries will realise their responsibility to enable enhanced ambitions and make this CoP29 a success”, the MoEFCC statement read.

Also Read: COP29 stresses global financial reforms as world faces spectre of a 1.5°C rise

Consistent with the UNFCCC’s foundational principles of Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC) and equity, the Copenhagen Accord of 2009 or COP15 recognised the requirement to support climate action in developing economies with financial resources. In this connection, developed countries committed to providing $30 billion in climate finance to developing countries during 2010-2012, which was supposed to rise to reach $100 billion per year by 2020.

The Organisation for Economic Cooperation and Development (OECD) has annually reported on the progress towards the $100 billion per year by 2020 goal since 2015. Per the OECD, this target was reportedly achieved in 2022, two years behind schedule. However, some observers, including Oxfam, and developing countries have raised concerns over accuracy, methodology, and verifiability of the OECD figures. In contrast to the OECD’s claim to deliver $115.9 billion climate finance delivered in 2022, Oxfam estimates that the real value of support is between $27.9 and $34.9 billion.