The Hindu Editorial Analysis- 2nd January 2025 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

COP29, climate finance and its optical illusion

Why in News?

Developed nations have set a climate finance goal of $300 billion annually by 2035, but this falls short of the financial support needed by developing countries for climate action. 

•  Developing countries require significantly more funding, estimated between $455 billion to $584 billion per year, to meet their climate commitments. 
•  The New Collective Quantified Goal on Climate Finance (NCQG), discussed at the 29th Conference of the Parties (COP29), aims to replace the previous $100 billion annual target but has been criticized for being inadequate. 

Historical Context of Climate Finance

•  Climate finance has been a key issue since the start of UN-led climate discussions in 1991, leading to the United Nations Framework Convention on Climate Change (UNFCCC) in 1992. 
• Article 4(7) of the UNFCCC connects the climate actions of developing countries to the finance and technology provided by developed nations. 
•  The Paris Agreement reinforces this by requiring developed countries to mobilize finance for developing nations, recognizing finance as crucial for climate action. 

Shortcomings in Financial Commitments

•  In 2009, developed countries promised to mobilize $100 billion annually by 2020, a target that was only met in 2022. 
•  This amount is insufficient to meet the increasing financial needs for climate actions as outlined in developing countries' Nationally Determined Contributions (NDCs). 
•  The 29th COP aimed to establish the NCQG to replace the $100 billion goal, but the proposal from developed nations fell short of the $1.3 trillion annually needed by developing countries by 2030. 

Inadequacies in Climate Finance Goals

•  Developing countries require between $455 billion and $584 billion annually for climate action, according to the UNFCCC’s finance committee. 
•  The NCQG lacks specific funding targets for least developed countries (LDCs) and small island developing states (SIDS). 
•  During COP29, SIDS requested $39 billion and LDCs $220 billion, but these requests were not addressed. 
•  The Global Stocktake 2023 indicated future costs could range from $447 billion to $894 billion annually by 2030, but this was not reflected in the NCQG discussions. 

India’s Position on Climate Finance

•  India supports climate finance based on equity and the principle of common but differentiated responsibility and respective capability. 
•  India advocates for mobilizing $1.3 trillion annually by 2030, with at least $600 billion in grants and concessional resources. 
•  India expressed disappointment with the NCQG’s adoption without its input and rejected the proposal as inadequate and unfair. 
•  India highlighted that insufficient finance hampers its ability to implement and enhance its NDCs. 

Responsibilities of Developed Nations

•  The Paris Agreement depends on ambitious and effective NDCs from developing countries. 
•  Developed nations need to improve the scale and quality of climate finance and create a coherent climate finance framework. 
•  Providing adequate, accessible, and affordable climate finance is crucial for enabling developing countries to achieve their climate action objectives. 

Conclusion

•  Adequate climate finance is essential for developing nations to meet their climate commitments and contribute to global climate goals. 
•  Developed nations must significantly increase their financial contributions and ensure that climate finance is accessible and affordable. 
•  Without equitable and sufficient finance, global efforts to combat climate change and achieve the targets set by the Paris Agreement will be inadequate.