“Breaking News: Co-chairs Release New Draft Text on Climate Finance Goal, Development Banks Ready to Invest $120bn Annually”
Co-chairs of the climate finance talks have published a new draft text that has ballooned to 34 pages after developing countries requested all options be put back on the table. The text focuses on the New Collective Quantified Goal (NCQG) and includes various proposals for the size of the government finance goal, ranging from $100 billion to $2 trillion. Developed countries prefer a lower amount, while developing countries, led by the G77 and China, are pushing for $1.3 trillion or more.
The text also introduces specific proposals for minimum amounts of climate finance that should go to Least Developed Countries (LDCs) and Small Island Developing States (SIDS), with options for $220 billion for LDCs and $39 billion for SIDS each year. Additionally, there are options for climate finance to transition away from fossil fuels, with a target date of 2025 for phasing out inefficient fossil fuel subsidies.
In a separate development, Multilateral Development Banks (MDBs) have announced a commitment to provide $170 billion a year for climate finance by 2030, with over 70% of the funds ($120 billion) earmarked for low and middle-income countries. More than a third of this amount is designated for adaptation efforts. Experts believe this commitment could provide a basis for the NCQG to exceed the existing $100 billion per year target.
However, concerns have been raised about the MDBs’ definition of climate finance, with reports indicating that some high-emitting projects, such as fossil gas and airport expansions, are being counted as climate finance. Campaigners are also urging MDBs to mobilize an additional $130 billion a year from the private sector by 2030. The MDBs have emphasized their role as multipliers of climate finance, leveraging public money to attract private capital.
Meanwhile, world leaders are exploring innovative ways to increase climate finance, with Barbados’ Prime Minister suggesting levies on shipping companies, airlines, and fossil fuel extraction. A “Coalition for Solidarity Levies” has been formed by 14 countries and organizations to target carbon-intensive industries and raise additional funds for climate action.
In other news, global carbon dioxide emissions from fossil fuels are expected to increase by 0.8% in 2024, surpassing previous predictions of a peak. This rise follows a 1.4% increase in 2023 and highlights the ongoing challenge of reducing emissions to meet climate goals. Additionally, youth-led organizations are advocating for a “Universal NDC Youth Clause” to be included in countries’ updated national climate plans, calling for greater youth involvement in climate strategies. Several governments are expected to announce commitments to this clause in the coming days.