As the global stage converges in Baku for COP29, the intricate web of climate finance negotiations takes center stage. The New Collective Quantified Goal (NCQG) emerges as a pivotal element, revealing both the strides made and the persistent challenges that could potentially derail global climate action. These discussions shed light on the complexity inherent in global governance.

The New Collective Quantified Goal: A Critical Juncture

During the COP29 negotiations, the NCQG stands as a crucial piece of the climate finance puzzle. As parties to the Paris Agreement strive to define a new financial target post-2025, this goal builds upon the previous commitment of developed countries to mobilize $100 billion (USD) per year by 2020. Under the Paris Agreement, developed countries are obligated to provide finance (Article 9.1) and mobilize resources (Article 9.3). These obligations are integral to aligning financial systems with the climate objectives outlined in Article 2.1c.However, several key questions remain unresolved. Firstly, determining the "quantum" or the increase in mobilization goals is a highly contentious issue. There is a debate over how much additional financial support is needed and how it should be allocated. Secondly, the question of "to whom" the funds should be directed is also a matter of contention. Should all developing countries benefit equally, or should there be a special focus on Small Island Developing States (SIDS) and Least Developed Countries (LDCs) based on their heightened climate vulnerability? Additionally, the source of these funds remains a point of contention. While the Paris Agreement only mentions "developed countries," there is a push from some to expand this group to include newly wealthy countries. This expansion is currently opposed by many developing countries, and resolving this issue will be crucial in finalizing the deal.These technical questions are deeply intertwined with underlying political tensions regarding development finance and historical obligations.

Beyond the NCQG: The Broader Climate Finance Regime

While the immediate focus is on the NCQG negotiations, the broader challenge lies in reshaping the global climate finance regime. The $100 billion annual target for 2020 to 2025 is an important milestone, but it represents only a fraction of the trillions needed for a comprehensive transition. The UNFCCC's Standing Committee on Finance estimates that developing countries require around $5.8 to $5.9 trillion cumulatively by 2030 to meet their Nationally Determined Contributions (NDCs) commitments.There is a call to connect UNFCCC mechanisms with the broader financial ecosystem, including multilateral development banks, private investments, and public-private partnerships. However, developing countries often approach these connections with skepticism, as they have faced difficulties in working with these institutions in the past.

The Impact of Political Shifts

Political developments outside of COP29 are also influencing the negotiating dynamics. For instance, the U.S. elections have had a significant impact. President-Elect Trump's stated intention to withdraw from the Paris Agreement again has diminished the weight of U.S. influence in this year's negotiations. While this presents an opportunity for other nations to take on leadership roles, such as Brazil, which has signaled its willingness to do so, it also raises concerns about the weakening of multilateral institutions. These institutions play a crucial role in coordinating global efforts to address climate change.

The Path Forward

As negotiations continue, finding compromises that balance the diverse interests at the table will be key. This requires bridging the divides between developed and developing countries, ensuring that the NCQG reflects both ambition and fairness. It also involves integrating climate finance with the broader financial ecosystem in a way that builds trust and delivers tangible results.The success of COP29 hinges on finding creative and ambitious compromises. The stakes are high, but the potential for meaningful climate finance progress remains within reach. We must work together to ensure that the financial resources are directed towards the most vulnerable regions and that the global community takes significant steps towards a sustainable future.Michael WeisbergDeputy Director, Perry World HouseMichael Weisberg is deputy director of Perry World House, as well as Bess W. Heyman President’s Professor and Chair of Philosophy at the University of Pennsylvania.