Unlocking the Trillions for Climate Action

Opportunities in the NCQG Decision

The NCQG decision mandates the Presidencies of COP29 and COP30 to produce a “Baku to Belem Roadmap to $1.3T”. This roadmap process can bring together multiple actors to look at fair ways to scale up international climate finance. It includes reforms to the international financial architecture, unlocking more finance and delivering debt relief. Additionally, it focuses on raising innovative sources of finance and better using fiscal policy to direct private finance towards climate investment needs.

Implementation of the NCQG will be part of the global stocktake every five years, providing an opportunity to revise the mobilization goal upwards. If the political outlook for international cooperation improves and there is progress in reforming institutions and tapping innovative sources, the goal could be increased.

Addressing the Needs of Vulnerable Countries

During the fights among major powers in Baku, vulnerable countries like Least Developed Countries (LDCs) and Small Island Developing States (SIDS) lost out. Currently, only 2.8% of international climate finance reaches SIDS and 18% goes to LDCs, despite their high vulnerability. The NCQG decision pushes climate finance providers to increase funding for these countries, especially as concessional and grant financing, and improve access.

Vulnerable countries also focus on the need for more funding to address loss and damage caused by climate change. A new Fund for Responding to Loss and Damage was created in the last two years. The decision recognizes the need for urgent action but lacks specific targets for loss and damage. With climate impacts rising, this issue will persist, and countries need to find a way to discuss it.

The Need for Adaptation Finance

At COP26 in 2021, developed countries agreed to double their collective provision of adaptation finance by 2025. However, the NCQG decision lacked a specific goal on adaptation finance. MDBs have announced a rise in adaptation finance for low- and middle-income countries, showing that a higher goal is achievable. A new adaptation finance goal could emphasize scaling up provision for vulnerable countries and link to Article 9.4 of the Paris Agreement.

Getting more and better international climate finance is essential. Rich countries must not declare the job done and continue to work towards increasing financing. The global community needs to mobilize trillions in climate finance to safeguard future prosperity and prevent the costs of unchecked climate change.