New Collective Quantified Goal (NCQG) on Climate Finance:

Key Objectives of NCQG:

1. Enhanced Financial Support:
   • Aim to mobilize higher financial resources to meet the increasing climate-related needs of developing countries.
   • Cover mitigation, adaptation, loss and damage, and capacity building.
2. Inclusivity and Equity:
   • Ensure that the financial flows address the priorities and needs of developing nations.
   • Focus on climate justice, recognizing historical responsibilities.
3. Predictability and Accessibility:
   • Provide clear, predictable financial commitments to allow developing countries to plan and implement climate actions effectively.
   • Simplify access to funds for vulnerable nations.
4. Focus on Loss and Damage:
   • Include provisions to address loss and damage caused by climate change, a key demand from developing nations.

Timeline

• Paris Agreement, 2015: Called for the setting of a new goal to go beyond $100 billion annually by 2025.
• Glasgow Climate Pact, COP26 (2021): Initiated discussions on NCQG and mandated a formal process to finalize the framework.
• Ongoing Negotiations: Negotiations are continuing under the UNFCCC’s Ad Hoc Work Programme to determine the amount, sources, and mechanisms of the new goal.
• Expected Implementation: From 2025 onwards, as the successor to the $100 billion goal.

Proposed Features of the NCQG:

1. Higher Financial Target:
   • Recognizes that the $100 billion goal is insufficient to meet the climate needs of developing nations, which could run into trillions of dollars annually.
2. Diverse Sources of Finance:
   • Mobilize funds from public and private sources.
   • Encourage contributions from multilateral development banks, philanthropic organizations, and innovative financing mechanisms.
3. Balanced Allocation:
   • Ensure balanced funding between mitigation and adaptation, addressing the criticism that mitigation projects currently receive a disproportionate share.
4. Transparency and Accountability:
   • Establish mechanisms to track contributions and disbursements more effectively.
   • Ensure donor countries meet their commitments.
5. Support for Vulnerable Nations:
   • Prioritize funding for least-developed countries (LDCs), small island developing states (SIDS), and African nations.

Challenges:

1. Defining the Quantum:
   • Determining the exact amount needed for the NCQG remains contentious, with developing countries pushing for trillions of dollars annually.
2. Trust Deficit:
   • Developed countries have struggled to meet the existing $100 billion target, leading to skepticism about their ability to fulfill higher commitments.
3. Private Sector Involvement:
   • Engaging the private sector while ensuring equity and climate justice can be complex.
4. Implementation and Accessibility:
   • Ensuring funds are easily accessible to those who need them most, especially the most vulnerable nations, remains a challenge.

Way Forward:

1. Ambitious Commitment:
   • Developed countries must commit to a significant increase in funding, reflecting the growing urgency of climate action.
2. Innovative Financing:
   • Explore new mechanisms, such as carbon pricing, green bonds, and climate taxes, to mobilize additional resources.
3. Strengthening Institutions:
   • Enhance the capacity of international financial institutions like the Green Climate Fund (GCF) to handle larger financial flows.
4. Capacity Building:
   • Provide technical and institutional support to developing countries to effectively utilize funds.