European Capacity Building Initiative

Future of UNFCCC Process, New Finance Goals Discussed at ecbi New Delhi Seminar

The 2025 ecbi New Delhi seminar, which took place at the India International Centre on 6 January 2025, focused on: future arrangements for the UN climate change process to make it fit for purpose; and the New Collective Quantified Goal (NCQG) for climate finance.

Benito Müller, ecbi Director, opened the seminar by remembering long-term Co-Chair of the ecbi Advisory Committee, Ambassador Bo Kjellén from Sweden, who passed away peacefully on 26 December 2024.

Future Arrangements under the UNFCCC
Presenting on future arrangements for intergovernmental meetings under the UN Framework Convention on Climate Change (UNFCCC) to make it fit for purpose, Müller referred to the 2021 ecbi publication Quo Vadis COP? The report analysed participation in the UNFCCC Conferences of the Parties (COPs), with the number of participants increasing exponentially particularly in the aftermath of “mega-COPs” like Copenhagen and Paris (see figures below).

Müller said a 2024 update of Quo Vadis COP? describes three major issues arising from such mega-COPs: 

  • Climate vulnerable states can no longer afford to preside over or host COPs or draw attention to the climate impacts they face. Even larger countries with higher capacities shy away from hosting mega-COPs, drastically reducing the inclusiveness of the multilateral process and raising equity concerns.
  • Mega-COPs prevent serendipitous encounters between participants, which benefit the negotiations, from happening easily.
  • Mega-COPs pose a serious reputational risk for the multilateral climate change negotiations. They inflate public expectations of outcomes that make good headlines but are not meant to be delivered by COPs that focus on implementation but underplay the importance of successes under the Global Stocktake (GST), enhanced transparency reports, and new Nationally Determined Contributions (NDCs), which are critical for the process. This can result in reinforcing public perceptions that COPs are jamborees or junkets.

Müller suggested that as the UNFCCC negotiations shift to implementation mode, the institutions and processes of the global negotiations will also have to adapt and become fit for purpose. The 2024 ecbi report proposes new arrangements that reflect this new role, particularly by slimming down the COPs considerably to deal with technical matters related to implementation. He said political elements can be dealt with in processes outside the COPs that have already been established to support implementation on the ground – such as the Global Climate Action Agenda, the Marrakech Partnership, Regional Climate Weeks, and technical meetings and workshops that support countries in formulating and implementing policies and measures in support of climate ambition.

The 2024 update identifies a triad of distinct events happening at current COPs: negotiations (sessions of the governing and subsidiary bodies or SBs); summits; and trade expos. While all three are no doubt important, they need not be linked spatio-temporally.

Instead, the update proposes that the negotiations take place in Bonn at the World Conference Center (with capacity for 5,000 participants) without ministerial high-level segments. Summits can take place at critical stages when political leadership and ambition are necessary (for instance, nine months before NDCs are due) in the region that holds the COP Presidency or at the UN in Geneva. Expos can take place in the region that holds the COP Presidency, but not necessarily in the country of the Presidency. 

For instance, Müller said, Australia could offer to take on the COP31 Presidency in collaboration with the Pacific Island Forum (PIF) member countries and share the hosting of the triad-events between them. This would help overcome the exclusion problem as all PIF members could host all three elements at the same time.  Such a collaborative COP31 could encourage small and vulnerable countries to put themselves forward for future COP Presidencies.

During the discussion, participants agreed on the need for such reform, not just to increase the participation of more vulnerable countries, but also to reduce the workload for negotiators, who must manage pavilions at expos and side events and special or technical dialogues despite having small teams. They highlighted however, that:

  • hype around the COPs is necessary to raise public awareness on climate change and whip up political support;
  • ministerial intervention is sometimes necessary to unlock negotiations on difficult issues (but this could take place during biannual summits);
  • interaction between the negotiations and non-government actors, such as the private sector, is necessary to build support for contributions to climate finance;
  • countries that expect to draw political mileage from hosting such mega events may not necessarily support such reform; and
  • countries may not be willing to collaborate with regional partners to host COPs. 

Some participants also pointed to overlaps in the mandate of several forums, such as the G20, and BASIC or BRICS countries, etc., saying more efficient collaboration was necessary. Others said the focus on governments only in the negotiations should be reduced, given that collaboration with other stakeholders is critical for effective implementation and for sharing of information; expos are excellent for information exchange among all stakeholders (including governments); and regional meetings could allow for this exchange to take place in a meaningful manner. 

New Collective Quantified Goal on Climate Finance
Rajani Ranjan Rashmi, Distinguished Fellow, TERI, presented on the New Collective Quantified Goal (NCQG) on climate finance and its impact on global ambition. He recounted that paragraph 7 of the NCQG decision at COP29 in Baku calls on all actors to work together to enable the scaling up of financing to developing country Parties for climate action from all public and private sources to at least USD 1.3 trillion per year by 2035

Paragraph 8 sets a goal, with developed country Parties taking the lead, to mobilize at least USD 300 billion per year by 2035 for developing country Parties for climate action, from a wide variety of sources, such as public and private, bilateral and multilateral, and alternative sources

Rashmi noted that the USD 300 billion target falls short of the USD 1.3 trillion demanded by developing nations, and is far lower than even the most conservative estimates of what is needed. The decision itself notes, for instance, that costed needs reported in NDCs of developing country Parties are estimated at USD 5.1–6.8 trillion up to 2030 or USD 455–584 billion per year, and adaptation finance needs are estimated at USD 215–387 billion annually up until 2030. He noted that the agreed scale is surprisingly close to the assessments put forward by G20 experts (though they were not reflected in the G20 declaration), which are that USD 1.2 trillion will be needed for the Sustainable Development Goals and USD 1.8 trillion for climate change.

Rashmi listed the following elements as relevant to assessing the NCQG decision:

  • Ambition: Is the scale of finance agreed adequate or appropriate? How will it impact the global ambition (mitigation and adaptation)?
  • Responsibility: How does the NCQG address the issue of climate finance being the responsibility of developed countries?
  • Concessionality: How does the NCQG address concessionality in climate finance including flows through multilateral development banks (MDBs) and the private sector?
  • Contribution: Will the question of scale get enmeshed in the future with the issue of contributions by all?
  • Access: What does it say about access modalities?
  • Balance: Does it maintain balance between mitigation and adaptation?
  • Review: Is there a possibility of reviewing the NCQG?

He said the text does not clarify whether it seeks to address the ambition, implementation, or the financial gap. Paragraph 27 of the GST speaks to the ambition gap, calling for limiting global warming to 1.5°C by reducing greenhouse gas emissions by 43% by 2030, and 60% by 2035 relative to 2019 levels, and reaching net zero carbon dioxide by 2050. Paragraph 21 of the GST speaks to the implementation gap, stating that the impact of all unconditional NDCs by 2030 will only result in a 2% reduction compared to 2019 levels. Paragraph 22 notes that the impact by 2030 of conditional and unconditional NDCs will be a 5.3% reduction compared to 2019 levels.

Closing both the ambition and implementation gaps will depend on the finance gap, which is reflected in findings of the UNFCCC Standing Committee on Finance (SCF). The SCF Needs Determination Report estimates that USD 5.1 to 6.8 trillion will be needed annually for 48% of NDCs reported by 98 countries until 2030 (or USD 455-584 billion per year). Adaptation finance needs stand at USD 215-387 billion annually up to 2030. The GST estimates USD 5.8 to 5.9 trillion will be needed for the pre-2030 period. However, the NCQG decision does not fill this finance gap.

Rashmi further noted that the NCQG decision does not take into account developed country responsibility for climate finance, and the commitment to provide concessional funds, inherent in their climate finance obligation. It is also silent on the commitment of developed countries to provide a specific quantum of climate finance – the goal is not a provisioning goal, but only a mobilization goal. Although the decision reaffirms Article 9 of the Paris Agreement, which requires developed countries to take the lead and to provide public finance for developing countries, the absence of an operative NCQG decision signals a watering down of the commitments under this Article.

Moreover, said Rashmi, the NCQG is excessively reliant on MDBs and the private sector. While the OECD estimates that the previous US 100 billion commitment has been surpassed, 69% of the funds are provided as loans rather than grants (only 28%), rendering the claims questionable. The NCQG complicates matters further by legitimizing MDB flows (mainly loans to developing countries which need to be paid back) as climate finance. 

In addition, the decision references Article 2.1(c) of the Paris Agreement, which calls on Parties to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. While it recognizes existing barriers to redirecting capital to climate action, including the high costs of capital, unsustainable debt levels, high transaction costs, and conditionalities for accessing climate finance, there is no specific guidance on how these obstacles will be addressed. 

Rashmi said developing countries are encouraged to make contributions, including through South–South cooperation, on a voluntary basis. He noted proposals by Switzerland and Canada to define the threshold for contributions, either based on per capita income or per capita emissions. 

Also mentioned in the decision are the need to: balance contributions for mitigation and adaptation and between regions; provide funds for loss and damage; and ensure a just transition. The need to remove constraints to accessing climate finance is recognized, along with the enhancement of access in bilateral finance and further transparency. A special assessment of progress on this issue will take place in 2030.

Rashmi noted that the launch of the “Baku to Belém Roadmap to 1.3T”, which mandates a review of the NCQG in 2030. The Roadmap is likely to face several challenges, including: lack of trust on part of developing countries, who feel their concerns have been undermined; fragmentation through regional and bilateral agreements, which will weaken the spirit of multilateralism; and weakening of the principle of common but differentiated responsibilities.

In the discussion that followed, participants said ambiguity was deliberately introduced into the decision to keep both sides happy, but this has resulted in a decision that means very little. During the negotiations, developed countries made contributions from developing countries a redline, while also intensifying the focus on contributions from the private sector, philanthropies, NGOs and MDBs, and attempting to reopen elements of the Paris Agreement for negotiation. 

Concerns were also expressed that the Sharm el-Sheikh dialogue on Article 2.1(c) and its complementarity with Article 9 of the Paris Agreement will conclude at COP30, and could lead to a watering down of Article 2.2 of Paris Agreement, which calls for the Agreement to “be implemented to reflect equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances”. This will further weaken the link between the provision of finance by developed countries, as agreed in Article 9.1 of the Paris Agreement, and the ambition and implementation gap, said participants.

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