Discussions on climate finance have begun with tension at the 29th Conference of Parties (COP29) to the UNFCCC.
The G77 and China group, representing over 130 developing nations, has rejected the draft negotiating text. This text was intended as a foundation for negotiations, making the rejection a significant obstacle to progress.
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The Disputed Framework
The draft negotiating text, which was published in October, was an addendum to a summary report by the Co-chairs of the Ad Hoc Work Programme on NCQG. It was intended to summarize the discussions held throughout the year and provide a basis for future deliberations. However, the G77 and China, joined by other developing nations, argued that the text failed to adequately represent their positions. They rejected it on November 12, signaling a major setback at COP29.
The framework document was meant to guide negotiations by reflecting the priorities of various countries. But developing countries argue their demands were overlooked.
This discontent was echoed by the Like-Minded Developing Countries (LMDCs), the Alliance of Small Island Developing States (AOSIS), and the Independent Alliance of Latin America and the Caribbean (AILAC), among others.
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Demands from Developing Countries
The G77 put forth the following demands in their opening statements
- Request for a new text to be prepared by the Co-chairs before the next session of negotiations.
- Demand that developed countries commit to providing at least $1.3 trillion annually in climate finance for developing nations, based on evolving needs and priorities.
- New climate finance goal must align with existing commitments under the Paris Agreement (Articles 9.1, 9.3) and the UNFCCC (Article 4). It must be a “provision” goal, not an “investment” goal.
- Non-concessional loans and export credits should not be counted as climate finance.
- The new goal must address barriers to accessing finance due to the design of the international financial system.
- Developed countries must provide arrears for the $100 billion climate finance commitment.
- Resources provided under the new goal must be predictable, new, additional, adequate, grant-based, concessional, and must not create fiscal constraints or increase debt burdens for developing nations.
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What Developed Countries Are Saying
Developed nations have shared their perspectives on the framework. The United Kingdom stressed the importance of quality finance and debt management. Switzerland, representing the Environmental Integrity Group, acknowledged the text’s imperfections but opposed rewriting it entirely.
Norway emphasized directing investment to developing nations, while the European Union focused on tailoring the finance goal to SIDS and LDCs.
The United States expressed disappointment, calling the draft “unbalanced.” They stressed the need for a multilayered global investment goal and urged new contributors to increase climate finance, particularly those already providing significant support.
Looking Ahead
The deliberations on climate finance at COP29 are still ongoing. The G77’s rejection of the framework poses challenges. However, discussions are far from over. It remains unclear how negotiations will evolve.
A new version of the framework may address concerns raised by developing nations. Climate finance is a crucial issue at COP29. How this debate unfolds will shape the future of global climate action.