India has described COP29 in Baku as a historic opportunity to empower the Global South. The country believes that the summit can help the most vulnerable nations take ambitious climate action and adapt to severe climate impacts.
India’s Call for $1.3 Trillion in Annual Climate Finance
At a High-Level Ministerial on Climate Finance, India’s lead negotiator, Naresh Pal Gangwar, emphasized the urgent need for financial commitments. He urged developed nations to provide at least $1.3 trillion annually until 2030. This finance should be in the form of grants, concessional finance, and non-debt-inducing support.
Gangwar stressed that climate finance must cater to the evolving needs of developing countries without imposing growth-inhibiting conditions.
He said that extreme weather events are increasingly frequent and intense, affecting people across the developing world. Therefore, the ambition for climate action must be raised, and finance commitments should match this urgency.
Also read: COP29: Developing Countries Need $1 Trillion per Year for Climate Action
Historic COP29 and India’s Concerns
Gangwar pointed out that COP29 is crucial in shaping the future of global climate efforts. He noted that any new financial goals, such as New Collective Quantified Goal (NCQG), should adhere strictly to the provisions of the Paris Agreement. India argued that the responsibility for mobilizing and providing climate finance lies with developed countries, not developing nations.
He also emphasized that there would be no room for renegotiating the Paris Agreement. India’s concerns echo long-standing frustrations with developed countries’ failure to meet their existing financial and technological commitments.
NCQG and the $100 Billion Goal
The $100 billion per year financial goal, committed in 2009, was set to be met by 2025. However, the progress towards this target has been slow. India stressed that this delay underscores the urgency of climate finance. The country remains hopeful that developed nations will realize their responsibility to meet these goals and push for more ambitious climate action.
NCQG, a proposed new finance target to replace the $100 billion goal, is a key issue at COP29. The African Group of Negotiators (AGN) supported India’s position, stressing that the financial obligations of developed nations remain binding.
AGN argued that the $1.3 trillion is crucial for climate adaptation, resilience, and emissions reduction in Africa and other developing regions.
Also read: COP29: Leading Energy Companies Commit $500 Million to Enhance Global Energy Access
Challenges with Private Sector Mobilization
Oil Change International released an analysis pointing out that private sector mobilization may not be effective. The analysis noted that, while global clean energy investments have increased, they have been concentrated in OECD countries and China. Low-income countries, which represent a significant portion of the global population, received only a small fraction of this investment.
The primary solution put forward by Global North countries is to use a small amount of subsidized public finance to attract private investments. They expect that for every dollar of concessional public finance, $5 to $7 will flow into private financing for energy projects in the Global South.
However, the analysis shows that this assumption does not hold true in practice. In reality, every dollar of concessional public finance only attracts 85 cents in private finance. In low-income countries, the leverage drops further to just 69 cents.
This shortfall means that relying on private finance mobilization may not meet the funding needs for a just energy transition.