Rich vs developing feud at climate financing talks

Major differences are emerging again between rich and developing countries on who should contribute to the new quantified goal on climate finance, according to the Third World Network, an independent non-profit that is tracking the negotiations at Cartagena in Columbia.
The primary agenda of the annual UN climate meeting to be held in Baku in Azerbaijan in November would be to negotiate a new goal for climate finance, which currently has a floor of a minimum of $100 billion every year after 2025, that is expected to help developing countries transition to a low-carbon future.
In an Ad Hoc Work Programme (AHWP) of the United Nations Framework Convention on Climate Change (UNFCCC), held in Cartagena in Colombia from April 23 to 26, the US is reported to have said the New Collective Quantified Goal (NCQG) is “voluntary” for those that “choose to pay”, referring to Article 9.3 of the 2015 Paris climate pact that deals with climate finance.
India, speaking for the like-minded developing countries (LMDCs), said the goal must be in accordance with the principles and provisions of the convention and the Paris Agreement, which is equity and common but differentiated responsibilities and Article 9 of the pact. Article 9 stipulates that wealthy nations shall provide financial resources to assist developing countries to both mitigate and adapt to the impacts of climate crisis.
This translates into the goal being delivered by wealthy nations to developing countries in line with the latter’s existing and evolving needs, mainly because the developed world is historically responsible for most of the emissions that has caused the climate crisis, India argued. Arabian and African countries supported the LMDC grouping in the meeting.
These arguments were captured by the Third World Network, which tracked the meeting in Colombia, and also the webcast provided by UNFCCC.
These differences are expected to blow up at the Baku summit. Developed countries are now of the view that the contributor base should be determined based on evolving capabilities of nations with the capacity to pay, the level of emissions, and the nations’ GDP. They also said there has to be a discussion on who would receive the money.
When the US argued that contribution to the NCQG was entirely voluntary, the Arabic nations clarified that the $100 billion goal was also in the context of Article 9.3 and there was unequivocal consensus that it applied to developed countries.
India on behalf of LMDC said it did not agree with any feature relating to “domestic resources of developing countries” in the discussion. The NCQG is about how developed countries will provide support to developing countries, it said. India also said that “it makes no sense for the NCQG to be outcome-based”. The only outcome that can be traced as part of the goal was whether the quantum committed by developed countries was commensurate to the needs of developing countries, it argued.
References to the contributor base and differentiation across beneficiaries were unacceptable and these were diversionary tactics, India said. “The NCQG should provide a clear agreement on burden-sharing among developed countries to establish their ‘fair share’ of their collective obligation to provide climate finance, which allows predictability, transparency, and accountability,” it said.
India said the group had already proposed an amount of over $1 trillion per year based on the current needs, which can be updated based on the availability of new needs.
“While the US made a statement that generated a lot of buzz, the same article (Article 9) has been used by developing countries to suggest the exact opposite position,” said Sehr Raheja, programme officer, climate change at the Centre for Science and Environment, an advocacy group. “India for the LMDCs stressed that a renegotiation of what Article 9 means is not a part of the NCQG mandate.”
“This seems to be a fair and necessary position for them to take, since discussions on the text of the Paris Agreement itself stand to distract from the various elements of the goal that need detailed consideration to arrive at an equitable outcome in Baku this year,” she added. “Suggesting that the new finance goal is voluntary also signals blatant disregard for the lack of confidence among developing countries based on the $ 100 billion experience, which they have articulated throughout discussions.”
Raheja was referring to a commitment made by the developed countries at the 2009 Copenhagen climate summit that by 2020 and lasting through 2025, they would provide $100 billion annually to developing nations to help them withstand the effects of climate change and mitigate emissions. This did not materialise, causing developing nations to question the promises made by wealthy countries.
There has been a recent push from developed countries to include emerging economies in the donor base for the NCQG for the post 2025 period, and to increase the donor base for the adaptation fund, HT reported on November 11, 2022. At the UN climate summit held that year in Egypt, the US and the European Union were looking to expand the donor base to include high-income and emerging economies, including China and India, ignoring the Paris Agreement’s provision that climate finance will flow from developed to developing nations.
These differences came to a boil at transitional committee meetings on the Loss and Damage Fund in Egypt’s Aswan last year. The US wanted to withdraw support because it insisted that contributions to the fund were voluntary. Developing countries said the funding arrangements are weak and take away from the historical responsibility of rich nations.
The first board meeting of the Loss and Damage Fund, hosted by the World Bank, concluded last week, but a lot needs to be done on flow and scale of resources, observers said.