- New Collective Quantified Goal on Climate Finance (NCQG) was proposed in COP21 for setting post-2025 climate finance goal (new goal).
- In 2009 parties to UNFCCC had decided to mobilise $100 billion annually by 2020 which was subsequently extended to 2025.
- However, this target is yet to be achieved reflecting significant shortfalls in it.
- NCQG is proposed to raise the floor on climate finance above the current $100 billion annual target while also addressing key shortcomings in the current climate financing mechanism by:
- setting both qualified and quantified targets in line with needs;
- agreeing suitable modalities for financing mitigation, adaptation and loss and damage; and
- building deeper levels of accountability and transparency into the goal.
- Issues associated with the target of mobilising $100 billion annually
- Distributional imbalance: Between 2011 and 2020, 80% of global climate finance was focused in OECD countries and the East Asia Pacific region, revealing a significant geographical concentration of funds.
- Overemphasis on financing of mitigation: Adaptation made up only about 8% of the total climate financing in 2019-2020)
- Nature of Climate Finance: Nearly 94% of existing climate investment is either through either debt or equity (return seeking).
Paris Agreement (2015) on Climate FinancingArticle 9 of the Paris Agreement stipulates that developed country Parties shall provide financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation of their existing obligations under the Convention. |