Money to stop climate change was high on the agenda of all such conferences. But why is it now becoming the most important and perhaps the only topic that everyone without exception cares about at the COP? And what does this combination of letters – NCQG – really stand for? Just a technocratic buzzword, of which there are so many in the climate change debate, or a commitment? Another smokescreen hiding the lack of real action, or the promise of a brighter future? This conference will set the direction for the world to follow in the next decade, and the strong position of the European Union may determine whether everything ends up being nothing more than empty phrases.
Billions for the future
The calendars for this year, 2024, are counting down to the final weeks of the year, so tensions are building for NCQG. The new year 2025 is approaching, which draws the line in climate finance negotiations. 100 billion is still valid this year and next year. A goal of raising $100,000 per year for climate action based on the needs and priorities of developing countries, but what’s next? Emptiness. If no one agrees on a new goal, the parties will not be bound by any obligations, unless “out of inertia” they are still tied to 100 billion.
This commitment was originally set in 2009 with the aim of achieving by 2020 mobilize 100 billion annually US dollars. It was later extended until 2025. Apparently, thirteen (!) years after setting the goal, last year, it was finally calculated that the rich North has allocated (with certain reservations) at least 116 billion for climate matters, thus reaching and exceeding the “magical” 100,000,000,000 threshold for the first time .
For comparison: In next year’s budget, the state of Lithuania intends to collect about 15 billion in taxes. euros; considering the small difference between the euro and the dollar exchange rate, it can be said that to solve the global problem, the delegates representing almost 200 countries agreed to collect approximately six Lithuanian budgets.
Back in 2015 Under the Paris Agreement, countries agreed to set a new collective quantitative climate change financing target that will take effect from 2025, starting at $100 billion. USD per year. This symbolic border is perceived as a complete necessity, as a certain negotiating “floor”. India and some other countries talk about the need to mobilize a trillion, sometimes there are even calls to mobilize 3-5 trillion dollars.
The search for climate justice and moral responsibility
We hear more and more talk of “just transition” and “climate justice” before the billions rain down. But what is it? The bottom line is simple: wealthier countries that have built up their wealth through centuries of resource abuse have a moral obligation today to support those countries that have contributed the least to climate change but are suffering its worst effects.
The European Economic and Social Committee (EESC) emphasizes that funding for the fight against climate change must be allocated not only to reduce carbon dioxide emissions, but also to help the most vulnerable to counter the inevitable consequences of the climate crisis. Representing Lithuania in this committee, I won an honorable appointment: to create a report (opinion) of the committee on climate finance, primarily focusing on the NCQG negotiations.
The new collective goal for climate finance aims to ensure that funding is targeted at those most in need. The EESC therefore supports the idea that this funding must not only be sufficient, but also accessible and transparent.
It must be free of bureaucratic obstacles so that the money really reaches local communities. In this context, “climate justice” means targeting financial support to communities and countries that, although they did not cause climate change, suffer its effects much more than others.
It must be emphasized that this is not charity or grace. It is a responsibility and recognition that those countries that have profited from the exploitation of the planet’s resources in the past must invest in the future today. Vulnerable countries will need hundreds of billions of dollars a year to adapt to climate change, but the reality is that today’s support is less than 5 percent. required level.
Money is still pouring into the fossil fuel “cauldron”
Such a failed bank from the boldest Lithuanian business period a few decades ago used to beckon: “Need money?” There is money!”. The money now, just like in the roaring 90s, is… in the oil business!
After all, the fossil fuel industry is still supported by trillions, even the exploration and development of new deposits. According to International Monetary Fund specialists, the world spends trillions of dollars subsidizing the most polluting source of energy – fossil fuels. The issue of fossil fuel subsidies must be addressed within the framework of COP29. Because if not here and now, then when and where? While the oil and gas people are feasting, the rest of the world can’t afford to invest in renewable resources and adaptation. The issue of this paradox must be resolved and immediately. The EESC is clearly in favor of a gradual but inevitable phase-out of fossil fuel subsidies, with mechanisms in place to protect the most vulnerable from price shocks. (“Climate Reporters” recently for the Lithuanian audience). presented one such planned European mechanism – the Social Climate Fund).
Proposes to use special bonds
However, mere political declarations and commitments are worthless if they are not implemented. Lending mechanisms and risk mitigation strategies must be adapted to the real challenges facing developing countries. Thus, in the aforementioned opinion “Financing the fight against climate change. A new roadmap for achieving ambitious climate ambitions and the Sustainable Development Goals (SDGs)’ The EESC calls for the creation of hybrid financing structures to attract private investment while ensuring sustainability.
And to the developing countries that are deeply indebted, we must offer a clear and tangible debt reduction program, in the implementation of which rich large countries and international organizations would take responsibility and take real steps to save vulnerable countries. Such a debt refinancing scheme, using SDG-linked bonds, would help both stop the debt spiral and invest more in future stability.
Today, the challenge of the COP29 conference is not new slogans, but real efforts to ensure climate justice. Money is just a tool, because everything is determined by the principle of cooperation and the vision (or, unfortunately, the lack thereof) that unites the states and people of the heated world.
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**Interview with Dr. Laura Chiriboga, Climate Policy Expert, on Climate Finance at COP29**
**Interviewer:** Thank you for joining us today, Dr. Chiriboga. As we approach COP29, it seems climate finance, particularly the commitment to the NCQG, has taken center stage. Can you explain to us what NCQG stands for and why it’s so significant this year?
**Dr. Chiriboga:** Thank you for having me. NCQG stands for the New Collective Quantified Goal on climate finance. This goal is crucial because it represents a commitment to mobilizing funds aimed at climate action, specifically tailored to meet the needs of developing countries. The emphasis on NCQG highlights the global recognition that substantial financial support is needed to address the impacts of climate change effectively.
**Interviewer:** Many are questioning whether this commitment will translate into real action or if it’s merely another technocratic buzzword. What are your thoughts?
**Dr. Chiriboga:** That is a legitimate concern. In the past, we have seen many pledges that have not been followed by substantial action. However, the urgency of the climate crisis necessitates that we move beyond rhetoric. This time, with the EU’s strong position at COP29, there is potential for meaningful progress. If the discussions lead to actionable commitments, we could see real advancements in funding for climate action.
**Interviewer:** The target of mobilizing $100 billion annually has been established, but discussions for a new goal starting in 2025 remain unresolved. What happens if no agreement is reached?
**Dr. Chiriboga:** If no agreement is reached, it would be a significant setback. The $100 billion target may become ineffective without a new collective goal. It would risk leaving developing countries vulnerable, as they face the brunt of climate change. If inertia keeps parties tied to this old target without future commitments, it could lead to stagnation in climate finance.
**Interviewer:** You mentioned “climate justice” and the moral responsibility of wealthier nations to support developing countries. Could you elaborate on how this ties into the financial discussions at COP29?
**Dr. Chiriboga:** Absolutely. Climate justice is about recognizing that wealthy countries have historically contributed the most to climate change, yet the most vulnerable nations—those with the least resources—are suffering the most. It’s not just about financial transactions; it’s about accountability and ethical considerations. The expectation is that the funding from wealthier nations should not only target emission reductions but also support the resilience of those most impacted by climate change.
**Interviewer:** With the ongoing financial flow to fossil fuel industries, do you believe that COP29 will address subsidies effectively?
**Dr. Chiriboga:** This is indeed a critical issue. The fossil fuel industry continues to receive vast subsidies, which undermines efforts to transition to renewable energy. At COP29, it will be vital to challenge this paradox and push for discussions around phasing out these subsidies. The EESC, for instance, advocates for a managed transition that protects the most vulnerable communities from economic shocks as we shift away from fossil fuels.
**Interviewer:** Lastly, do you think the use of special bonds, as mentioned in recent discussions, could be a viable solution for financing climate initiatives in developing countries?
**Dr. Chiriboga:** Yes, special bonds could be a key instrument in mobilizing the necessary funds. They can provide accessible financing options tailored to the specific challenges of developing nations. It’s about creating innovative solutions and adapting financial instruments to meet the pressing needs of our time. However, implementation will be crucial; otherwise, even the best financial products will remain ineffective.
**Interviewer:** Thank you, Dr. Chiriboga. Your insights into the complexities of climate finance are invaluable as we approach this critical conference.
**Dr. Chiriboga:** Thank you for having me. It’s essential that we keep the dialogue open as we strive towards a sustainable future.