On the third day of COP29 in Baku, discussions focused on developing a robust financial framework to advance global climate action. Delegates and leaders concentrated on establishing a new financial target, known as the New Collective Quantified Goal (NCQG), which aims to replace the previous $100 billion annual climate finance goal with a more ambitious and realistic framework. As climate impacts intensify, many nations, especially those most vulnerable to climate change, are advocating for substantial increases in funding to address loss, damage, and the immediate needs of adaptation.
Reassessing Climate Finance with the NCQG Initiative
The NCQG was central to today’s negotiations, as nations pushed to create a financial mechanism that not only meets current climate challenges but also prepares for future ones. Developing nations argued that the original $100 billion target, which often fell short, no longer addresses the reality of escalating climate impacts. Many representatives urged wealthier nations to step up, emphasising that the new goal should secure far more significant and sustained support.
Expanding the Loss and Damage Fund
Talks today also highlighted the importance of the Loss and Damage Fund, which was first established at COP28 with an initial pledge of $700 million. Given the scale of recent climate disasters, delegates from countries facing severe climate impacts argued that this amount was far from sufficient, suggesting that hundreds of billions of dollars will be required annually. To this end, the COP29 Presidency is actively working towards fully operationalising the fund. Yesterday’s signing of crucial agreements between the Fund Board, the World Bank, and the Philippines means the Fund is now prepared to begin distributing support in 2025.
A high-level annual dialogue was also launched to enhance coordination for loss and damage financing, bringing together diverse stakeholders from within and outside the UN climate framework. Sweden, demonstrating immediate support, pledged approximately $19 million, subject to approval.
Climate Finance Commitments from Multilateral Development Banks
A significant announcement came from a coalition of leading multilateral development banks (MDBs), which estimated their annual climate finance contributions to reach $170 billion by 2030. This includes $120 billion for low- and middle-income countries, with $42 billion earmarked specifically for adaptation projects. The MDBs aim to mobilise an additional $65 billion from private sector financing, helping bridge the funding gap for countries that are particularly vulnerable to climate risks. The announcement aligns with the COP29 Presidency’s priority of providing concrete financial solutions to support urgent climate action.
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Day Three of COP29 saw leaders rallying around enhanced climate finance mechanisms, pressing for the NCQG to fill the gaps left by previous commitments. As the world’s most vulnerable countries call for greater support, COP29’s success hinges on securing funding that is not only ambitious but also actionable. With initiatives like the expanded Loss and Damage Fund gaining momentum, COP29 is paving the way for meaningful, sustainable solutions to support the world’s fight against climate change.
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