India has stated on behalf of developing countries that climate finance at market rates will put further financial pressure on these countries.
“Going ahead, if ambitious climate targets have to be achieved, these need to be backed by intentions reflected by ambitious, appropriate, and reasonable access to financial resources by developing countries,” Union environment minister Bhupender Yadav said on Wednesday at the Like-Minded Developing Countries (LMDC) ministerial dialogue on a new collective quantified goal (NCQG) on climate finance.
Yadav said the Standing Committee on Finance under United Nations Framework Convention on Climate Change has estimated that resources in the range of $ 6 trillion to $11 trillion are required till 2030 to meet the targets developing countries have set in their Nationally Determined Contributions (NDCs).
He added climate actions to meet the NDC target require financial, technological, and capacity-building support from developed countries. “The ambitious goal set down by the developing countries requires substantive enhancement in climate finance from the floor of $100 billion per year.”
Yadav said the mobilisation of the resources needs to be led by the developed countries and should be long-term, concessional, and climate-specific with equitable allocation between adaptation and mitigation projects. “The commitment of $100 billion made in 2009 by developed countries was not only minuscule given the scale of needs, but has also not been achieved yet.”
He said the needs already determined can guide the mobilisation and provisioning of resources by developed countries to developing countries. Yadav called it imperative to concentrate on the quantum and quality of resource mobilisation.
LMDC has made it clear the extent of public resources the developed countries bring in will play a critical role in determining the climate flows. Focus on private finance alone is discouraging, it added.
In a statement, LMDC said the previous Technical Expert Dialogues on the New Collective Quantified Goal under the Ad Hoc Work Programme presented an opportunity for the exchange of ideas. It called for a more structured and targeted approach to enable the successful fulfilment of the mandate before 2024.
“Discussions within the Technical Expert Dialogues in 2023 should focus mainly on the quantum, recognizing the urgency of such discussions for developing countries. That said a discussion on quality and other elements such as access and transparency is incredibly important,” the statement said. It added a structure must be set in place moving forward to ensure decisions on all these elements can be taken by 2024.
LMDC said it is also important to highlight in this context that access to finance at the market rate for climate action will lead to considerable stress on the finances of developing countries that the world cannot afford.
Former climate negotiator and ambassador Manjeev Singh Puri said finance for climate action by developing countries is a critical key in meeting global climate objectives. “With the goals set out in Copenhagen [2009] not having been met, it is imperative that new and, this time firm, climate financing goals are set and committed to by the developed countries,” he said in response to the statement.
The Sharm el-Sheikh Climate Change Conference has brought up the topic of loans as climate finance burdening impoverished countries (COP 27).
“The Global North borrows at interest rates of between one to 4%, the global south of 14%. And then we wonder why the just energy partnerships are not working,” said Barbados Prime Minister Mia Amor Mottley at the Sharm El-Sheikh Climate Implementation Summit opening ceremony.