What is the New Collective Quantified Goal on Climate Finance?
The New Collective Quantified Goal on Climate Finance (NCQG) is a new global climate finance goal that will be set prior to 2025 by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA). This goal will supersede the $100 USD billion target agreed in 2009 at COP15 for mitigation and adaptation and should be informed by the climate action needs and priorities of developing countries.
What has the NCQG got to do with Loss and Damage?
With the Loss and Damage Fund needing at least $400 billion USD a year to meet the needs of developing countries and only $700 million USD pledged so far, the NCQG must include a Loss and Damage subgoal to ensure that the Fund is regularly filled to the scale of those needs.
What will happen on the NCQG in 2024?
The process of developing the NCQG is set to conclude at the end of 2024. To ensure that this happens, Parties decided at COP28 to transition to a mode of work to enable the development of a draft negotiating text for consideration at CMA6 during COP29. The structure of this work will be laid out in an NCQG work plan which is due to be prepared and published by UNFCCC by March 2024 taking into account submissions made by Parties by the 12th of February.
What is the structure of the NCQG Work Plan?
We already know from the COP28 decision that at least three meetings under the ad hoc work programme (AHWP) of the NCQG will take place this year, back-to-back with at least three technical expert dialogues (TEDs). The first AHWP meeting and TED (the 9th TED) should take place before June 2024. The second AHWP meeting and TED10 in conjunction with the Bonn Climate Conference (60th meeting of the Subsidiary Bodies). Whilst the third AHWP meeting and TED11 is mandated to occur well before COP29/CMA6. There will also be a 2024 high-level ministerial dialogue on the NCQG on climate finance well before the CMA6.
How many Parties have submitted?
As of the 27th of February, 17 Parties and groups have made submissions (see all submissions here by searching “workplan” and tagging “2024”, individual submissions are also linked here after). They include: Switzerland on behalf of the Environmental Integrity Group (EIG), The European Union, Japan, The USA, The UK, India, Malawi on behalf of Least Developed Countries Group (LDC), Saudi Arabia on behalf of Arab Group, Australia, India on behalf of Like Minded Developing Country (LMDC) group, Samoa on behalf of the Alliance of Small Island States (AOSIS), Norway, Canada, The Philippines, Zambia on behalf of the African Group of Negotiators (AGN), Brazil on behalf of Argentina, Brazil, Paraguay and Uruguay (the SUR Group), and Honduras on behalf of the Independent Alliance of Latin America and the Caribbean (AILAC). The co-chairs of the ad hoc work programme have also shared their reflections on the organisation of the work plan for 2024 which can be seen here.
What can we learn from the submissions about how Parties see Loss and Damage included in the NCQG work plan?
Those who mention Loss and Damage
Only four submissions explicitly mention Loss and Damage, these come from the AGN, AOSIS, SUR and AILAC. In their submission, the AGN notes that “ the purpose of the new goal is to contribute to the accelerated delivery of ambitious actions and pledges of developing countries’ mitigation, adaptation, addressing loss and damage” and highlights the importance “ensuring that the needs and priorities of developing countries form the basis of setting the NCQG.” The Sur Group also stresses this point, making it clear that NCQG targets “must address the evolving needs and priorities of all developing countries for, at least, mitigation, adaptation, and loss and damage response, while being periodically reviewed, flexible, and including quantitative and qualitative aspects.” Whereas AILAC gets more concrete. Having highlighted that the NCQG is being set at a time “where developing countries are suffering the disproportionate impacts of climate change, bearing the increasing cost of adaptation and loss and damage while facing limited fiscal space and high costs of capital”, AILAC then proposes that Loss and Damage is included as a thematic area in each of the TEDs. In doing so AILAC also reiterates that “the needs and priorities of developing countries for climate finance manifest different dynamics when addressing mitigation, adaptation, and loss and damage” and that continuing to focus on these three thematic areas of climate action could help to address “current imbalances between them, allocating finance where most needed and tackling the evolving needs and priorities of developing countries among these areas.” Whereas, AOSIS includes Loss and Damage in a proposal for an indicative structure for a first order draft of a “substantive framework for the draft negotiation text that captures progress to date without prejudice to the final structure of the NCQG”. Where, under the heading “Substantive Scope: Sub-goals aligned to Article 9, including in particular Article 9, paragraph 4 to ensure that'' AOSIS includes: “developing countries are able to address loss and damage associated with the adverse effects of climate change to the worst-case projected temperature scenario.” In each case, the AGN, AOSIS, SUR and AILAC suggest that the NCQG must therefore include Loss and Damage to meet the needs of developing countries.
Those that don’t mention Loss and Damage
Those that don’t mention Loss and Damage fall into several groups: Those that mention mitigation and adaptation explicitly; those that don’t mention mitigation, adaptation or loss and damage; and those that refer how the NCQG will reflect Article 9 of the Paris Agreement.
Those that mention mitigation and adaptation include The European Union, The UK, India, The LMDC group, and The Philippines, whilst the USA just mentions mitigation. Whereas those that refer to how the NCQG will reflect Article 9 of the Paris Agreement include Australia, Norway and The Arab Group. Whilst those that mention neither mitigation, adaptation nor Loss and Damage include the LDC group, Japan and the EIG group. However, it is worth mentioning that these submissions focus only on how the meetings will work and not on what should be discussed.
What does this tell us? Submissions from developed countries that just mention adaptation and/or mitigation or refer to reflecting Article 9, suggest that they do not see the NCQG covering loss and damage and therefore they do not want to see it included in the work plan for 2024. A position backed up by interventions in previous TEDs and negotiations.
Whereas, past precedence suggests that submissions from developing countries that do not mention loss and damage or refer to how the NCQG will reflect Article 9 suggest that mitigation and adaptation are already significantly underfunded and that these Parties and groups fear that a loss and damage sub-goal may be taking away from mitigation and adaptation finance.
What other issues or themes emerge from the submissions?
Other key issues that appear in the submissions include “discussions” on whether to expand the contributors base for the NCQG to include developing countries, the restriction of NCQG recipients, Article 2.1 (c) of the Paris Agreement, equity and common but differentiated responsibilities and respective capabilities (CBDR-RC) and participation in the TEDs and AHWP meetings.
Expansion of the contributor base
Parties and Groups that mention “discussing” the expansion of the contributor base include The European Union, Japan, USA, and Australia. Whilst those pushing back on the expansion of the contributor base include the Arab Group who reiterates that developed countries have an obligation to provide finance, and AOSIS who indicates that sources of funding must be aligned with Article 9 of the Paris Agreement (i.e. from developed countries). The above indicates that a good number of developed countries seek to expand the contributor base for climate finance to include Gulf States and large developing economies such as China as a way to reduce their finance obligations.
The restriction of NCQG recipients
Only the US mentions “discussing” a restriction of NCQG recipients, and again this relates to attempting to reduce finance obligations, in this case by limiting the number of recipients of funds from the NCQG.
Article 2.1(c)
Parties and Groups that mention “discussing” Article 2.1(c) are for the most part developed countries including The European Union, Japan, The USA, Australia, and Norway. Whilst the Arab Group makes it clear that Article 2.1 should not be used to try to identify new responsibilities, and The Philippines mentions Article 2.1(c) in the context of its relationship with Article 9 and not the NCQG. The mandate to adopt NCQG makes clear that the new goal must take into account developing countries’ needs and priorities. Throughout the NCQG process to date, developing countries have reiterated their concern that the discussions that developed countries want to have on Article 2.1(c) could shift the conversation away from a focus on developing country needs and priorities towards shifts to domestic policy and finance flows and/or see the inclusion of conditionalities or barriers to accessing financial support. In addition, developed countries have suggested an agenda item focused on Article 2.1 (c), as well as a dedicated work program within the UNFCCC. Developing countries, however, expressed scepticism about this approach, on the basis that a focus on 2.1(c) could “lead to developed countries shying away from their commitments and obligations” to provide financial support to vulnerable nations. For a full exploration of article 2.1 (c) and what its potential implications are for the NCQG, see this excellent article from the World Resources Institute.
Equity and CBDR-RC
The Parties and Groups that mention CBDR-RC and Equity are all developing countries, including India, The LMDC group, ABU, The Arab Group and the AGN. In each case, CBDR-RC and Equity are mentioned to reinforce that it is developed countries who have responsibilities to provide climate finance and that they must take the lead mobilising finance.
Participation
On Participation, there are a number of Parties and groups that call for civil society participation and to ensure transparency by doing things such as webcasting the meetings. The EIG group calls for civil society participation in the TEDs and requests that the co-chairs schedule sufficient time so observers will be able to speak during the AHWP meetings. Whilst the EU only calls for civil society participation in the TEDs. The LDC group asks for the TEDs and AHWP meetings to be webcast and hybrid, whilst AOSIS highlights that funding should be included in the work plan for at least one representative from each eligible developing country Party to all TEDs and AHWP meetings and that “virtual participation does not afford Parties an equal opportunity for engagement when compared to in-person participation”. Canada also highlights the possibility for virtual participation and calls for co-chairs to increase the participation of experts and actors underrepresented in previous dialogues including Indigenous Peoples. Reiterating that in Canada’s view, the AHWP programme “must be accessible to a wide variety of stakeholders and partners, including Indigenous Peoples, as well as respectful of human rights and the rights of Indigenous Peoples”. Canada also encourages co-chairs and participants to “account for gender equality and equity considerations throughout the deliberation process”.
How can we ensure that Loss and Damage cemented in the NCQG work plan?
It is clear that Parties and Groups must agree to include Loss and Damage in the NCQG work plan for 2024 based upon the clear requests from the AGN, AOSIS, SUR and AILAC, that it must be a thematic area within each TED and AHWP meeting and be reflected in the draft text. In our brief on the role of the NCQG on filling the Loss and Damage Fund we also highlighted that follow should be included in the 2024 work plan:
• At least one of the written public consultations on the NCQG in 2024 should be on how best to include Loss and Damage in the NCQG.
• At least one additional hybrid dialogue should be held in 2024, whereby NCQG negotiators, Loss and Damage negotiators, Civil Society, communities, other stakeholders and advisors come together to discuss how best to include Loss and Damage in the NCQG.
What do we do now to make sure L&D is included as a subgoal in the NCQG?
As suggested by AILAC’s proposal, the answer is to make every TED and AHWP meeting about Loss and Damage even if it is not on the agenda. To do so Parties, Groups and civil society will need to raise Loss and Damage in their statements and submissions in a way that makes it clear that a NCQG without a Loss and Damage sub-goal cannot meet the needs of developing countries.
What's next for the NCQG?
The work plan is due to be published by March 2024. However, with submissions coming in as late as the 23rd of February, we can anticipate that the program may be released later. Stay tuned to the announcement section of the UNFCCC’s NCQG webpage for the release and we look forward to analysing the program when it's been released.
The L&DC’s Loss and Damage Finance Project is working to address two key issues. The first is to be able to mobilise finance at the scale of the Loss and Damage needs of developing countries. The second is to provide thought leadership on how finance should be channelled through the Loss and Damage Fund and Funding arrangements operationalised at COP28 to developing countries and the people and communities within them. Find out about their work here.
