Climate Finance

At a recent COP29 meeting in Baku, Azerbaijan, India emphasised the role of climate finance in addressing climate change.

India highlighted that climate finance is a “unidirectional provision” from developed countries to developing countries, as stated under the Paris agreement. It urged the developed countries to not see this as an “investment goal.”.
With respect to Like-Minded Developing Countries (LMDCs), India demanded at least $1.3 trillion annually in climate finance until 2030.
The negotiations in the recent meeting at Baku were focused on setting a New Collective Quantified Goal (NCQG). It replaced the previous $100 billion annual goal for 2020-2025, which was achieved late in 2022.
The new goal is expected to be operational by 2025 and would aim to address the increased financial needs of developing nations.

It is a type of funding acquired from local, national, or transnational sources, amongst public, private, and alternative financial channels, to enhance actions addressing climate change by supporting both mitigation and adaptation endeavours.
Developing countries are more susceptible to the impacts of climate change than developed countries.
Hence, the idea of channelling financial aid from developed countries to developing countries was advocated by the UNFCCC, the Kyoto Protocol, and the Paris Agreement.
This principle aligns with the concept of “common but differentiated responsibility and respective capabilities” (CBDR).
COP26: Fresh commitments were made to provide financial support for developing nations in achieving global goals for adapting to climate change effects.

The Paris Agreement was adopted in 2015 by replacing the Kyoto Protocol, which was an earlier agreement to deal with climate change.
It is also known as the Conference of Parties 21, or COP 21.
It is a global treaty that was agreed upon by almost 200 countries to reduce greenhouse gas (GHG) emissions.
It seeks to limit global warming to well below 2°C, preferably to 1.5°C, compared to pre-industry levels.
The Paris Agreement works on a 5-year cycle of increasingly ambitious climate action carried out by countries.
In 2020, countries had submitted their plans for climate action known as nationally determined contributions (NDCs).
Tracking Progress: The Paris Agreement introduced an Enhanced Transparency Framework (ETF), through which, starting in 2024, countries will transparently report on their climate actions, including mitigation, adaptation measures, and support provided or received.
- The ETF also includes international procedures to review these submitted reports. This collected information will contribute to the Global Stocktake, which assesses the collective progress towards achieving long-term climate goals.

Believers IAS Academy