Recently, the global community is gearing up for the 29th Conference of the Parties (COP29) in Baku, Azerbaijan, where climate finance is expected to take centre stage. The conference aims to address the pressing financial needs of developing countries, which are disproportionately affected by climate change despite contributing minimally to global emissions. With the backdrop of ongoing climate crises, the need for a robust financial framework to support climate action has never been more urgent.
About Climate Finance
Climate finance refers to the funding aimed at supporting efforts to mitigate and adapt to climate change. It encompasses a variety of sources, including public, private, and alternative financing, and is crucial for developing countries that lack the financial resources to address climate-related challenges. The Organisation for Economic Co-operation and Development (OECD) plays a vital role by tracking these financial flows, although criticisms have emerged regarding the accuracy and transparency of their reports.
The Role of Developed Countries
Historically, developed nations have been the largest contributors to greenhouse gas emissions, accounting for 57% of cumulative emissions since 1850. This disproportionate contribution marks the ethical responsibility of developed countries to support developing nations in their climate efforts. The 2009 Copenhagen Accord committed developed countries to provide $100 billion annually in climate finance by 2020, a promise that is now being reassessed for the post-2025 period.
Challenges Faced by Developing Nations
Developing countries encounter unique challenges in addressing climate change. Many of these nations rely heavily on agriculture, which is highly susceptible to climate variability. Additionally, they face competing developmental needs, making it difficult to prioritise climate action. The International Energy Agency (IEA) reported that 675 million people in developing nations lacked access to electricity in 2021, underscoring the need for both energy access and climate resilience.
Investment Needs for India
India’s climate ambitions are , with targets to install 500 GW of non-fossil fuel energy capacity by 2030. Achieving these goals will require substantial investment, estimated at ₹16.8 lakh crore for renewable energy alone. Furthermore, the National Green Hydrogen Mission sets a target of ₹8 lakh crore for green hydrogen production, illustrating the scale of financial resources needed to transition towards a sustainable future.
New Collective Quantified Goal (NCQG)
At COP29, a key agenda item will be the establishment of the New Collective Quantified Goal (NCQG) for climate finance. This goal aims to ensure that financial flows to developing countries are not only commitments but actual disbursements that are new and additional. An independent expert group has projected that developing countries, excluding China, will require approximately $1 trillion in external finance by 2030, denoting the urgency of mobilising adequate resources.
Questions for UPSC:
- Discuss the significance of climate finance in the context of developing countries.
- Evaluate the commitments made by developed nations under the Copenhagen Accord.
- What are the major challenges faced by developing countries in addressing climate change?
- Assess India’s investment needs to meet its climate targets by 2030.
- Explain the concept of the New Collective Quantified Goal (NCQG) and its relevance at COP29.
