Climate finance: the key to progress 

As we outlined one week ago, it’s clear that the New Collective Quantified Goal (NCQG) on climate finance is the linchpin of this COP. Every conversation in the negotiation halls – whether about adaptation, mitigation, or loss and damage – circles back to finance. Developing countries are united in their call for a goal of at least $1.3 trillion annually in public, grant-based or highly concessional finance. They have also called for urgent action to improve access to funds, particularly in the context of debt crises many climate-vulnerable countries are facing, and to establish innovative sources of funding like levies on polluting activities. 

To help meet this goal, the Coalition for Solidarity Levies is advocating for levies on shipping, aviation, and fossil fuel extraction which could generate an estimated $350 billion annually—resources that could transform the landscape of climate finance. Speaking at the Alliance side event on the NCQG, one of the founding members of the Coalition, Kenya’s Climate Envoy Ali Mohamed said, “The only way to unlock the finance needed is through finding new sources of finance”. 

Unfortunately, financial pledges so far have fallen alarmingly short. For instance, the Adaptation Fund has secured only $61 million of its $300 million target for this year, and the newly created Fund for Responding to Loss and Damage (FRLD) only received one new commitment of $18 million this week. These shortfalls highlight the urgency of ensuring that the NCQG includes ambitious, equity-driven subgoals for adaptation and loss and damage. 

Finance issues impacting on Adaptation and Loss and Damage progress 

Adaptation and Loss & Damage (L&D) remain essential pillars of climate action, yet both are constrained by the broader finance gridlock. On adaptation, negotiators are discussing recommendations for National Adaptation Plans (NAPs), as well as the development of indicators for the Global Goal on Adaptation (GGA). Finance is the main contentious issue in these discussions and might not be resolved in the absence of clarity on the NCQG.

The establishment of the Fund for Responding to Loss and Damage (FRLD) last year was a major milestone, and this year further moved the fund forward with the signing of the host country agreement with the Philippines, and the launch of the Annual High-Level Dialogue on complementarity and coherence. However, a fund is only operational if it’s financed, and with financial pledges of less than $800m from this year and last year, there’s a disconnect between rhetoric and action. 

Meanwhile, negotiations on L&D – on the progress of the Warsaw International Mechanism (WIM) and the Santiago Network for Loss and Damage, – started constructively, including broad agreement on the need for a L&D equivalent of the Adaptation Gap Report to better understand and quantify the financial needs to address climate-induced losses and damages. However, by the end of the week, persistent divisions led to a potential deferral of decisions to the Bonn sessions next year. This is disappointing news, as a strong outcome on the review of the WIM would have further solidified the critical role of L&D in climate action. 

Why finance cannot wait 

Finance is the linchpin of climate action. Without it, adaptation measures remain unfunded, the costs of losses and damages are borne by those who did not cause the climate crisis, and the necessary mitigation efforts falter. At the Alliance NCQG side event last week, Gloria Namakula, a youth activist from Uganda, brought the urgency of finance into sharp focus: 

“Most people in my village have never heard of climate change, let alone climate finance. If only the polluters who created this nightmare would invest in resources and education, we wouldn’t have to live this way. I beg you all to rise to this moment and choose equity over exploitation.” 

Igor Paunovic of UNCTAD echoed this sentiment, emphasizing that the current finance system perpetuates inequalities and exacerbates debt crises: “Climate finance can only be grants or highly concessional loans.” 

The stakes couldn’t be higher. Every day without action compounds the suffering of millions facing rising seas, failed crops, and intensifying disasters. Meanwhile, the financial cost of addressing these crises continues to grow. 

Crunch time at COP29 

The coming week will determine whether COP29 can deliver meaningful progress. Failing to do so could put the goals of the Paris Agreement beyond reach. Negotiators must prioritize equity and ambition in the NCQG, ensuring it is not only a number but a transformative framework that accelerates action on mitigation, adaptation, and loss and damage. This is the moment for countries to step up – to commit to the innovative solutions and bold funding mechanisms needed to meet the climate crisis head-on. We’ll continue to be here, observing, engaging, and advocating, and we’ll report back after COP29 concludes with reflections on whether the summit delivered on its promise.  For now, a more resilient future – backed by climate finance that is truly reflective of developing countries’ needs – remains within reach. 

Keep up to date with the Zurich Climate Resilience Alliance at COP29 by following us on LinkedIn and X.

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Freddy was the longest-lasting tropical cyclone ever recorded and it produced the most energy of any cyclone on record globally, but what’s more terrifying is the pattern of extreme weather patterns being experienced in Malawi.

Freddy followed on the heels of Cyclones Ana and Gombe in 2022 and the devastating Cyclone Idai in 2019. In addition, there have been numerous droughts, with some regions yo-yoing between drought and wind/flood damage from cyclones in the same season.

The impact of these extreme weather events is amplified by the fact that Malawi is primarily a rural society and rain-fed agriculture is the backbone of communities. Anything which affects crops has a significant impact on food security and livelihoods in a country where 80 per cent of the population is employed in agriculture.

I remember carrying out damage assessments in southern Malawi in the days after Cyclone Freddy tore through. It was distressing to find submerged fields which weeks previously had held a bumper growth of sorghum, almost ready to be harvested. Other fields of crops were flattened by the force of the floods – the crops washed away or destroyed. Some villages were cut off and were only accessible by canoe.

The scale of the devastation caused by these events is difficult to describe to people in Ireland, where the reality of climate change may not have struck home yet. But what should be clear is that Malawi – one of the poorest countries in the world, which produced just 0.04 per cent of the world’s carbon dioxide emissions last year – is bearing the brunt of a warming planet.

Concern Worldwide, in conjunction with the Malawi government and communities, is working to help communities adapt to this ominous challenge. This includes the roll-out of climate-smart agriculture programmes (using both climate-resilient seeds and farming techniques), the use of nature-based solutions such as afforestation to help reduce the impact of floods, and the development of early warning systems. But this work needs to be funded and Malawi is one of the world’s poorest countries.

There should be a significant public, grant-based funding component to allow the money to flow to people exposed to climate impacts.

The people of Malawi and many of the world’s poorer countries will pay close attention to outcomes of negotiations at COP29.

Dubbed the “finance Cop”, global leaders are due to agree a new global finance goal to cut greenhouse gas emissions, boost resilience, help communities adapt to the impacts of climate change and cover the costs of loss and damage. The New Collective Quantified Goal (NCGQ) will replace the existing $100bn (€94bn) annual goal that is due to end next year.

It’s vital that this goal must be fit for purpose and sets, within the wider mobilisation goal, a public finance provision target of at least $1trn per annum in grants and grant-equivalent terms. Wealthier countries have a clear obligation, under the Paris Agreement, to provide funding to address the challenges.

For this new goal to succeed, the new climate finance commitment must be sufficient to meet the needs of countries impacted by climate change. It must cover adaptation, mitigation, and loss and damage, and be accountable for delivery. Furthermore it must ensure quality and accessibility of finance.

There should be a significant public, grant-based funding component to allow the money to flow to people exposed to climate impacts. Anything less than this will condemn communities in Malawi and many other countries to an even greater struggle to grow sufficient food, sustain livelihoods and continue living in regions experiencing the escalating impact of climate change.

This article was originally published by the Irish Independent on 12th November 2024. You can view the original here.

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While copious solutions exist to mitigate, adapt and address loss and damage, the missing piece is finance. Only funding can unlock the urgently needed global climate action.

The upcoming 2024 UN Climate Conference (COP29) is tasked with forging an agreement to establish a new collective quantified goal (NCQG) to provide needed climate finance. This awkwardly named climate finance goal will likely set the ambition and parameters for climate action for at least the next decade. The stakes could not be higher.

According to the Intergovernmental Panel on Climate Change, limiting warming to around 1.5 degrees Celsius requires global greenhouse gas emissions to peak before 2025 and decrease by 43% by 2030 to prevent irrevocable damage.

The time for change is now. We can either see a robust agreement cementing the needed funding to meet Paris Agreement goals, thus averting a worsening crisis or miss this critical window and further erode any trust left in the multilateral process.

This agreement at this time

Climate finance is not about charity or generosity but responsibility and justice. It is based firmly on the principle of common but differentiated responsibilities and respective capabilities (enshrined in the Paris Agreement and UN Framework Convention on Climate Change) – those who contributed most to the climate crisis must bear the brunt of the solution.

Yet agreeing on this new financing target has proven difficult. If developed countries and the fossil fuel industry tackled climate change head-on four decades ago as its impacts became clear, the cost of confronting it today wouldn’t be as staggering – currently, around trillions of dollars.

Many developed countries believe private investment can cover the gap. However, return-seeking finance is inappropriate and unethical in many contexts – particularly for loss and damage, adaptation and less developed countries where the business model is unclear, untested or non-existent. Moreover, to date, private finance has not delivered.

Developed countries also point to multilateral development banks as a source but much of their funding is provided as loans, which could further imperil already highly indebted countries. Moreover, loans are unjust, as developing countries pay back more than they borrow to solve a problem they did not cause.

Currently, 69% of all climate finance is provided in loans, entrenching existing inequalities and exacerbating debt crises in climate-vulnerable poor countries. The NCQG requires core public grant funding – around $1 trillion annually – directed at developing countries in line with their evolving needs. This funding should be allocated across mitigation, adaptation and loss and damage to prevent the current imbalance, where most funds go towards mitigation.

Is $1 trillion a realistic and achievable number? Only if there are efforts to tap into so-called “innovative sources” of funding and to make polluters and profiteers pay. The money is out there:

• Amid rising inequality and declining taxes on the ultra-wealthy, there is growing interest, including at the Group of 20 (G20), in wealth or billionaire taxes that could raise up to $1.7 trillion annually.
• With energy profits soaring (over $120 billion for the five oil majors in 2023) and emissions targets slipping, interest is growing in windfall taxes and a fossil fuel levy that could yield $210 billion annually.

Other options are available but the goal must be reframed as non-negotiable and serious conversations must be had about generating new financing reserves.

The needs are so great, the responsibility so clear and the price of inaction so high, that developed countries cannot simply say they have no fiscal space. It’s time to stop promising and finding excuses and start to meet this existential moment head-on.

Many other issues remain regarding the NCQG, such as how to ensure accessibility to countries and communities in need of funding or that it supports programmes prioritizing gender and inclusivity. However, the amount of public finance provision remains the key sticking point and the political football.

Even at this late stage, only days before COP29 starts and despite the many proposals by developing countries, no developed country has so far put an actual number on the table.

Global imperative for climate finance

To achieve an NCQG reaching $1 trillion that can begin meeting the needs of developing countries, a systemic shift is needed. Such progress requires pressure at the political level from a high-ambition coalition driven by developing countries suffering most from climate change that can stand up to developed countries and reject attempts to shift responsibility.

This effort could echo that led by the Marshall Islands, which led to the 1.5-degree goal in Paris. Failing to deliver the necessary finance at COP29 would not only stall climate action but also leave vulnerable women, men and children in developing countries footing the bill. At the same time, polluters and profiteers continue to act with impunity.

Humanity cannot afford more empty promises and incremental targets. Countries that caused the climate crisis need to act seriously and boldly to ensure the Paris Agreement goals are reached while there is still time.

This article was originally published by the World Economic Forum on 5th November 2024. You can view the original here.

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The last few weeks alone have seen catastrophic floodings in the United States and Spain, devastating fires in the Amazon, and torrential rains displacing millions of people in South Asia. Climate change is not a future concern but a current reality – 2024 is expected to be the hottest year on record for the second year in a row. 

‘COP29 must be the stand-and-deliver COP, recognizing that climate finance is core business to save the global economy and billions of lives and livelihoods from rampaging climate impacts’ urged UNFCCC Executive Secretary Simon Stiell recently. 

Decision time on climate finance 

After three years of negotiations, now is the time to agree a fit-for-purpose goal on climate finance – the New Collective Quantified Goal (NCQG) to replace the $100 billion goal agreed in 2009. This is literally a once-in-a-decade opportunity to drive systemic change in climate finance, as what is agreed will inform climate action – or inaction – for years to come. 

To this end, the Alliance has set out key principles and asks to ensure the NCQG is robust, and truly delivers for developing countries.

1. The goal must agree a quantum of at least $1 trillion annually in public grant-based funding.

To have any hope of ‘keeping 1.5 alive’ and preventing climate catastrophe, climate action must radically scale up in the next decade – this can only be done through a quantum in the trillions to address mitigation, adaptation and loss and damage (L&D), aligning with the evolving needs of developing countries. 

2. The funding should be primarily grants 

Loans currently make up the lion’s share of all international public climate finance (69%), entrenching existing inequalities and exacerbating debt crises in climate-vulnerable countries. Debt-inducing and return-seeking finance is inappropriate and unethical for adaptation, L&D, and for less developed countries – where the business model is unclear, untested or non-existent.  

3. Innovative sources of finance are needed  

To reach the trillions needed, polluters and profiteers must be held accountable for funding climate action rather than placing the burden on vulnerable communities that did not cause the climate crisis. Developed countries should introduce their own domestic policies now to create fiscal space and build the momentum for international agreements on innovative sources of finance. 

4. Those most responsible for climate change, and who are most able to pay, must do most to stop it. 

Climate finance is not about charity nor generosity; it is about responsibility and justice, and it is an agreed legal obligation of developed countries. Developed countries, bearing the greatest historical responsibility for climate change, must provide finance and agree an equitable burden-sharing mechanism (see infographic below).  

5. NCQG funding should be accessible to vulnerable communities

The effectiveness of climate finance hinges on its accessibility by communities who need it.  Current climate finance access mechanisms are slow (it takes on average over 1,100 days to get Green Climate Fund funding), complex, resource intensive, and highly uncertain – this has to change.

6. NCQG funding should support gender equality and human rights

The NCQG must operationalise human rights principles and incentivize climate finance providers to prioritize gender equality objectives. Climate change affects people differently – climate finance must be structured to reduce not deepen these inequalities.

After stalled progress, adaptation cannot be sidelined at COP29

COP29 must deliver stronger political commitment, action and funding to address the adaptation gap, currently estimated to be between $194-366 billion per year.

Adaptation is consistently sidelined and under-resourced, with 60% of international climate finance for mitigation. To rebalance funding in relation to needs, the NCQG should have thematic sub-goals, set in grant equivalent terms, for mitigation, adaptation and L&D.

This funding is necessary for developing and implementing robust National Adaptation Plans (NAPs). At COP29, the decision on NAPs should acknowledge both the progress made by countries on adaptation so far and address the need for financial and technical support for developing countries to create and update their NAPs in 2025.

COP this year will also need to make progress on indicators for the Global Goal on Adaptation (GGA). Amongst other things, this should include indicators for the means of implementation (financial support, capacity building and technology transfer) that are essential to transforming adaptation targets into reality.

COP29 must maintain momentum on Loss and Damage

As the third pillar of climate action – alongside mitigation and adaptation – L&D must be included as a dedicated sub-goal under the NCQG. The Fund established at COP28 is simply a channel; it is critical for the NCQG to include L&D so the Fund does not become an empty shell, negating the gains made last year in Dubai.

As the Fund continues to be operationalized, the Alliance calls for new pledges in the billions of dollars to support vulnerable communities. Parties should also address the need for improved information on L&D, by requesting an annual L&D Gap Report.

Conclusion

Agreeing an NCQG that is fit-for-purpose will not be easy, but we look to our political leaders to choose to be on the right side of history, reflecting the extraordinary need to find the resources to address the climate crisis in this pivotal decade. Countries must come together to agree an NCQG that is as monumental as the challenges we face. Only by securing sufficient and equitable climate finance can we build a resilient future for all. The world is watching; COP29 must deliver.

To find out more about the Alliance’s activities at COP29 visit our event page.

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Several years turned to ashes

The capacity to control the 2023 wildfires in Bolivia was low. The municipal governments of San Buenaventura and Rurrenabaque allocated their resources to the fight, but capacities were exceeded as the hot spots multiplied, amplified by the winds that execerbated the fires and caused wider destruction to vulnerable populations. Following the wildfires, seven communities in the Tacana territory reported the loss of approximately fifty-seven hectares of farming systems that were established to provide food security, strengthen the economy and environment, as well as increasing resilience. Many communities had already rebuilt these systems following previous flood events. Now, after several years of rebuilding, these systems were turned to ashes.

We couldn’t do anything. When we saw the plot burned, it was as if we had just arrived in the community. We had nothing as all our products had been burned. – Daniela Mamio, Community and Health Brigade member in San Buenaventura.

Water holes burned, forcing people to use dirty water, and leading to the increase of waste and health complications for children and the rest of the communities. Many people, Daniela included, were forced to stay behind to take care of their families and vulnerable people affected by conjunctivitis, stomach pain, diarrhea, and other conditions due to air and water pollution as a result of the wildfires. “There was a moment when the smoke became unbearable, and the women had to remain in the community due to the care roles they have” says Daniela. 

From floods to fires

Daniela lives in the Capaina Indigenous territory in San Buenaventura and comes from a family of brigade leaders. Her father, Wenceslao Mamio, was the lead authority of this brigade for many years, including 2014, the year that Tacana faced Bolivia’s worst floods in 60 years. She has followed in her father’s footsteps to become a community and health brigade member.  

Formed as part of Practical Action’s work on flood resilience in Bolivia, the brigades did not have the knowledge to fight fires. Instead, they used the community base to organize themselves and work together to achieve timely first responses and evacuations during the 2023 wildfires.  

Daniela recalls local people using manual fumigators and transporting water in drums and other makeshift containers as part of the first response. At first, the work of the brigades was preventative, supporting nearby communities that were on fire and trying to limit the spread. As the situation worsened, they were not able to avoid the fires causing widespread destruction to their crops. 

Brigades training has helped us a lot and it will help us when we experience not only floods, but wildfires too. We can organize ourselves, evacuate the elderly, and save our lives and hopefully the community. – Daniela Mamio

Through the Alliance, Practical Action facilitates the strengthening of community brigades through field schools, first aid workshops and flood search and rescue. The Risk Management Unit in the Municipal Government of San Buenaventura (GAM), in collaboration with Practical Action, the Madidi National Park, FAO and the WSC, have begun preventative actions to increase resilience against wildfires.  These include firefighting training, communication and information dissemination about wildfires and monitoring of heat sources. GAM is also training the community brigades to fight fires assigning days to dig trenches around the communities to increase preparedness against future wildfires. 

Expanding our climate resilience focus

Growing threats posed by extreme heat, wildfires and increasingly destructive storms have prompted the Alliance to expand its work in Bolivia. As a member of the Alliance, Practical Action will focus on understanding and proposing coordinated actions against fires and floods in the municipalities of Rurrenabaque and San Buenaventura, among other municipalities with high vulnerability to these threats. 

Through ongoing research and collaboration, Practical Action, through our work in the Alliance, seeks to better understand the impacts of wildfires and develop effective strategies that ensure a safer, more resilient future for communities on the frontlines of the climate crisis and poverty.  

Take a look at our country page to learn more about Practical Action’s work in Bolivia. 

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