Unmet climate pledges fuel Africa's push for $5.9t by 2030 to avert loss and damage

Africa is now pushing for a climate finance goal worth not less than $5.9 trillion by 2030.

The ambitious target, which accounts for inflation and is grounded in scientific data, aims to address the extensive and growing requirements for climate adaptation, mitigation, and loss and damage in developing countries.

As the world prepares for COP29 in Azerbaijan, the establishment of the New Collective Quantified Goal (NCQG) for climate finance has become a critical focus.

The call for an ambitious NCQG follows a grim history of unmet climate finance commitments.

During COP15 in Copenhagen in 2009, developed countries pledged to mobilise $100 billion annually by 2020 to aid developing nations' ability to combat climate change.

However, this target was only surpassed in 2022, with $115.9 billion mobilised. This delay has led to mistrust between developed and developing countries, emphasising the necessity for a more reliable and ambitious financing framework.

The financial requirements of developing countries have drastically increased since the original $100 billion target was set.

According to the United Nations Framework Convention on Climate Change (UNFCCC), developing nations need between $5.8 and $5.9 trillion by 2030, a significant portion of which must come from international and domestic financing.

Independent analyses recommend annual increase of $2.4 trillion in climate investments by 2030, with $1 trillion expected from external sources. Various stakeholders have proposed different targets for the NCQG.

India advocates for at least $1 trillion annually, primarily through grants and concessional loans, while UNCTAD suggests a phased approach, starting with $500 billion in 2025 and aiming for $1.55 trillion by 2030.

The Arab Group proposes $1.1 trillion annually, excluding arrears from the previous target.

However, several critical issues remain unresolved in the NCQG negotiations.

There is an ongoing debate over whether emerging economies like China should contribute to the funding, with discussions about imposing levies and taxes on fossil fuels as potential sources of finance.

The inclusion of loss and damage in the new goal is another contentious point, just like the push for more grant-based finance instead of loans.

Transparency is also a key concern, with the need for effective mechanisms to track and hold countries accountable.

The G77, representing developing countries, argues that developed nations should shoulder the responsibility, citing their historical emissions. In contrast, developed countries propose a broader contributor base, including high-income economies and high-emission countries.

The current global financial architecture (GFA) is under scrutiny for its inadequacy in meeting climate and Sustainable Development Goals (SDGs).

Evidence proves that the current GFA lacks sufficient resources to meet SDGs and climate targets, with developing countries facing an annual financing gap of $5.4 – $6.3 trillion from 2020 to 2025.

Least Developed Countries (LDCs) and Small Island Developing States (SIDS) struggle to secure funds for climate risks, and the GFA lacks equity, responsiveness, and crisis management, limiting its effectiveness.

Experts are now pushing for a reformed GFA which is more inclusive, transparent, and coordinated to enhance the overall impact of climate finance efforts.

"The NCQG should not replicate the $100 billion goal, often viewed as a politically convenient figure rather than based on actual needs," stated Julias Mbatia, Africa Group Negotiator Finance.

"Instead, it should be ambitious enough to cover comprehensive needs of developing countries. The goal must reflect the true scale and urgency of the climate crisis," he noted.

During a recent meeting in Mombasa, African experts on climate finance and the Global Goal on Adaptation emphasised that developed countries should take the lead in providing and mobilising climate finance.

They argued that this approach ensures fair contributions, considering the historical responsibility of developed nations for emissions.

Mbatia explained the NCQG aims to address these challenges by incorporating diverse financial instruments, addressing debt distress, and proposing necessary reforms. Traditional climate finance tools, such as concessional loans and grants, have proven insufficient to meet the growing financial demands of climate action.

Kulthoum Omari, the AGN adaptation lead coordinator, highlighted several key financial instruments necessary for effective climate adaptation. Omari stated, "For climate adaptation, grants should be used to facilitate community-based adaptation and capacity-building projects.

She also emphasised the importance of concessional loans, explaining that they "finance resilient infrastructure against climate variability."

Omari discussed the role of insurance schemes, saying they are essential "to protect against climate-induced losses." She noted that green bonds can "mobilise private capital for urban resilience and infrastructure projects."

Additionally, she suggested using blended finance "to leverage public funds to attract private investment in adaptation initiatives."

Regarding loss and damage, Omari explained that various financial instruments could provide critical support.

"Grants are crucial for providing immediate relief and reconstruction support post-disaster," she said, while pointing out the importance of insurance and risk pools, which "spread financial risk across regions.

"Omari mentioned that catastrophe bonds can "transfer disaster risks to investors and fund recovery efforts," and she highlighted debt relief and swaps as tools "to exchange debt relief for commitments to loss and damage mitigation."