COP27: The need for 'New Collective Quantified Goal' in Climate Finance

In 2009 at COP15, developed countries committed to jointly mobilize US $100 billion in climate finance annually. It could be drawn from public, private and alternative sources of financing. But these wealthy nations have repeatedly failed to meet this target. Oxfam has estimated that climate assistance provided to developing countries ($21-24.5 billion) was one-third of the estimates provided by the OECD. The disparity in estimates from OECD and Oxfam stems from the fact that the world has not consensually agreed on a definition of climate finance.
This year, along with climate finance a New Collective Quantified Goal (NCQG) will be on the table for deliberations at COP 27. The NCQG is expected to be finalized by 2024. Developing nations want the new goal to be to secure funds in trillions, given the need to implement the Paris Agreement, while wealthy nations want to expand the donor base.
The call for ramping up climate finance is getting louder.
The COVID-19 pandemic and the Russia-Ukraine war have pushed as many as 54 countries into a severe debt crisis.
The combined onslaught of debt and climate change is also putting the future of Small Island Developing States (SIDS) in peril. Overall, these nations have spent 18 times more in debt repayments than they received in climate finance.
African governments owe 3 times more debt to western banks, asset managers and oil traders than to China.
Asia received 25% of global climate finance despite being home to 60% of the world's population.
The Global South is currently spending 5 times more on debt repayments than on addressing the impacts of the climate crisis.
Against this backdrop, nations are looking beyond conventional financing tools such as grants and loans.
Deliberations at COP 27 would clarify whether the NCQG will deal with financial flows from developed to developing countries or whether it will include all flows. There is also a need to define whether NCQG will focus on a single global goal or multiple sub-goals such as adaptation and mitigation. However, with little time left, stakeholders have to ensure that mistakes made while framing climate finances are not repeated.