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22nd June 2023 (7 Topics)

New Collective Quantified Goal on Climate Finance (NCQG)

Context

The recently concluded Bonn climate conference in Germany was critical for reviewing and reforming the Climate finance architecture.

  • The Funds allocated for the climate menace by developed countries are inaccessible, privately owned and not reaching the developing countries.

What is New Collective Quantified Coal (NCQG)?

  • Climate finance and the clarity regarding its definition so that developing countries are able to accurately assess the extent of the financial flows for climate action.
  • India and other developing countries will push for the rich countries to agree to a new global finance target known as the new collective quantified goal on climate finance (NCQG).
  • The aim of the target to provide for the costs required for addressing and adapting to climate change.
  • The discussions on NCQG must focus on the resource flow’s quantity, quality and scope.

Lifestyle for Environment (LiFE), which was proposed by Indian Prime Minister, will also be part of the agenda.

  • It is a pro-people and pro-planet effort that aims to make a global shift in form the mindless and wasteful consumption to a mindful and deliberate utilization of natural resources.

Steps planned under NCQG:

The NCQG needs to source climate finance through new sources and accessible, justice-based modalities.

  • At least 50% of the modes of finance accounted for under the NCQG must be delivered in the form of grants.
  • Sources for mobilizing resources that should be counted under the NCQG should include but are not limited to the following:
    • Public finance as committed by developed countries;
    • Public finance generated from taxation and penalties on carbon majors
    • and other environmentally-harmful industries, without incurred costs being passed on domestically to the public;
    • Redirecting public and private subsidies away from fossil fuel
    • corporations and towards adaptation and mitigation solutions;
    • Domestic funding generated through blended financing, green bonds, public-private partnerships, and other modalities involving multilateral development banks, national banks, and other entities under the private sector; and
    • Public finance freed up through the cancellation of debts of the most vulnerable nations, such as SIDS and LDCs.

Significance

Using this approach can help enhance and speed up finance sourcing by fitting climate-related needs within the scope of other existing financing mechanisms that do not explicitly or heavily factor in the climate lens, especially from multilateral development banks, national banks, and other privately-owned funding institutions. 

Way forward:

  • Analysing climate change adaptation and mitigation needs of developing countries cannot be done in isolation from their national development goals and pursuit of the UN Sustainable Development Goals that has a deadline to be attained by all countries by 2030.
  • The needs and priorities of developing countries that will be taken into account for determining the new goal by 2025 have also been impacted by the COVID-19 pandemic, which must be reflected into the framing and mechanisms under the NCQG.

Lifestyle for Environment (LiFE):

  • The idea of LiFE was introduced by the Prime Minister during the 26th United Nations Climate Change Conference of the Parties COP-26 in Glasgow last year.
  • The idea promotes an environment conscious lifestyle that focuses on mindful and deliberate utilisation instead of mindless and destructive consumption.
  • Mission LiFE borrows from the past, operates in the present and focuses on the future.
  • Key provisions:
    • The Mission plans to create and nurture a global network of individuals, namely ‘Pro-Planet People’ (P3)
    • P3 will have a shared commitment to adopt and promote environmentally friendly lifestyles.
    • Through the P3 community, the Mission seeks to create an ecosystem that will reinforce and enable environmentally friendly behaviours to be self-sustainable.

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