Reflection on Baku’s ‘NCQG Outcome’

COP29, held in Baku, Azerbaijan in November 2024, was branded as the “Finance COP” with hopes to secure a substantial commitment for global climate action. The New Collective Quantified Goal (NCQG) was expected to drive stronger financial commitments, especially from developed countries, to aid developing nations in their transition to cleaner energy technologies. However, the outcome of COP29 left many disappointed, particularly regarding the scale of financial assistance promised and the approach to climate justice.

Financing Needs of Developing Countries

• Upfront Costs of Green Technologies: Transitioning to clean energy solutions in developing countries requires substantial upfront investment, especially for renewable energy technologies. While some of these technologies have long-term cost benefits, the initial costs remain prohibitive without government financial support to ensure affordability for consumers.
• Additional Finance for Transformation: The urgency for scaling up finance within this decade is critical to achieving transformational changes in climate action. Developing countries need financial support to improve access to modern energy and infrastructure while ensuring that cleaner energy solutions are adopted widely and equitably.
• The Challenge of High Debt Burden: Developing nations face high debt levels, making it difficult to access affordable capital for climate action. The reliance on loans rather than grants exacerbates the financial challenges, as high-interest rates further limit the capacity of these countries to invest in green technologies and sustainable development.

Role of the NCQG and Financial Commitments

• The NCQG Framework: The NCQG was created to establish clear and quantifiable climate goals for countries, aiming for greater transparency and accountability in meeting global climate targets. This was expected to provide a structured approach to climate financing, ensuring that the financial pledges made are both sufficient and actionable.
• Developed Countries’ Financial Commitment: Despite the pressing financial needs outlined by developing countries, COP29 saw the developed world commit to providing $300 billion annually by 2035, far below the $1.3 trillion per year requested by developing nations. This amount is considered insufficient to address the urgent climate change challenges and does not represent a transformative change in global financial flows.
• Disappointment with the NCQG Outcome: The NCQG outcome was seen as disappointing, with the pledged amount of $300 billion considered too small to meet the scale of the climate crisis. This outcome raises concerns over the principles of climate justice, as it fails to address the financial needs of the Global South and does not reflect the urgency required for climate action.

The Road Ahead and the Need for Continued Dialogue

• Equitable Climate Action: The road ahead requires continued negotiations and dialogue, with a focus on climate justice and ensuring that the principles of Common but Differentiated Responsibilities and Respective Capabilities (CBDR and RC) are respected. It is essential to ensure that the Global South’s financial needs are addressed in a fair and equitable manner.
• The Importance of Global Cooperation: Climate change transcends national boundaries, making it imperative for the international community to collaborate towards collective climate action. The COP negotiations must continue to prioritize global solutions to the climate crisis, ensuring that all countries, regardless of their economic status, contribute fairly to mitigating its impacts.
• Pushing for Just Transitions: Developing countries must work together to ensure that any transition to cleaner energy is just, recognizing the unique challenges they face. This includes advocating for financial mechanisms that support sustainable development while addressing the disproportionate effects of climate change on vulnerable populations.

Practice Question

Q. Discuss the role of the New Collective Quantified Goal (NCQG) established at COP29 in addressing the financial needs of developing countries in their climate transition. Critically analyze the adequacy of the financial commitments made by developed countries.