By Victoria Verdesoto-Phothirath
In the run up to COP29, E Co. consultants wrote a series of briefings and reflections discussing what was at stake for progress on the New Collective Quantified Goal (NCQG), Article 6, the Global Goal on Adaptation and Loss and Damage. We share our insights, response and takeaways below.
The NCQG falls short in many ways
After gruelling, last-minute negotiations, the quantum is finally here: $300 billion a year until 2035. This replaces the previous goal of $100 billion to be mobilised from a year to be mobilised from international public and private finance, agreed upon in 2009.
This falls incredibly short of the estimated $1.3 trillion dollars required on a yearly basis to tackle climate change. “This is not just a failure; it is a betrayal”, says the LDC Group, which represents $1.1 billion people worldwide. This sentiment was also voiced by other negotiating blocks such as AOSIS, and countries such as India and Nigeria.
The language, once again, remains vague on the sources of finance and its contributors. It is largely understood that developed countries bear the responsibility of contributing a large proportion of this amount, although the language on the NCQG leaves the door open for developing countries such as China, India or Brazil (who already contribute substantial climate finance on a voluntary basis to other developing nations but is not considered climate finance in the UN system), to voluntarily report these flows as contributing to the $300 billion amount. This is in line with developed countries’ calls to expand the contributor base and for more transparency on overseas spending.
Nevertheless, the USD 1.3 trillion per year figures in CMA.6 text. The decision vaguely calls on parties to scale up financing “from all public and private sources to at least USD 1.3 trillion per year by 2035”. A “Baku to Belém 1.3T Roadmap” will produce a report next COP to establish a realistic path towards mobilising this amount. It is thus understood that this USD 300 billion figure is a subset of the USD1.3 trillion goal, but will cover public finance (plus private capital mobilised because of this public finance, in line with how MDBs and climate funds already report). Nevertheless, leveraging private investment, particularly for adaptation and loss and damage, has been incredibly challenging.
Considering inflation and existing MDB contributions to the Paris Agreement, USD 300 billion is not a move away from business as usual. Crucially, the text does not include specific sub-goals on adaptation or loss and damage, which are areas that have been historically underfunded and require grant-based, public finance.
In the pavilion area at COP29, frustration on implementation and access modalities was also clear. The quantum of the NCQG is highly contested, but ultimately, “none of it matters if access remains difficult”, as Kelly Sharp, Canada’s lead climate negotiator pointed out at a CFAN event.
Article 6
COP29 made substantial progress in implementing the Paris Agreement’s Article 6 on carbon markets. Key agreements were reached on guidelines for ITMOs (carbon trading between countries) under Article 6.2, and project-specific carbon credits under the Paris Agreement Crediting Mechanism (PACM), under Article 6.4.
A significant step forward was the agreement on standards for carbon removals, methodologies, and social and environmental safeguards under the PACM. However, countries requested further clarifications, and will revisit the issue at COP30 in Belém. Similarly, a few issues still remain regarding ITMOs, including technical guidance on adjustments in case of single- and multiple-year NDCs, and methodological guidance related to GHG emissions avoidance.
Crucially, the final text on Article 6.2 still has significant shortcomings. Key details, including formal approval and potential risks like reversal and quantification uncertainties, may not be disclosed until long after credits are issued or even used by issuing countries. This lack of transparency undermines the credibility of the carbon market and hinders the ability of market participants to make informed decisions.
The Global Goal on Adaptation and adaptation finance
We are left with another incremental COP in terms of implementing the GGA.
On the positive side, COP29 introduced the Baku Adaptation Road Map, a potential tool to advance adaptation implementation. The global goal on adaptation (GGA) was secured as a standing agenda item (a historically contested issue at COPs) , providing a dedicated space for future discussions.
Similarly, progress was made on the UAE-Belém work program. Experts are tasked with developing a concise set of global adaptation indicators (no more than 100!). Notably, these indicators will include those related to the “means of implementation,” such as finance and technology, reflecting the growing recognition of the need to address the adaptation finance gap.
However, much of COP29 focussed on semantic debates around “transformational” adaptation . This was worsened by a UNFCCC technical guidance note published the week before COP29, and its implications on measuring adaptation, with many developing nations expressing concern over the difficulties it poses in accessing climate finance. This debate is expected to continue in the Bonn Climate Change conference in June next year.
Loss and Damage
Following the establishment of the Fund for Responding to Loss and Damage (FRLD) at COP27, and progress at COP28, with the World Bank as its trustee, the issue of the FRLD’s capitalisation was front and centre at COP29. A key outcome of COP29 is that the FRLD is now fully operational after the official signing of the Trustee Agreement and the Secretariat Hosting Agreement, with the ability to start disbursement of finance in 2025.
Whether loss and damage should be included in NCQG proved to be a contentious point. Despite developing nations strongly advocating for its inclusion, loss and damage was not included in the NCQG, although the final text acknowledges the need for public, grant-based finance to address the issue.
Despite initial pledges on the second day of COP29, such as Sweden’s $19 million , the fund’s capitalisation falls short of addressing the scale of the problem, as Antonio Guterres, UN Secretary-General pointed out. The lack of voluntary pledges to the FRLD highlights why many were adamant that a specific sub-goal under the NCQG should be included in its final text, as Loss and Damage requires urgent and timely action, as climate change’s effects are already felt.
Did you read our COP29 series? Find our previous COP29 briefings here: