G77 and China Reject Climate Finance Goal Framework at Baku Climate Talks

The G77 and China, representing about 130 nations at the UN climate talks, have dismissed the proposed framework for a draft negotiating text on a new climate finance goal. This issue is central to this year's climate summit in Baku, Azerbaijan. The group is advocating for a climate finance target of USD 1.3 trillion, specifically for developing countries, addressing adaptation, mitigation, and loss and damage.

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According to the Loss and Damage Collaboration, an international coalition of climate researchers and activists, the G77 and China have emphasised that the new climate finance package must meet their needs and priorities. They insist on a minimum amount of USD 1.3 trillion to support mitigation, adaptation, and loss and damage initiatives. The group argues that the NCQG should not be seen as a global investment goal but rather as dedicated financial support from developed countries.

Developing Countries' Stance on Climate Finance

Developing countries are pushing for the new climate finance goal to prioritise public, grant-based, and concessional finance. These funding types are less burdensome for nations already facing financial challenges. They also demand that developed nations provide arrears for the USD 100 billion climate finance goal agreed upon in 2009. This target was only met in 2022, with loans making up about 70% of the total climate finance provided.

Other groups of developing countries, such as the Like-Minded Developing Countries (LMDCs), Alliance of Small Island Developing States (AOSIS), Least Developed Countries (LDCs), and Independent Alliance of Latin America and the Caribbean (AILAC), have supported G77 and China's rejection of the draft text. They argue that it does not accurately reflect developing countries' concerns.

Developed Countries' Perspective

Developed countries prefer a broader approach where governments, private companies, and investors all contribute to tackling climate change. They oppose setting a strict funding amount solely for developed countries to provide. The European Union (EU) has stated that public finance depends on factors like funding sources, contributor base, and timeframe.

The United States has proposed that the NCQG should be a multi-layered global investment goal applicable to all countries. It also suggests that developing nations already providing significant bilateral climate finance should contribute as well.

Historical Context and Equity Concerns

The United Nations Framework Convention on Climate Change (UNFCCC) states that high-income industrialised nations, known as Annex-II countries, are responsible for providing finance and technology to help developing countries address climate change. These include the US, UK, Canada, Japan, Australia, New Zealand, and EU member states like Germany and France.

Some developed countries argue that since 1992, the global economic landscape has changed significantly. They suggest wealthier nations like China and some Gulf states should also contribute to the new climate finance goal. However, developing countries see this as shifting responsibility from those who have historically benefitted from industrialisation and contributed most to greenhouse-gas emissions.

Developing nations argue that expecting them to contribute undermines equity principles when many still face poverty and inadequate infrastructure amid worsening climate impacts.