SUMMARY of the Article “Negotiating Climate Finance,” by Ali Tauqeer Sheikh, Dawn, November 7th, 2024
The article sheds light on the upcoming climate summit COP29 in Baku, Azerbaijan, where the focus will be on setting global climate finance targets essential for addressing the evolving climate challenges. Pakistan’s delegation is confronted with a dual agenda: pursuing significant emissions reduction targets and mobilizing the finances necessary for both mitigating emissions and addressing the impacts of climate change, particularly in vulnerable countries like Pakistan. COP29 has three main goals: establishing a New Collective Quantified Goal (NCQG) to set financial targets for post-2025, enhancing national commitments through updated Nationally Determined Contributions (NDCs), and advancing the Loss and Damage Fund (LDF) to compensate affected communities. The NCQG is crucial, as it represents the global financial ambition required to meet climate adaptation and resilience goals, but developed nations have shown reluctance to commit to binding targets. Developing countries, including Pakistan, are advocating for a shift from loan-based finance to grant-based support to ease debt burdens, with calls to balance funding across adaptation, mitigation, and loss and damage initiatives. Pakistan has played a key role in operationalizing the LDF, securing $792 million in pledges to assist communities affected by climate-related damages. This has strengthened its position in the climate negotiations, enabling collaborative efforts within groups like G77 and China. As Pakistan pushes for broader integration of loss and damage considerations in NCQG frameworks, it emphasizes grant-based support and calls for more accountability in the allocation of funds. COP29 also introduces the Climate Finance Action Fund (CFAF), with contributions from fossil fuel-producing countries, which aims to support climate projects in developing nations. Pakistan’s strategy at COP29 involves not only securing increased financial commitments but also enhancing fund distribution mechanisms, transparency, and rapid disaster response funding for climate-triggered events. The article underscores the importance of Pakistan’s proactive engagement in global climate finance dialogues, emphasizing the necessity for institutional readiness, legal reform, and private-sector involvement to effectively manage future climate finance structures.
Easy/Short SUMMARY:
The article discusses the upcoming COP29 climate summit in Baku, Azerbaijan, where Pakistan will push for global climate funding to address urgent environmental issues. Pakistan’s main goals include reducing harmful emissions and securing funding to deal with climate-related damage, such as floods and heatwaves. A new financial goal is being proposed to meet climate needs beyond 2025, with countries like Pakistan advocating for support in the form of grants rather than loans to ease their financial burdens. Pakistan has played a leading role in setting up the Loss and Damage Fund (LDF), which helps communities hit by climate disasters, and will also engage with other developing countries to increase support for the climate finance goals. The summit will also see the launch of a new fund, the Climate Finance Action Fund, which aims to boost climate action projects. Overall, Pakistan’s focus is on ensuring fair funding distribution and building a transparent system to help the country and others combat climate change effectively.
SOLUTIONS of The Problem:
Shift to Grant-Based Financing
Advocate for grant-based climate finance instead of loan-based support to help developing nations avoid further debt burdens while addressing climate adaptation and resilience efforts.
Legal and Institutional Reform
Enhance institutional readiness in Pakistan by implementing legal reforms and engaging the private sector, enabling smooth access and management of incoming climate funds.
Strengthening Collaboration with International Groups
Foster collaborative networks within groups like G77, China, and other developing nations to strengthen bargaining power for financial support and fair distribution of funds.
Increasing Private Sector Involvement
Encourage the private sector to participate in climate action initiatives by offering incentives, promoting green investments, and establishing public-private partnerships.
Promoting Community-Based Climate Solutions
Promote local adaptation and resilience projects that engage communities directly impacted by climate change, ensuring that funds are used where they’re needed most.
Advocacy for Predictable and Accessible Funding
Push for accessible, long-term funding sources that prioritize vulnerable nations, making it easier to plan and implement effective climate adaptation measures.
Prioritizing Accountability and Transparency
Implement monitoring systems to enhance transparency and accountability, ensuring that allocated funds reach their intended targets and are used effectively.
Enhancing Disaster Response Mechanisms
Focus on rapid disaster response funding to address immediate needs in climate-triggered events, especially for communities highly vulnerable to climate impacts.
Encouraging Financial Innovations
Explore innovative financial tools, such as green bonds, carbon credits, and debt swaps, to diversify funding sources and attract additional investments for climate projects.
Strengthening Provincial and Regional Climate Initiatives
Engage provincial governments, financial institutions, and civil society organizations to play an active role in climate discussions, enabling a cohesive national response.
IMPORTANT Facts and Figures Given in the Article:
- COP29 climate summit to be held in Baku, Azerbaijan, starting November 11, 2024.
- COP29 will focus on three main components: NCQG, NDCs, and LDF.
- India and other countries propose an annual climate finance target of $1 trillion, compared to the previous $100 billion commitment.
- Estimated global climate finance needs range from $5.8 trillion to $13.6 trillion by 2030.
- Pakistan helped secure $792 million in pledges for the Loss and Damage Fund (LDF).
- Climate Finance Action Fund (CFAF) will allocate 50% of its capital towards climate projects in developing countries.
MCQs from the Article:
1. Where is the COP29 climate summit being held in 2024?
A. Islamabad
B. New York
C. Baku
D. Geneva
2. Which fund was established to support communities affected by climate-related damage?
A. Climate Resilience Fund
B. Climate Development Fund
C. Loss and Damage Fund (LDF)
D. Environmental Protection Fund
3. What is the suggested climate finance target proposed by India and some other countries?
A. $100 billion per year
B. $1 trillion per year
C. $500 million per year
D. $50 billion per year
4. Which financial mechanism is aimed at providing funds for climate-triggered disasters in vulnerable communities?
A. Climate Finance Action Fund (CFAF)
B. Adaptation Finance Fund
C. Global Resilience Fund
D. Sustainable Development Fund
5. How much did Pakistan help secure for the Loss and Damage Fund (LDF)?
A. $500 million
B. $792 million
C. $1 billion
D. $100 million
VOCABULARY:
- Emissions (اخراجات): The release of gases or particles, often pollutants, into the atmosphere.
- Mobilising (متحرک کرنا): Bringing resources or people into action for a particular goal.
- Resilience (لچک): The capacity to recover quickly from difficulties; strength.
- Adaptation (مطابقت): Adjusting to new conditions or environments.
- Mitigation (کمی): The action of reducing the severity of a problem.
- Collective (اجتماعی): Done by people acting as a group.
- Obligatory (لازمی): Required by a legal, moral, or other rule; compulsory.
- Pivotal (اہم): Of crucial importance.
- Advocating (وکیل بننا): Publicly supporting or recommending a cause.
- Institutional (ادارہ جاتی): Related to an established organization or corporation.
- Framework (ڈھانچہ): A basic structure underlying a system.
- Collaboration (تعاون): The action of working with others to achieve something.
- Accountability (جوابدہی): Being responsible and answerable for actions or decisions.
- Disaster Response (آفت کا جواب): Immediate action taken to address the effects of a disaster.
- Sustainable (پائیدار): Able to be maintained at a certain level.
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dawn.com
Negotiating climate finance
Ali Tauqeer Sheikh
THE history of fossil fuel industry has come full circle. The climate summit begins on Nov 11 in Baku, Azerbaijan, which was one of the first major centres of commercial oil extraction during the Industrial Revolution. Nobel Prize founder Alfred Nobel and his brothers made their money by establishing Branobel, which became one of the largest oil producers in Baku. It introduced several technological innovations including the first oil pipeline in Russia, and railway and commercial shipping lines to facilitate oil transportation. Climate leaders from across the world will congregate in Baku at COP29 to agree on global financial targets and to tackle the ever-increasing ecological footprint of the Nobel brothers’ technological innovations.
A complex agenda awaits Pakistan’s delegation at the upcoming climate summit. It is structured around two main pillars, both central to Pakistan’s climate resilience and economic development: first, enhancing ambition with an emphasis on deep, rapid, and sustained emission reductions to keep the global temperature rise below 1.5 degrees Celsius; second, enabling action by mobilising the finances necessary for reducing climate emissions, adaptation, and addressing loss and damage.
Both pillars are mutually reinforcing, and progress in one supports advancements in the other. COP29 is an opportunity to showcase how Pakistan is setting high-ambition climate targets and where and how we can become a destination for international climate finance. Our climate challenges are spread over a diverse ecosystem that can potentially offer a wide range of opportunities to pilot innovative climate solutions.
The main components of how COP29 plans to tackle climate finance include: i) the establishment of a New Collective Quantified Goal (NCQG) for climate finance, ii) enhanced commitments from countries through updated Nationally Determined Contributions (NDCs), and iii) the operationalisation of effective mechanisms for the Loss & Damage Fund (LDF). All three have particular significance for Pakistan.
A complex agenda awaits Pakistan’s delegation at the upcoming climate summit.
The NCQG will help create a new financial goal for evolving global financial needs. India and some other countries want an annual mobilisation target of $1 trillion, compared to a commitment of $100 billion per year, initially set for 2020. Some studies have projected even higher estimates at $5.8tr to $13.6tr by 2030. Developed countries are not inclined to commit to financial contributions that are obligatory, predictable, and accessible, let alone such large sums. Nor have they agreed to link NCQG with the LDF, as argued by Pakistan’s stalwart ambassador, Nabeel Munir as head of the all-important Subsidiary Body for Implementation.
The ask from the developing countries is desperate: at least 50 per cent of climate finance should shift from loans to grants to alleviate debt burdens. And for this, they seek balanced funding across the board for adaptation, mitigation, and loss and damage. In a nutshell, the biggest challenge for the Baku summit is to finalise the NCQG for the post-2025 period. Without this building block, the targets of NDCs can hardly be enhanced, nor can LDF be scaled up. The submission of the revised NDCs is due in February 2025.
The NCQG framework has expanded to include nontraditional donor countries, including some of Pakistan’s Arab friends. Several additional challenging financial instruments are also being discussed, including debt swaps, blended finance, green bonds, payment for environmental services, special drawing rights, policy-based guarantees, and carbon-pricing mechanisms. Each new source of financing will entail new complexities and conditionalities. Most importantly, this menu underlines the need for institutional readiness, legal reforms, and engagement with the private sector.
Pakistan actively engaged on the NCQG during COP28 and several UNFCCC meetings since then, advocating for a comprehensive approach that integrates social concerns, particularly emphasising the need for developed nations to take greater responsibility in providing financial support for adaptation efforts. Pakistan’s pivotal role in operationalising the LDF helped secure pledges amounting to $792 million. Following this success, it advocated for the integration of loss and damage considerations into broader climate finance frameworks, including the NCQG.
Pakistan’s significant role in shaping the Global Stocktake of the Paris Agreement’s implementation and in the Mitigation Work Programme has significantly influenced its approach to the NCQG. Through its integrative approach, Pakistan seeks funding mechanisms that are responsive to immediate resilience needs, emphasises grant-based resources, and integrates long-term considerations for loss and damage. The LDF’s operationalisation is seen by Pakistan as a crucial step towards achieving equitable climate finance that aligns with the objectives of the NCQG.
Pakistan’s role in operationalising the LDF has positioned it as an important actor, allowing it to collaborate within various groupings such as the G77 and China. This collaboration strengthens the collective bargaining power in negotiations related to both LDF funding and the NCQG, and collaboration with other developing countries from Bermuda to the Philippines.
Looking ahead, Pakistan will engage in ongoing discussions at COP29 and beyond, ensuring that any financial goals set are realistic and reflective of desperate needs.
Finally, the COP29 presidency will launch the Climate Finance Action Fund. Ironically, it will be capitalised by voluntary contributions from fossil fuel-producing countries and companies. The fund’s aim is enticing: catalyse investments across mitigation, adaptation, and research and development initiatives. The CFAF has announced allocating 50pc of its capital towards climate projects in developing nations, with an emphasis on supporting their next generation of NDCs. It’s still unclear who from Pakistan will engage on CFAF, particularly since it is expected to provide rapid response funding for climate-triggered disasters affecting vulnerable communities.
It is encouraging to see a growing interest in Pakistan for participation in COP29, shown by several provincial governments, private sector, financial institutions, and civil society. How would Pakistan’s contingent engage with the international community to help finalise the NCQG Framework, get specific figures agreed for increased financial commitments, strengthen mechanisms for fund distribution, and enhanced monitoring and accountability? The challenge for the delegates is to meaningfully and coherently engage with the future architecture of international climate finance.
The writer is an Islamabad-based climate change and sustainable development expert.
Published in Dawn, November 7th, 2024
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