As nations assemble at COP29 in Baku, Azerbaijan, one issue is expected to dominate the summit: climate finance.
In total, countries need to invest trillions of dollars to build clean-energy systems, prepare for an increasingly hotter world and deal with the aftermath of climate change-fuelled disasters.
The UN climate convention also specifically requires developed nations to provide financial resources – usually referred to as “climate finance” – to help developing countries do this.
Under the Paris Agreement, governments agreed to set a new climate finance target by 2025 that would channel money into these nations and help them tackle climate change.
But negotiations over this “new collective quantified goal” (NCQG) for climate finance in recent months have exposed deep divides in the UN climate process.
Nations disagree on virtually every element of the NCQG, including the amount of money that needs to be raised, who should contribute, what types of finance should feed into it, what it should fund and what period of time it should cover.
Developing countries are looking to high-income parties, such as the US and the EU, to provide the money. Meanwhile, developed countries want an all-encompassing goal that includes input from private companies and large, emerging economies, such as China.
In this article, Carbon Brief explores the issues countries have been clashing over, which will have to be resolved to secure an outcome in Baku.
- Why are countries discussing a new climate finance goal?
- What number will replace $100bn in the new target?
- Which countries will contribute to the new target?
- What sources of money should be included in the NCQG?
- What kind of activities will the NCQG support?
- How long will countries have to meet the NCQG?
- How will progress towards the target be reported and tracked?
Why are countries discussing a new climate finance goal?
Climate finance is at the heart of international climate politics. It is widely understood that developing countries need to invest large sums of money if they are to cut their emissions and prepare for a hotter world, in line with their climate plans.
The nature of climate finance is disputed, but, currently, it largely comes from developed countries’ aid budgets and contributions from multilateral funds and development banks (MDBs), such as the World Bank. Smaller amounts come from the private sector.
When nations negotiated the UN Framework Convention on Climate Change (UNFCCC) in 1992, the treaty said that developed countries “shall provide” financial resources to help developing countries tackle climate change.
In 2009, developed countries agreed to “mobilise” $100bn of climate finance a year by 2020 – an annual target that was meant to run through to 2025. This became a fraught topic, as developed nations missed the 2020 deadline and only reached it two years later in 2022.
In the Paris Agreement of 2015, Article 9 reaffirms that “developed country parties shall provide financial resources to assist developing country parties”. Nations also decided that, before 2025, they:
“Shall set a new collective quantified goal from a floor of $100bn per year, taking into account the needs and priorities of developing countries.”
This “new collective quantified goal” (NCQG) is the focus of negotiations at COP29. With the 2025 deadline approaching, this will be the final opportunity to settle on the new target.
Negotiators have been gathering for months to discuss the issue, in an effort to find a landing ground. However, the NCQG is both very technical and highly politicised, leaving them deadlocked on most issues.
Following several rounds of negotiations, the co-chairs (from Australia and the United Arab Emirates) overseeing the talks were tasked with producing a “substantive framework for a draft negotiating text”, which would form the basis of COP29 deliberations.
The resulting document offers the outlines of the new climate finance target and crystallises the key areas of remaining disagreement. It is nine pages long and contains 173 elements that are still in square brackets, meaning they are undecided.
What number will replace $100bn in the new target?
Unlike the $100bn, which was an arbitrary number put forward by global-north leaders, the NCQG must take into account the “needs and priorities of developing countries”. Many assessments have shown that these nations’ investment needs will run to trillions of dollars for tackling climate change in the coming years.
However, setting a numerical climate finance target – or “quantum” – is not straightforward. Many of the future demands of dealing with climate change are difficult to quantify and there has been no officially mandated effort to work out what these needs are under the NCQG.
The closest attempt is the “needs determination report” from the UN Standing Committee on Finance, based on combining various reports in which developing countries have self-assessed their own requirements. However, the committee stresses that its estimate of $5-6.9tn over the next five years contains “significant gaps” and, therefore, is not a true reflection of needs.
An analysis by the Overseas Development Institute (ODI) points out that this leaves NCQG negotiators relying on various calculations by NGOs, management consultancies and research groups “undertaken under different contexts, for possibly different objectives and with different mandates”.
Despite this lack of clarity, negotiators have converged around the need for trillions of dollars to deal with climate change. But arriving at a more precise figure for the NCQG has proved difficult, in part because countries do not agree on what it is supposed to include.
Developing countries prefer a target made up largely of public funds from developed countries. Meanwhile, developed countries have proposed targets covering a much larger range of sources and including “global investment flows”, rather than public money given by developed countries to developing ones alone. (See: What sources of money should be included in the NCQG?)
As a result, Iskander Erzini Vernoit, director of the Imal Initiative for Climate and Development, tells Carbon Brief that, “while all parties are talking about trillions, they are doing so in entirely different ways”.
Developing country groups, including the Like-Minded Developing Countries, the Arab Group and the African Group, have proposed a few ideas for climate finance targets, all in the region of $1-1.3tn a year, as the chart below shows. Pakistan has proposed the highest figure so far – “a minimum of $2tn” – but it has not specified the timeframe.
Meeting such a target would require an unprecedented tenfold boost in climate finance by 2025. (However, it is difficult to compare like-for-like, as countries have different expectations about the sources that will make up the NCQG target.)
After years of developed countries struggling to hit the relatively modest $100bn goal, these new demands raise the issue of plausibility.
Major contributors including the UK, France and Sweden have all slashed their aid budgets in recent years, reducing the pool of public finance available.
Meanwhile, the US has consistently underperformed in providing climate finance. This is despite most analyses indicating that it should be by far the largest contributor, as it is the world’s richest country and the biggest historic contributor to climate change.
Jonathan Beynon, a senior policy associate at the Center for Global Development, tells Carbon Brief:
“Public budgets are under pressure in most developed countries, prospects for such massive increases in climate finance look limited, however justified they might seem.”
Developed countries stress the need for a “realistic” NCQG target. In one statement, the US mentions the annual needs of developing countries exceeding $1tn a year, but says “it is clear that public international finance alone cannot reach such levels”. It adds:
“There is a fine line between a support goal that stretches contributing parties and one that is so unrealistic that it actually diminishes incentives and potentially undermines the Paris Agreement process.”
Furthermore, the US argues that developed countries do not have to meet the “totality of needs” in developing countries, noting that the NCQG mandate only requires parties to “tak[e] into account” these needs.
Developed countries have largely resisted suggesting a numerical target for the NCQG. They argue that a specific amount cannot be agreed upon until a decision is made on who will contribute towards it. The US has only gone so far as to restate that the goal should be “from a floor of” $100bn per year – as already set out by the Paris text.
(Experts have noted that the $100bn goal should be corrected for inflation, at the very least, which would add many billions of dollars. Beynon says “inflation and economic growth alone” would allow “perhaps a doubling by 2035”.)
Another developed-country proposal from the EU mentions a goal of $2.4tn annually by 2030, a number identified by the Independent High-Level Expert Group on Climate Finance – a group of economists tasked with working out the “investment” needs in developing countries.
In the expert group’s proposal, just $150-200bn per year would come directly from other countries, with $1.4tn from the domestic resources of developing countries themselves.
Alex Scott, a senior associate in climate diplomacy at the thinktank ECCO, noted in a recent briefing that progress outside negotiations, such as mobilising more climate finance from the World Bank, could “build a bit more confidence amongst developed countries that…there are other sources of finance that are going to complement what they can put on the table”.
One recent assessment by a team of NGO climate-finance analysts concluded that a “business-as-usual” scenario could result in $173bn of climate finance being provided and mobilised by 2030 – a 50% increase from 2022 levels. This is based on existing pledges by developed countries and planned reforms to multilateral institutions.
Others in civil society point to the trillions spent on Covid-19 and the war in Ukraine, and the trillions that could be raised by taxing fossil fuels and billionaires. Meena Raman, head of programmes at the Third World Network, tells Carbon Brief that the unwillingness of developed countries to commit to more funding is a failure of “political will”:
“It’s very dubious when you say you have not got enough money for climate, but you see that there is a lot of money for bombs and wars.”
Which countries will contribute to the new target?
One of the most contested topics in NCQG negotiations is whether to expand the list of countries that must provide climate finance.
Global-north nations broadly want relatively wealthy, emerging economies, such as China and the Gulf states, to start contributing officially under the UN climate regime. Developing countries argue that, after failing to meet their climate-finance targets, developed countries are trying to shift their responsibilities.
As it stands, only 23 countries are obliged to provide climate finance, including western Europe, the US, Japan, Australia, Canada and New Zealand. The EU must also provide climate finance, independently from the funds provided by its member states.
This group, listed in “Annex II” of the UNFCCC, is based on the membership of the Organisation for Economic Co-operation and Development (OECD) in 1992. (OECD member Turkey secured removal from Annex II in 2001, on the basis that it was an emerging economy.)
The world has changed a lot in the three decades since the contributor list was agreed.
As the chart below shows, emissions from non-Annex II countries, particularly China, have increased significantly since 1992. Many of these nations are also wealthier, and both of these factors are frequently cited as reasons for such countries to start paying climate finance.
There have been consistent efforts by donor countries to broaden the pool of climate finance providers. Indeed, the language in the Paris Agreement reflects this, saying that “other parties” are “encouraged to provide” climate finance “voluntarily”.
However, the division between countries “obliged” versus “encouraged” to contribute has remained. Only Annex II countries were responsible for delivering the $100bn goal.
Developed countries are clear that bringing more donors on board for the NCQG is a priority for them. In a submission ahead of negotiations, the EU refers to “evolving” responsibilities and abilities to pay. It states that:
“The collective goal can only be reached if parties with high greenhouse gas emissions and economic capabilities join the effort.”
The US says that, in its view, agreeing to renegotiate the climate-finance target from 2025 was done on the basis of considering new contributors, making this topic “entirely legitimate, indeed appropriate”.
Developing countries, on the other hand, are firmly opposed to any changes. They argue that it is beyond the legal mandate of the NCQG.
The G77 and China group of 134 developing countries stresses that the NCQG falls under the Paris Agreements and the UNFCCC. Therefore, it includes the principle of “common but differentiated responsibilities and respective capabilities” (CBDR-RC).
In this case, CBDR-RC refers to developed countries’ obligation and capacity to provide climate finance to developing countries. This principle is “not negotiable” and the NCQG mandate “does not include any discussions on modifications” to climate treaties, the G77 and China group says.
There is no agreed-upon way to determine how responsible countries are for causing climate change, and how much they should be helping to prevent it. This makes determining who could or should contribute to an expanded donor base complicated.
The table below, which draws on a recent paper led by Dr Pieter Pauw of Eindhoven University of Technology, shows various metrics that have been considered to identify new donors for the NCQG.
These include how countries are identified under various international treaties, measures of emissions and wealth, membership of powerful institutions and willingness to contribute to global development funds.
There are 50 non-contributor countries that tick two or more of these boxes, with a handful of relatively wealthy or large nations scoring the highest. (As with any attempt to identify new contributors, this ranking relies on subjective criteria. It scores all of these factors equally without making a judgement of how important they are, and countries are ranked in the order they appear in the study).
Non-contributor countries that meet a selection of potential criteria for contributing to the NCQG. Criteria include how countries are defined under various international treaties, including the UNFCCC, the Montreal Protocol and the Convention on Biological Diversity. Other criteria include different measures of higher CO2 emissions or gross national income (GNI) than the median Annex II country; membership of powerful institutions (EU, OECD, G20); and “significant” (greater than $5m) contributions to global climate, environment and development funds. Source: Adapted from Pauw et al. (2024).
Most proposals for identifying new contributors consider a country’s ability to pay – measured using gross national income (GNI) – and its responsibility for climate change, often based on historical emissions. Nations such as Canada and Switzerland have proposed a new system for determining climate-finance donors, based on this kind of data.
Yet different versions and combinations of these metrics can yield very different results. Focusing on total emissions and economic status generally throws up a selection of large, emerging economies, including China, India, Russia and Brazil.
However, many analyses include some variation of per-capita emissions and income, to ensure a “fairer” representation that does not penalise countries with large populations.
Such calculations suggest that small, wealthy fossil-fuel producers, including the United Arab Emirates, Qatar and Kuwait, and small, high-income nations, such as Israel, South Korea and Singapore, should contribute to climate finance.
But outcomes can vary significantly, even when accounting for per-capita measures. The best example of this is China, which is the consistent focus of developed-country efforts to expand the contributor list.
Some assessments identify China as an obvious candidate for future contributions – and one that could make a big difference to total spending. Analysis by the Centre for Global Development (CGD) suggests, based on methods that take per-capita metrics into account alongside other factors such as aggregate GNI, that China should contribute up to around 7% of climate finance.
However, if comparability with Annex II countries is considered important when measuring per-capita historical emissions and income, as in analysis by the thinktank ODI, the results are very different. China still ranks far below any of the current developed countries that provide climate finance on these measures.
In fact, the charts below, based on WRI figures, show that major climate finance contributors still largely surpass emerging economies on both per-capita historical emissions from fossil fuels and industry, and per-capita GNI. (These rankings remain roughly the same if land-use emissions are included, although Russia rises higher in the list.)
Given this, the ODI concludes in its analysis that demands for China to become a contributor have “dubious” scientific basis and are “based on geopolitics, particularly China’s status as global power and international financier”.
All of this is further complicated by the fact that many relatively wealthy countries that are not obliged to provide climate finance, including China and South Korea, already contribute climate-related aid and other funding that could be classified as climate finance.
Yet there is resistance from nations such as China to formally classifying their activities as “climate finance” under the UN. Doing so could result in them facing more scrutiny and accountability.
It could also have great political significance given the long-standing division between “developed” and “developing” states in UN talks. This “firewall” was partially broken down with the Paris Agreement, which compelled all countries to set their own “nationally determined contribution” to climate action, but has remained in place for climate finance.
Charlene Watson, a senior research associate at the ODI, says developed country officials argue that having more countries on board makes it easier for them to persuade their treasuries to release more climate finance. However, she questions the value of insisting countries that already provide climate-related funds are included in the UN system:
“My view is that the cake is not going to get any bigger in the short term. It’s just going to be that we can better see the size of the cake.”
Pauw says there is a need for more nuance, including a new category of “net recipients” that both give and receive climate finance. He says coming up with a new list of contributors may be too difficult:
“Whatever you push forward as an idea is arbitrary. There will always be countries who say ‘we cannot agree to this’ – which means that you will not reach agreement.”
One compromise that has been proposed is to introduce different contributor bases for different “layers” of the NCQG, if countries agree on a “multilayered” goal.
That way, China and others might not be responsible for contributing to the “new $100bn” part of the goal, but may be covered by another layer. (See: What sources of money should be included in the NCQG?)
Meanwhile, Vernoit says poorer developing countries are “extremely wary” of the contributor base discussions, as any ambiguity over who is obliged to provide climate finance could hamper its provision. “Accountability is why burden-sharing frameworks and differentiated lists, like the Annex II list, are important to poorer recipient countries,” he explains.
What sources of money should be included in the NCQG?
Another highly contentious issue in the NCQG negotiations is what types of finance should feed into it. This inevitably influences the discussion of how big the goal could be.
The $100bn target is already fairly broad, covering finance “from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance”.
This in itself is controversial, with civil society groups and developing countries often arguing that the goal relies too much on low-quality finance, such as non-concessional loans. Nevertheless, the NCQG has the potential to be even broader.
Developed countries argue that expanding the scope, with a focus on private investment and gearing the entire financial system towards climate action, is the only way to raise the trillions of dollars of money required.
These wealthier nations generally want the goal to be “multilayered”, with a large outer layer consisting of “global investment flows for climate action”. The framing is important, as it could refer to all kinds of money being spent everywhere – not only in developing countries – including investments made by the developing countries themselves.
The developed nations also propose a smaller sub-goal within this investment layer, more aligned with traditional “climate finance”, which consists of finance “provided” and “mobilised” for developing countries.
(Here, “provided” is understood as referring to climate finance given by one country to another, while “mobilised” refers to private investment that comes as a result of public money “de-risking” investments and getting projects off the ground.)
This approach could make a big difference to how much money these countries would be obliged to provide. For example, an EU submission describes an “investment” goal in the trillions, in contrast to a “provided and mobilised” goal in the billions.
In addition, developed-country statements have stressed the “important role of the private sector”, the need for “reforming the multilateral financial architecture to further unlock climate finance” and the role of “innovative financial instruments” to raise more money.
By contrast, many developing countries have argued for a single goal that channels high-quality climate finance from developed countries to them in a reliable way.
In practice, this means developing countries want as much of it as possible to come in the form of grants from developed countries’ public coffers. The Arab Group has suggested that at least $441bn of the $1.1tn in annual climate finance it has proposed should come from developed-country grants.
All of this speaks to a central tension about the significance of two articles in the Paris Agreement. Article 9 states that developed countries are obliged to provide climate finance to developing countries and others are encouraged to do so voluntarily. Article 2.1c, meanwhile, calls for all “financial flows” to be aligned with the agreement’s goals.
As the WRI diagram below shows, developing countries want to keep the NCQG talks focused on Article 9, whereas developed countries say both articles should be covered. Developed countries, such as Japan, have said that they think Article 2.1c also justifies expanding the contributor base. (See: Which countries will contribute to the new target?)
Pauw of Eindhoven University of Technology tells Carbon Brief that this comes down to a fundamental difference of opinion on what climate finance is and should be.
On the one hand, the world needs to channel as much money as possible into tackling climate change and, on the other hand, there is the question of transferring money from developed to developing countries – often framed using the language of climate justice. He says:
“You can’t mobilise a lot of money if you provide everything in grants. So those two motivations seem to clash, and it’s important to understand that both of them are relevant, both of them are important and both of them need to be realised.”
The wording below from the proposed “draft negotiating text” released ahead of the COP29 negotiations shows the main options on the table for the NCQG.
Option 1 broadly captures ideas proposed by developing countries, while option 2 captures the layered “annual investment goal” presented by developed countries.
There are practical reasons for developing countries wanting to avoid certain types of finance in the NCQG.
Some global-north leaders have framed private finance as essential for meeting the needs of developing countries. For example, when asked about climate finance, former US climate envoy John Kerry repeatedly stated that “we don’t have the money”, arguing that the key would be to encourage more private capital into climate-related activities.
Yet the amount of private climate finance “mobilised” by developed countries remained virtually unchanged at around $14bn each year between 2016-2021, only increasing significantly to $22bn in 2022. (This is based on OECD data for private finance with a clear causal link to a donor country sending development finance to a project.)
Private investment is also far less likely to flow into the poorest countries, many of which are the most in need of climate finance. It is often viewed as unsuitable for many climate-adaptation projects, which are less likely to generate profits than mitigation work such as clean-energy projects.
Moreover, while national governments are within the remit of the UNFCCC and the Paris Agreement, private companies and other financial actors, such as banks, are not. This could make it more risky to rely on them to meet the NCQG.
There are also strong calls from many developing countries to exclude “non-concessional” loans – provided at or near market rates – from climate finance altogether.
Since 2016, around 70% of public climate finance has been delivered in the form of loans, with Japan, France and Germany, as well as MDBs, providing most of their contributions in this way.
UN figures suggest that at least one-fifth of reported loans are “non-concessional”, resulting in wealth flowing back to the donor countries as loan repayments and interest, according to a Reuters investigation.
Many of the poorest countries are spending more on servicing debts than they receive in climate finance, according to the International Institute for Sustainable Development.
These debates form part of a wider discussion around the “quality” of finance.
Developing countries want finance to be predictable and accessible, especially given the complications they often face when obtaining it from MDBs and large funds.
For their part, developed countries are more likely to emphasise the need for “effective” climate finance – meaning funds that are used for their intended purposes and have a climate impact.
What kind of activities will the NCQG support?
Finance for climate action is divided into broad categories, depending on its main purpose. The $100bn target supports two types of activities: those that cut emissions – mitigation; or those that help countries adapt to climate change.
Now, there is pressure from most developing countries to include loss and damage as a “third pillar” in the NCQG. This would enshrine support for the victims of climate disasters as an official component of the international climate finance goal, for the first time.
After years of fraught negotiations, developing countries secured a “win” last year with the launch of the loss-and-damage fund at COP28.
However, contributions to the fund have been small compared to the scale of climate-related damages, which are estimated to reach $447bn-894bn per year by 2030.
Some developing countries would like to see NCQG sub-goals in order to ensure there is ring-fenced funding available for adaptation – which remains poorly resourced compared to mitigation – and for loss and damage. This would involve percentages of the overall target being assigned to each of the three pillars.
Sherri Ombuya, a consultant at Perspectives Climate Group, tells Carbon Brief that there has been some convergence between parties on the general idea of increasing adaptation finance. “This builds on some existing positions that have already taken place within the broader negotiation space,” she says.
(Developed country parties have already pledged to double adaptation finance from 2019 levels by 2025, for example.)
However, developed countries broadly do not want to incorporate loss and damage under the NCQG. They argue that, while a fund for loss and damage finance has now been established, contributions to it are voluntary and not part of the NCQG mandate.
Moreover, Article 9 of the Paris Agreement only refers to climate finance for “mitigation and adaptation” – and the Paris “decision text” that mandates the NCQG does the same.
Developing countries argue that including loss and damage in the NCQG is nevertheless valid, because Article 8 of the Paris Agreement separately “recognises” the importance of “averting, minimising and addressing” loss and damage.
They also see room for the climate-finance goal to expand over time, to reflect the changing needs of developing countries, in line with the Paris Agreement requirement that “efforts of all parties will represent a progression over time”.
How long will countries have to meet the NCQG?
Parties at COP29 must also agree on the timeframe for the provision of climate finance under the NCQG, as this was not specified in Paris.
A key source of conflict concerns whether the target should cover a shorter period of around five years or a longer one of 10 years or more.
Some developing party groupings, including the LMDCs and the Arab Group, have expressed a preference for a five-year goal covering the period from 2025-2030, with the same amount of money – roughly $1tn – provided every year.
An advantage of having a shorter timeframe could be that it gets money moving faster. Supporters also stress the importance of a “revision” or “review” process once the five years are up, in order to adequately reflect “the evolving needs of developing countries”.
Other developing countries, including AOSIS and the Least Developed Countries (LDCs), have supported a 10-year timeframe, but with some kind of review after around five years.
Some parties and civil-society groups have pointed out that a five-year timeframe aligns with existing processes for monitoring progress under the Paris Agreement.
Both the global stocktake and national climate plans – known as “nationally determined contributions” (NDCs) – run on five-year cycles and could, therefore, feed into a review of the NCQG goal.
In an assessment of the NCQG, the World Resources Institute (WRI) notes that, while there are advantages to revisiting the target, “reopening negotiations on the NCQG during revision cycles has the potential to cause additional delays and complexity”.
Meanwhile, developed countries including Switzerland and the EU favour a 10-year timeline.
Notably, they have suggested that the NCQG will be achieved “by 2035”. This leaves room to gradually scale funding up over time rather than achieving it up from 2025 onwards, meaning less immediate pressure on contributors.
How will progress towards the target be reported and tracked?
There is general agreement that a workable NCQG requires a system where governments and other institutions report their climate finance transparently. Only then can progress towards the goal be tracked – and contributors held accountable.
As it stands, there are fundamental gaps in the system for tracking climate finance.
Despite being agreed upon in 2009, there was no official UN system in place to track progress towards the $100bn goal until the Standing Committee on Finance (SCF) was tasked with doing so in 2021 – one year after the goal was supposed to have been delivered.
This does not mean that no one has been reporting climate finance. Developed countries have to produce reports for the UNFCCC every two years, which must include the finance they have channelled into developing countries, both directly and through multilateral institutions.
Developed countries also submit information about climate-related spending to the OECD, which publishes its own assessments of climate-finance progress. (In addition, the OECD served as the de facto tracker of progress towards the $100bn goal.)
Meanwhile, NGOs – particularly Oxfam – have produced regular analyses of climate finance.
Crucially, these assessments arrive at very different estimates of how much climate finance has been provided to developing countries. This is partly because there is no widely accepted definition of “climate finance” in the UN climate process.
Nations are allowed to come up with their own definitions of what counts, as well as their own methodologies to track, measure and report it to official bodies. “This results in challenges in aggregating data on climate finance,” according to the SCF.
The lack of clarity around climate-finance figures has contributed to a “continuous erosion of trust between parties in international climate negotiations”, according to one paper.
Real-world implications include governments inflating the amounts they have given and labelling questionable funding for everything from coal to hotels as climate finance.
So far in the NCQG discussions, there has been a broad consensus that the enhanced transparency framework (ETF) is the best way to report on progress. The ETF is a system set up under the Paris Agreement, which requires most parties to submit information about their climate progress in biennial transparency reports (BTR) from the end of this year.
However, the ODI’s Watson tells Carbon Brief that even if this is agreed there will still be plenty to discuss in the NCQG transparency negotiations:
“The ETF just captures reporting from countries…The more we start talking about whether other sources [of finance] count, or how to capture finance from purely private actors, they’re obviously not covered by the BTRs that come out of the ETF. So what else do we need to know?”
These discussions are, therefore, tied to the question of which sources feed into the NCQG and also which countries contribute towards the goal.
Developing countries have fewer reporting obligations under the ETF and there may be pressure on them to report more if the contributor base is expanded, Watson says.
As for tracking the resulting figures, some parties have suggested the SCF should be given this task. Governments may prefer to opt for a UN committee rather than leaving the task to an NGO or external international body, but this may still face opposition.
Finally, despite the apparent convergence between parties on some of the transparency requirements, there is far less agreement on the need to define “climate finance”.
The G77 and China group of developing countries has pushed for such a definition, calling for non-concessional loans and “non-climate specific finance” to be excluded.
Many developing countries stress that climate finance must be defined as “new and additional”, in line with the language used when the $100bn target was set and in the original UNFCCC treaty. This is broadly understood to mean money that comes on top of other obligations.
However, developed countries provide much of their climate finance from their aid budgets and studies suggest that much of this is not “new and additional”.
Given the impact it could have on their finances, developed countries have strongly resisted a strict definition. Perspectives Climate Group’s Ombuya tells Carbon Brief that, while she thinks it is possible that parties could converge on excluding some types of finance from the NCQG, “I feel that to have a successful outcome, it’s likely that parties will have to have a willingness to do without a common definition on climate finance”.
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COP29: What is the ‘new collective quantified goal’ on climate finance?
Türkiye and Australia risk losing their credibility as hosts of this year’s COP31 UN climate summit if they keep betting on fossil fuels at home, climate policy experts have warned.
As governments are expected to continue fraught talks over how to advance the global transition away from oil, coal and gas in Antalya this November, both of the co-host countries are pursuing fossil fuel expansion at home, without a national timeline to phase out their use.
Türkiye has accelerated its rollout of wind and solar energy in recent years. But that progress has yet to make a dent in the country’s dependence on fossil fuels for power, as demand growth has outpaced the renewables build-out, new analysis by Climate Action Tracker (CAT) has found.
The share of electricity generated by burning coal and fossil gas – 56% in 2025 – has barely changed since 2019, and total fossil fuel use in the power sector, and the emissions it produces, are still rising, according to the report released on Friday.
The Turkish government has also signalled that fossil fuels will remain a central component of its energy mix and has outlined plans to expand the country’s burgeoning domestic gas production in the Black Sea.
‘Need to demonstrate seriousness’
Australia, which will chair the Antalya negotiations, relies on fossil fuels for over 60% of its electricity, with coal alone still supplying 45%. According to experts, it lacks an ambitious plan to shift away from fossil fuels at home, relying heavily on carbon offsetting to reach its climate targets.
Australia is also the world’s third-largest fossil fuel exporter and has plans to expand its coal and gas production, which is backed by significant government subsidies. It recently upset climate groups by approving an extension of the Saraji open-cut coal mine in Queensland.
Türkiye says it has “final decision” at COP31 despite Australia running negotiations
Jennifer Morgan, a senior fellow with the Fletcher School of Law and Diplomacy at Tufts University and former climate envoy for Germany, said Türkiye and Australia need to demonstrate their seriousness about their COP presidency roles by leading by example on the energy transition.
“They have made progress in renewable energy,” she told reporters this week. “But I think their credibility – and their ability to therefore bring momentum and good outcomes to the COP – will depend on their taking further action at home.”
Türkiye’s electrification homework
The co-hosts’ fossil fuel policies are being scrutinised in the run-up to the annual UN climate summit, with much riding on the signal climate diplomacy sends on the energy transition.
Türkiye has so far stopped short of putting any overt political capital behind the fossil fuel transition itself. It has instead been rallying support for a new global electrification target of 35% by 2035, seen as the centrepiece of this year’s non-negotiated Action Agenda put forward by Ankara.
COP31 president Murat Kurum said last week the push to electrify economies – through measures like electric vehicles and heat pumps – will “automatically” lead to a reduction in the use of fossil fuels.
Türkiye’s own energy plan projects the country’s electrification rate would fall short on the global target and only hit 25% by 2035, according to the CAT report, which called for a “substantial step-change” in electrification policies and the deployment of more renewable power and grid infrastructure.
Coal still dominant
CAT’s analysts also warned that, without a parallel phase-out of fossil fuels, rising electricity demand risks being met in part by coal and gas, failing to deliver the emissions reductions the electrification target is meant to achieve.
Türkiye has had some success in its clean energy build-out: the share of electricity generation from wind and solar rose to 22% in 2025, up from 12% in 2020, according to the CAT report.
But coal’s role in Türkiye’s electricity mix has also grown, in both its share and absolute terms, over the past decade. And while reliance on fossil gas has declined overall, it still plays an important role in Ankara’s energy policy, which is pushing to boost domestic gas production in the Black Sea.
Dr Niklas Höhne from the NewClimate Institute said the government could demonstrate leadership as COP31 president by building on its recent successes in increasing its renewable energy capacity and announcing targets and plans to phase out coal and gas ahead of the summit.
According to CAT, Türkiye should phase out coal by 2040 and fossil gas by 2045 at the latest to align its power sector with global efforts to limit the rise in global temperatures to 1.5C above preindustrial times.
Türkiye quiet on fossil fuel roadmap
Ümit Şahin, coordinator of climate change studies at the Istanbul Policy Center (IPM), said Türkiye’s strategy is to approach the fossil fuel debate exclusively from the “end-use point of view”.
“I don’t expect any push from the Turkish presidency to the producer countries in terms of fossil fuel production,” he told reporters.
Neither does Şahin believe the Turkish presidency will throw its political weight behind another big-ticket item for COP31: a new global roadmap to transition away from fossil fuels.
Brazil took on the responsibility to voluntarily draft this document outside of the formal negotiations as a way to break the deadlock at last year’s UN summit in Belém when governments clashed over whether to develop one.
The outgoing COP30 presidency will deliver the roadmap in early November – but it will be up to Türkiye and Australia to guide countries towards a decision on how the blueprint will be taken forward, either inside or outside the negotiations.
Leadership needed
Australia’s Chris Bowen, COP31’s president of negotiations, promised to lobby producing countries to deliver a “meaningful step forward” on the fossil fuel transition in an interview with The Guardian earlier this year. But he has been quiet on the role Australia sees for the fossil fuel transition roadmap.
Natalie Jones, senior policy advisor at the International Institute for Sustainable Development (IISD), said the COP31 co-presidents “must provide clear leadership” on this process.
“This roadmap cannot be left in a dusty drawer,” she told journalists. “Rather, it must be translated into action, with all countries identifying what elements they can adopt or develop in their own national roadmap.”
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Like Türkiye, Australia has yet to produce a national blueprint for winding down coal, gas and oil. Rather than moving toward a phase-out, state and federal governments have kept expanding fossil fuel licensing over the past year, according to a new analysis published this month by Climate Analytics.
Under existing policy, both coal and gas are on track to remain in Australia’s power system as late as 2050 – a trajectory the report defines as incompatible with the 1.5C limit the country says it’s committed to.
No binding end dates for the Netherlands
Analysts are watching out for national transition roadmaps as a bellwether for governments that claim to be leaders in the global shift away from fossil fuels.
The Netherlands, which co-hosted the first fossil fuel transition conference in Santa Marta this year, published its own domestic roadmap earlier this week. The document followed through on a pledge that “leadership on transitioning away from fossil fuels must be backed by concrete action, not just ambitious words”, said a spokesperson for Stientje van Veldhoven, the Dutch minister for climate policy.
But experts criticised the plan for failing to set a binding end date for the country’s fossil fuel production and use. While targeting a rapid increase in renewables capacity, the Dutch government only commits to phasing out oil, gas and coal “in the energy and feedstock system to eventually zero, and to minimise fossil use” by 2050.
Yvo de Boer, a former Dutch diplomat and executive secretary of the UN climate body, said the Dutch roadmap falls short of what’s needed to give industry the confidence to deploy capital in support of the energy transition with greater predictability.
“Ultimately, a roadmap without deadlines is nothing more than a footpath paved with good intentions,” he added, writing on LinkedIn.
The post Fossil fuel expansion threatens COP31 hosts’ credibility, experts warn appeared first on Climate Home News.
Fossil fuel expansion threatens COP31 hosts’ credibility, experts warn
Despite millions of dollars in grants and technical help for African businesses to power farming and other food production activities with renewable energy, most efforts remain stuck at the early stages because they struggle to find the investors, markets and expertise they need to grow.
This was the message from a coalition of global institutions working on energy, water and agriculture at this month’s Africa Food Systems Forum in Kigali, Rwanda.
“Energy, agriculture, water and nutrition actors rarely design solutions together,” the Agri-Energy Coalition said in a Call to Action on powering food systems with clean energy.
Using more renewables – especially solar power – to drive food systems would reduce food losses, ensure year-round availability and affordability of healthy foods, and improve productivity, income and resilience among farmers, food processors and other small enterprises, the coalition added.
In an interview with Climate Home News at the forum, Olamide Niyi-Afuye, CEO of the Africa Minigrid Developers Association (AMDA) – a body representing private-sector developers of small-scale, off-grid electricity systems across the continent – said its members are starting to recognise this interdependence and are increasingly considering businesses that combine energy with agricultural activities.
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This, Niyi-Afuye added, could lead to greater supply and use of clean power for key processes like irrigation, food processing and storage, creating new sources of revenue for both sectors.
CHN: Conversations at the Africa Food Systems Forum highlighted how organisations working in energy and agriculture often operate in silos. What has hampered their collaboration, and how has that affected Africa’s economic development?
A: Most mini-grid companies in Africa were primarily incentivised to achieve connections. If you look at some ongoing projects, you see a cost-per-connection model [of revenue]. When a subsidy is tied to achieving a connection, regardless of whether it is a productive connection, you might not notice the problem until five years down the line, when you realise the cash flows are not what you projected.
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So now we’re in a “come-to-Jesus moment” as an industry, where we’re righting the wrongs and adjusting our business models to make sure companies do not go bust and there is some level of sustainability over the long term.
The saying is not wrong that we’ve been working in our own silos because we’ve focused on the smaller things instead of the helicopter view. There needs to be cross-pollination [between the energy and agriculture sectors] because, if we are thinking about industrialisation, energy is a key driver of industrialisation. We will not achieve that if we’re not in the room and part of those conversations.
CHN: Productive use of energy is intended to ensure electricity access goes beyond lighting homes to improving livelihoods, creating jobs and powering equipment. But what happens when farmers cannot afford the equipment they need to do that? How can energy, agriculture and equipment players work together to make the transition more accessible?
A: That’s why we’re having conversations with companies set up to de-risk the agriculture sector. By leveraging that connection, we’re able to aggregate potential energy needs and develop instruments that make equipment more affordable through bulk procurement.
We can have arrangements that make it easier for farmers and food producers to lease equipment and eventually own it over a period. There’s no real pressure to recover the capital very quickly because you’re looking at scale.
There is a whole lot across the agricultural value chain that needs energy, from farming and harvesting to food processing and value-addition. We need to understand the energy needs across the value chain and bring our members in to provide solutions.
Developers do not necessarily need to provide every productive-use solution themselves. They can partner with equipment suppliers, financiers, agribusinesses and other service providers to enable customers to use electricity productively. The objective is simple: do not just electrify communities; enable economic activity that uses that electricity.
CHN: When Africa’s industrialisation is discussed, you hear things like renewables cannot provide enough baseload, while some food processors are sceptical about switching to renewable energy because of these concerns about reliability. What is your response?
A: It’s not a controversial statement to say that a typical baseload is usually from the grid, and it’s usually from multiple sources including renewable energy. For large-scale operations, we can look at blending multiple sources of energy. But how do we solve the problem of a mid-sized farmer? We can solve it with a mini-grid using renewable energy.
Comment: Every country needs a model to help optimise its energy transition
If you go to a small farmer in a rural area, they don’t care about what source of energy they’re getting. They just want something that can help them get from A to B. If you look at the direct energy needs of farmers and food processors, I’m sure 90 percent of their consumption can be solved by renewable energy. Let’s start with that problem first. Then, as they scale, they might need to ramp up, and we can start talking about a bigger baseload.
CHN: How much agricultural value is lost because farmers and food businesses lack reliable, affordable electricity?
A: If you look at, for example, the fact that we need to maybe plant tomatoes or strawberries in Jos before it gets to Lagos [Nigeria], which most likely is by road, I can assure you that a good chunk, if not stored properly, would be bad by then. So the fact that we do not have energy is in itself a lost opportunity to maximise the potential of the agriculture sector. So until we’ve solved the energy problem, we will not salvage waste – and for me that is a lost opportunity.
CHN: AGRA, an institution focused on scaling agricultural innovations to help smallholder farmers, estimates a massive shortfall between current investments in the continent’s food systems and what is actually needed to build a resilient, profitable agricultural economy – to the tune of $180 billion per year. Can integrating energy into food systems help bridge that gap?
A: Yes – if energy can help unlock the potential to earn more money, investors will follow the money. Investments go where there is certainty, and until there is certainty around cash flow and revenue, investment will be limited.
My vision is to see more Power Purchase Agreements (PPAs) being signed between energy players and the agriculture sector. We can start by getting people into the room, understanding their pain points, crafting a framework and documentation that works for both parties, and then seeing deals happen.
This interview was shortened and edited for clarity.
The post How clean energy can boost business for Africa’s food producers appeared first on Climate Home News.
How clean energy can boost business for Africa’s food producers
Cristina Rumbaitis del Rio is a senior advisor on adaptation and resilience with the United Nations Foundation and Mattias Söderberg is global climate lead at Danish NGO DanChurchAid.
Recent extreme events – from wildfires and heatwaves in Europe to flash flooding following a glacier collapse in Nepal – have shocked and devastated communities, bringing years of warnings about such climate impacts to the doorstep of communities around the world.
One thing is certain: the new climate reality is here – and the adaptation strategies designed for yesterday’s world are no longer sufficient.
Attribution science has since shown that the hotter and more frequent heatwaves we’re experiencing around the world would have been virtually impossible without today’s high concentrations of greenhouse gases in the atmosphere. Climate shocks are now so severe that they reverberate through supply chains, food and water systems, financial markets and the movement of people.
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They must be a catalyst for a new way of thinking about adaptation and resilience, and how we finance solutions that work. A failure to invest in adaptation in one region can create costs far beyond it, which is why the concept of shared resilience is critical for leaders to grasp.
Investment not charity
At the UN General Assembly (UNGA 81) this month, leaders have an opportunity to translate today’s urgency into concrete commitments on adaptation and loss and damage finance ahead of COP31.
Those commitments are needed to underpin global stability, shared prosperity and human security. Governments should use this moment to show what a new response looks like: finance that reaches communities faster, supports locally grounded solutions, strengthens national systems, and helps countries prepare before the next shock arrives.
If we want sustained economic growth, food and water security, and resilient and prosperous societies across every region, adaptation must be at the heart of today’s development and security agenda. It cannot be just a future planning consideration or a narrow issue for climate ministries. Adaptation is now everyone’s business – and it must be financed fast and fair.
UN Secretary-General António Guterres has repeatedly framed climate finance as an investment rather than charity, warning that “a world in climate chaos cannot be a world at peace” and describing human security as freedom from the chronic and sudden disruptions that climate change multiplies.
What’s more, adaptation delivers a real return-on-investment, with researchers estimating that every dollar invested produces $10 in benefits, saving lives, protecting livelihoods, and reducing the costs of future disasters.
Hitting adaptation limits
The urgency to scale adaptation systematically is growing. The newly released “Limiting Overshoot” report from the UN Environment Programme (UNEP) confirms what scientists have long warned: exceeding global warming of 1.5C is now unavoidable under current policies. Yet, how high temperatures rise – and how long the world remains above the 1.5C threshold – will determine whether communities, economies and entire ecosystems can keep pace.
There are limits to adaptation. When we breach those limits, lives and livelihoods are lost, and people and ecosystems suffer greatly. We cannot simply build yesterday’s infrastructure a little stronger and assume it will be enough.
Nepal flood destruction shows “limits to adaptation”, scientists say
We need to fundamentally change the systems that determine how societies anticipate, absorb and recover from both immediate and evolving non-linear climate shocks. This includes transforming physical systems, such as infrastructure, and the governance systems that affect where and how we live to how we maintain our health and wellbeing.
Finance today is nowhere near the scale of the challenge.
The UNEP “Adaptation Gap Report 2025” estimates the shortfall in adaptation finance in developing countries at $284 billion–$339 billion a year – roughly 12 to 14 times current international public flows of around $26 billion. That gap is a development, economic and human security problem, especially for the most vulnerable populations who have contributed the least to causing the climate crisis.
Building resilience into financial systems
There are already signs of what a more systemic adaptation response could look like. Communities around the world are delivering practical solutions at local level, even as adaptation finance remains notoriously, and appallingly, difficult to access. Cyclone-resistant homes, local forecasting capacities, drought-resistant crops, heat insurance for pregnant informal workers and mangrove restoration are rooted in local knowledge and lived experience, while delivering benefits far beyond the communities where they originate from.
But local innovation alone is not enough; the systems around it need to be resilient too.
Jamaica offers one example. The country has built a multi-layered disaster-risk financing framework, including a catastrophe bond and contingency funds, through sustained fiscal discipline and proactive investment. Its debt-to-GDP ratio fell from around 147% in 2012 to around 62% in 202-25. That groundwork matters when disaster strikes.
Hurricane Melissa’s destruction shows need for climate resilience push
Following Hurricane Melissa, Jamaica was able to secure billions of dollars in reconstruction financing from multilateral banks – finance that might otherwise have been much harder to access. The lesson is clear: resilience can be built into the financial architecture of a country before a crisis arrives. That is the shift we now need to make at scale.
The foundations already exist – in Kingston’s fiscal reforms, in early-warning systems from the Sahel to the Pacific, and in every community that adapted before disaster struck. What is still missing is the political will, and the finance, to take what works and put it to work everywhere, at the speed our world’s new climate reality demands.
To hear more on this issue from high-level officials and experts, sign up for this event during Climate Week NYC, at 8am EDT on September 24 (in person or online), moderated by Climate Home News Editor Megan Rowling: Adapting to the New Climate Reality: Why Accelerating Impacts Demand New Responses.
The post Human security relies on adapting to the world’s new climate reality appeared first on Climate Home News.
Human security relies on adapting to the world’s new climate reality
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