Considerations for a new collective quantified goal: Bringing accountability, trust and developing country needs to climate finance

Article 9 of the Paris Agreement (PA) provides that developed country parties take the lead in mobilizing climate finance based on developing country needs and priorities.

There is a wide range of estimations on the needs and priorities of developing countries, but the flow of finance has fallen far short of all of these assessments. This includes the 2009 political target of $100 billion per year by 2020, subsequently extended to 2025, which has never been reached and was not based on a robust analysis of needed resource.

As per Decision 1/CP21 Paragraph 53, countries decided to deliberate on a new collective quantified goal (NCQG) to raise the floor on climate finance above the current $100 billion annual target, taking into account the needs and priorities of developing countries.

This report explores lessons from the ongoing challenges with climate finance and more specifically the $100 billion goal, proposing a set of considerations and structure for the NCQG to ensure it is an improved target.

Section 1 compares different estimations of developing countries’ financing needs.

Section 2 outlines existing challenges in ensuring climate finance flows respond to the needs and priorities of developing countries.

Section 3 considers design of the NCQG, outlining nine considerations to guide thinking, a simple structure to deliver on these considerations, and quantified targets.

Section 4 builds links between the NCQG and ongoing debates on global economic governance reform, identifying seven transformative elements developing countries can pursue to maximise overall finance flows.

Section 5 offers conclusions in moving forward.

There is strong international agreement on the need to massively scale up financing for developing countries’ climate goals. But understandings of precisely how this is achieved are far from achieving consensus, whether considering a quantum, financing modalities, targeted activities or sources of finance.

This report attempts to clarify some of the key issues around a new needs-based target, supporting Parties to deliver an NCQG consistent with PA commitments, enabling more ambitious climate-resilient development pathways in developing countries, and rebuilding trust for all.