The negotiations around the New Collective Quantified Goal (NCQG) on climate finance at COP29 underscore the intricate balancing act required to address global climate needs equitably. As countries debate ambitious targets, one thing is clear: the NCQG must be more than a number. It must be a transformative framework that reflects the realities of climate vulnerabilities and developmental aspirations of developing countries.

Bridging Climate and Development

Developing nations, particularly those represented by the G77 and China, emphasize that the NCQG must align with the principles of equity and Common but Differentiated Responsibilities (CBDR). With a proposed target of $1.3 trillion annually, the NCQG aspires to address the scale of needs. However, it’s not just the quantum but the quality of finance that matters. Many developing countries, including AOSIS and LDCs, call for grant-based financing to avoid exacerbating debt burdens. Climate finance must not force nations to choose between climate action and economic development.

Countries like Kenya highlight the inadequacies of previous goals, such as the $100 billion commitment, which fell short in addressing transparency, accessibility, and double-counting issues. They stress that NCQG should be additive, predictable, and grant-based, ensuring climate finance does not perpetuate historical inequities or foster dependency on non-concessional instruments.

Addressing Loss and Damage

A recurring theme in these discussions is the inclusion of loss and damage. Vulnerable nations such as Nepal and Bangladesh, facing devastating climate impacts like floods and glacial melts, emphasize the importance of grant-based finance specifically allocated to loss and damage. These funds must be additional and distinct, reflecting the unique challenges posed by irreversible climate impacts.

The debate on regional allocation floors also gains traction. Small Island Developing States (SIDS), with their unique vulnerabilities, call for specific minimum allocations, arguing that lumping all developing nations under a single target risks underrepresenting the dire needs of high-risk groups.

Transparency and Accountability

Transparency remains a cornerstone of the NCQG framework. Past experiences have shown that the lack of accountability in climate finance flows erodes trust. Developed nations must commit to robust annual progress updates and ensure that all finance is clearly delineated between grants, loans, and other instruments. Countries like Paraguay and the Gambia advocate for frameworks that ensure grant-based finance is prioritized, with no room for mechanisms that perpetuate fossil fuel dependencies.

Expanding the Contributor Base: A Contentious Debate

One of the most polarizing issues is the question of expanding the contributor base. Developed nations, led by the EU and the US, push for broader participation. However, many developing countries staunchly oppose this, arguing it undermines CBDR principles enshrined in the Paris Agreement. Countries like Saudi Arabia and India caution against using NCQG to dilute historical responsibilities or shift burdens onto emerging economies.

A Path Forward

The NCQG’s success hinges on its ability to strike a balance: ambitious enough to meet global climate goals, yet equitable in its distribution and mechanisms. This means addressing critical thematic areas—mitigation, adaptation, and loss and damage—while ensuring accessibility, transparency, and justice for vulnerable nations.

The road to finalizing the NCQG at COP29 is fraught with challenges, but it offers an opportunity to set a precedent. By prioritizing inclusivity, equity, and ambition, the NCQG can become a cornerstone of climate finance that genuinely supports sustainable development and resilience in the face of an escalating climate crisis.

As negotiations continue, all eyes are on how nations will bridge the gaps in ambition and equity, setting the tone for global climate action in the critical decade ahead.