• In 2009, developed country Parties committed to jointly mobilizing US$100 billion per year by 2020 to address the needs of developing countries (UNFCCC 2009). The goal was formalized in 2010 and later extended through 2025 (UNFCCC 2010, 2015). As of September 2023, this goal had not yet been met.
• In 2015, Parties at the 21st Conference of the Parties (COP21), serving as the meeting of the Parties to the Paris Agreement (CMA), decided that they “shall set a new collective quantified goal (NCQG) from a floor of $100 billion per year, taking into account the needs and priorities of developing countries” (UNFCCC 2016). Deliberations on this new goal started at COP25 (2019), and since then deliberations have taken place through different processes, including submissions, technical expert dialogues (TEDs), and high-level ministerial dialogues (HLMDs) (UNFCCC 2022a).
• This paper lays out a subset of some of the key negotiation topics concerning this new goal. These topics include the quantity of the goal, thematic scope, time frame, who should contribute, and transparency arrangements.

Context

At COP15 (2009), developed country Parties committed to a goal of jointly mobilizing $100 billion per year by 2020 to address the needs of developing countries (UNFCCC 2009). As of September 2023, this $100 billion annual goal had not yet been met, though Germany and Canada provided assurances on behalf of the developed countries that it would be met in 2023 (Federal Foreign Office 2023). Financial flows mobilized to date are also far from what developing countries need to support their climate efforts. In 2020, public climate finance has been channeled mainly in the form of loans (71 percent), which has caused consternation among stakeholders who fear that this will exacerbate financial difficulties for countries already in or at risk of debt distress (OECD 2022).

At COP21 (2015), Parties decided to extend the $100 billion goal through 2025 and to set the NCQG prior to that time. They agreed that $100 billion per year would be a floor for the new goal, thus ensuring that the new goal will be an increase compared to the current commitment. Negotiators also underscored the importance of considering developing countries’ needs and priorities when setting the goal.

In 2021, the process elements for deliberating on the NCQG were adopted, including an ad hoc work program (AHWP) on the NCQG for 2022–24 (see Table 1). Parties must still agree upon many of the actual elements of the goal, including how big the goal should be and how reporting should take place to ensure transparency. The AHWP includes four annual TEDs, annual reports, and regular consultations. Further, when adopting the NCQG process elements, Parties also agreed on submissions from Parties and non-Party stakeholders, HLMDs, and stocktakes, which aim to assess the progress made in 2022 and 2023.

Negotiations on the NCQG are taking place at a moment when climate finance for climate action must increase dramatically to achieve the goals of the Paris Agreement. In all countries, the gap between climate finance in climate action and actual financial flows means that scaled-up efforts will be required to achieve the goals of the Paris Agreement. This is especially true in developing countries, where climate finance requirements remain significant. As of August 31, 2023, 91 developing countries had reported climate finance requirements in their latest round of nationally determined contributions (NDCs), for a total of around $4.5 trillion (Climate Watch n.d.).

About this working paper

This paper aims to provide an overview of the current NCQG discussions. Its purpose is to inform people interested in understanding the process for determining the NCQG and the elements being discussed. This paper does not intend to cover all relevant questions raised during the NCQG process; instead, it focuses on five core elements of the negotiations. It also does not intend to take a position on what the NCQG should include and be based upon. Rather, it seeks to help facilitate a clearer understanding of the NCQG deliberation process.

The analysis is based on a literature review and on inputs gathered from United Nations Framework Convention on Climate Change (UNFCCC) convenings. The author analyzed all Party and non-Party stakeholder submissions to the UNFCCC pertaining to the NCQG. This analysis was complemented by information gathered through the TEDs, reflection notes released by the cochairs following each TED, reports and NCQG-related convenings organized by research organizations, and the HLMD summary prepared by the COP28 Presidency.

This paper does not delve into issues related to the political or economic situation of each country, an exhaustive assessment of all climate finance needs, or all the options within each element. Instead, its goal is to streamline and clarify the five key points of NCQG deliberations, based on the literature analysis:

• What should the quantity of the NCQG be, and what role should the quality of finance play? To answer this question, we must understand what it means to take “into account the needs and priorities of developing countries” (UNFCCC 2016) and how these issues might impact the final number as well as the relationship with quality of climate finance.
• What should the goal fund? This question seeks to address the thematic scope in terms of mitigation, adaptation, and loss and damage. Though some have also raised the issue of financing just transitions, this has not been addressed here pending discussions under the purview of the Work Program on Just Transitions Pathways.
• What time frame should the goal cover? This includes determining if the goal should, like the $100 billion goal, be one set amount for a particular time frame or should consist of milestones that can be continuously updated on an agreed time frame based, for example, on developing countries’ needs and science data.
• Who should contribute to the NCQG? This question seeks to address why certain countries have proposed expanding who can contribute to the new goal, based, for example, on their level of greenhouse gas emissions or wealth.
• What type of transparency arrangements should accompany the goal? This question asks whether and how transparency arrangements can be implemented to adequately track and monitor the goal’s progress.

The NCQG will be part of a complex climate finance architecture under the UNFCCC. To understand the discussions of different elements of the NCQG, it is useful to understand the links between the NCQG and the key aspects of the broader UNFCCC climate finance landscape.

State of play of the $100 billion goal context and challenges

In 2010, Parties at COP16 adopted the Cancun Agreements, which included two key climate finance goals. First, through the fast-start climate pledges, developed countries pledged to collectively provide around $30 billion between 2010 and 2012 to support developing countries’ climate efforts to reduce their greenhouse gas (GHG) emissions and adapt to the impacts of climate change. Second, developed countries committed to a collective goal of mobilizing $100 billion per year by 2020 to address the needs of developing countries. The target date of this goal was later extended through 2025 at COP21 (UNFCCC 2016).

More than 10 years later, the Glasgow decisions at COP26 (2021) acknowledged with “deep regret” that developed countries had failed to meet their goal to jointly mobilize $100 billion per year by 2020 (UNFCCC 2021a). Ahead of COP26, the incoming UK COP26 Presidency asked Canada and Germany to produce a delivery plan on how and when developed countries would meet the $100 billion goal, which was published in October 2021 (COP26 Presidency 2021). Based on forward-looking data voluntarily provided by developed countries and multilateral development banks, as well as a technical note developed by the Organisation for Economic Co-operation and Development (OECD), the delivery plan projected that developed countries would reach the $100 billion goal in 2023. The delivery plan was produced outside of the formal climate negotiation process, as an ad hoc exercise to take stock of the $100 billion goal at COP26 (Bos and Gonzalez 2022). The plan did not provide a breakdown of how much each developed country was expected to contribute or an in-depth assessment of the qualitative aspects of climate finance provided, nor did it reference the shortfalls on the $100 billion goal; instead, it listed guiding principles for collective action that argued for improvements in the quality of climate finance (COP26 Presidency 2021).

A year later, in October 2022, Canada and Germany released the Climate Finance Delivery Plan Progress Report on developed countries’ plan to fully deliver on the $100 billion goal (ECCC and Federal Foreign Office 2022). This progress report reconfirmed that developed countries planned to meet the goal by 2023, with similar limitations in data and commitments as found in the 2021 delivery plan. In a letter released in September 2023, Canada and Germany again restated their analysis that the $100 billion goal would be reached in 2023 (Federal Foreign Office 2023).

COP26 also mandated that the Standing Committee on Finance (SCF) prepare a status update on the $100 billion goal, which was released ahead of COP27 (SCF 2022). The SCF was established at COP16 to assist the COP with, among other things, improving coherence in the delivery of climate financing and reporting on funding flows. This is the first time the SCF has had the mandate to consider accountability for the $100 billion goal (Bos and Gonzalez 2022). The mandate from COP26’s decision on long-term finance states that the SCF assessment must address the needs of developing countries and consider the delivery plan and other relevant reports (UNFCCC 2021a). The assessment flagged, among other things, that the mandate for the $100 billion goal did not identify accounting methodologies and lacked definitions to measure flows or assess efforts on addressing developing countries’ needs.

NCQG state of play: The start of formal deliberations and procedural milestones

In the decision adopting the Paris Agreement at COP21, Parties agreed that the NCQG would be set by 2025. Parties also agreed that the NCQG would be “from a floor of USD 100 billion per year in the context of meaningful mitigation actions and transparency of implementation and taking into account the needs and priorities of developing countries”(UNFCCC 2016).

At COP26, Parties decided that NCQG deliberations would take place between 2022 and 2024 and focus on the following process elements: an AHWP, submissions by Parties and non-Party stakeholders, HLMDs, and stocktakes (see Table 1).

The AHWP is facilitated by two cochairs—one from a developed country and one from a developing country—and includes four TEDs per year, annual summary reports covering outcomes from the TEDs, and consultations with key bodies and stakeholders. The outcomes of the AHWP serve to inform the HLMDs, stocktakes, and the NCQG negotiations, which take place under the CMA. The 2022 AHWP and the process elements of the NCQG deliberations have allowed those involved in the conversations to identify key issues relevant for determining the NCQG, particularly the main elements and different Party and non-Party views.

At COP27, NCQG negotiations did not move the conversation forward significantly. The COP27 decision focused mainly on procedural issues that could potentially improve future TEDs and HLMDs. No decisions were taken related to the substantive content of the NCQG (Alayza et al. 2022). The cochairs of the AHWP, however, clearly set out a vision for 2023 focused on developing recommendations for the various elements of the goal ahead of COP 28. This will set the scene for the final year of negotiations leading to an NCQG agreement at the sixth session of the CMA.

This section provides an overview of some of the key elements discussed and addressed by Parties and non-Party stakeholders, including the quantitative amount, thematic scope, time frame of the goal, contributor base, and transparency arrangements. This list of elements is not intended to be exhaustive but rather to highlight the recurrent topics raised through NCQG-related discussions and to contribute to conversations about setting a goal by 2025.

What should the quantity of the NCQG be, and what role should the quality of finance play?

What is discussed?

Counting the provision versus mobilization of climate finance

When discussing the quantum of the NCQG, different elements addressed in this paper are also key to untangling the available options to establish a quantity. First, it is necessary to address two terms used in both the Convention and the Paris Agreement as well as in decisions related to climate finance: provision and mobilization. These terms date from the adoption of the Convention (Articles 4.3 and 4.4). Provision of finance refers to funding provided directly by developed country governments, whereas mobilization of finance refers to investments that are crowded in from other sources, instruments, and channels, including private finance or other innovative sources. With the adoption of the $100 billion goal, developed countries once again committed to provide and mobilize resources to meet the goal.

Parties are debating the potential role and scope of the provision versus mobilization of finance, as well as who should be responsible for each. Developed countries have, for example, suggested that Article 9 of the Paris Agreement, which states that developed countries should have leadership in mobilizing resources, should be read in conjunction with Article 2.1c, which states that Parties should make “finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development” (UNFCCC 2016). In this context, these Parties suggest that the NCQG should focus on mobilizing resources by all countries, as a global effort (a notion reflected in Article 9.3); they propose that resources come from various sources—public, private, domestic, international—and consider the solidarity, responsibility, and ability of actors to contribute according to the principles of CBDR-RC (European Union 2023a). Regarding provision, some developed countries have reaffirmed their commitment to provide financial resources to developing countries, especially the most vulnerable. Further, some countries have stated that the contributor base should be expanded (European Union 2023b), for example, based on the economic capacity of other countries to increase the quantity of climate finance provided, particularly high-income economies, excluding those that are highly vulnerable to climate change (Government of Canada 2023) (see “Contributor: Who should contribute to the NCQG?” for more in-depth discussion).

For their part, developing countries have expressed interest in ensuring that the NCQG focuses primarily on the provision of climate finance from developed to developing countries. Based on Article 9, developed countries would be obligated to provide financial flows and to lead the mobilization, and other Parties’ contributions would be based on solidarity and not be perceived as an obligation to increase the provision. Developing countries have mentioned that incorporating Article 2.1c into the goal potentially conditions aid from developed countries unjustly on the alignment of financial flows in their countries. Further, discussions about the incorporation of Article 2.1c need to consider its implementation in the context of sustainable development and efforts to eradicate poverty and in line with the principles of equity and CBDR-RC, in light of different national circumstances as expressed in Article 2.

These interpretations of Articles 2.1c and 9 lead to alternative scenarios for defining the quantum. The new goal could be structured as a quantitative goal with only the provision of finance by developed countries, one goal for the provision of finance by developed countries and one for mobilization by these same countries, one for developed country provision and mobilization together, and a goal for developed country provision and a goal for mobilization from all parties (that includes qualitative aspects such as policy and regulatory frameworks that mainstream climate as a variable to align climate finance through different policies, such as green procurement and climate-related bonds, among others).

Quantum and the needs and priorities of developing countries

The NCQG will have to be determined “taking into account the needs and priorities of developing countries” (UNFCCC 2016). In recent years, various research organizations and private firms have developed both bottom-up and top-down approaches, focusing on adaptation, mitigation, or loss and damage (L&D) and, in some cases, breaking down needs at a sectoral level and by geography. How these approaches may impact the new goal’s quantity remains uncertain.

Nationally determined contributions (NDCs) are one key source of information when determining global climate finance needs. As of August 31, 2023, 91 developing countries had provided estimates of financial need in their NDCs (with cutoff dates between 2025 and 2040) totaling $4.5 trillion. Of this total, $1.6 trillion is conditional on receipt of international support, and $0.6 trillion is unconditional. (The total amounts of conditional and unconditional finance requirements do not equal the total amount of $4.5 trillion because not all countries have disaggregated between their conditional and unconditional finance requirements in their NDCs.)

Studies use different approaches and cover different geographic or sectoral scopes. Several studies use a top-down approach, where estimations use methodologies that link global warming estimates to changes in economic growth and associated damages. Other studies use bottom-up approaches, using estimates directly produced by countries (for example, in their NDCs or national adaptation plans). Where information is not available for a country, studies have extrapolated potential costs. For either approach—top down or bottom up—studies are using different models and methodologies to assess global climate-related investment needs. Integrated assessment models (IAMs) are increasingly used by national governments and in international assessments (Nordhaus 2017). IAMs aim to calculate the impacts of alternative assumptions (e.g., climate policies) on variables such as investments, output, or emissions.

Mitigation finance assessments

As shown in Figure 1, estimates of required global annual spending on mitigation to achieve net zero by 2050 range from $3.5 trillion to $9.2 trillion per year and from $105 trillion to $275 trillion in total by 2050. In these reports, most investments focus on the transition to zero-emission energy sources. Some of these reports also show disaggregated sources of finance (private versus public).

On the higher end, a report by McKinsey & Company provided an estimate covering the energy and land-use sectors based on a relatively comprehensive approach to household and business spending on assets that use energy. For example, it includes the full cost of passenger cars and heat pumps, capital expenditures in agriculture and forestry, and continued spending on high-emitting physical assets such as fossil fuel–based vehicles and power assets. This report found that $9.2 trillion per year, or a total $275 trillion by 2050, would be required for the world to achieve a net zero transition by 2050 (McKinsey & Company 2022).

A report by Vivid Economics (2021), focusing primarily on the energy sector, found that global investments to achieve net zero by 2050 would amount to $4.5 trillion per year or a total of $125 trillion by 2050. Similarly, the Energy Transition Committee and the International Renewable Energy Agency (IRENA) have produced their own estimates of global energy sector investments required to achieve net zero by 2050. The Energy Transition Committee estimates that $3.5 trillion per year, or a total of $105 trillion by 2050, will be required (ETC 2023). IRENA, however, provides an estimate of $5.4 trillion per year and a total of $115 trillion (IRENA 2023). IRENA’s report shows a more dramatic role for the private sector, with $56 trillion in private funding needed by 2030 versus $1 trillion in public funding (IRENA 2023).

Figure 1 | Cumulative and annual mitigation finance

Notes: ETC = Energy Transition Committee; IRENA = International Renewable Energy Agency.

Source: Caldwell and Alayza 2023.

Adaptation finance assessments

In the case of adaptation, most reports base their estimates on a combination of national cost estimates and global top-down cost estimates, and they assume time frames related to expenditures required to achieve net zero by 2050. Some of these reports disaggregate their estimates between developed and developing countries. Reports have found that expenditures required for adaptation can range from $0.05 trillion to $1.1 trillion per year by 2050 globally and from $0.1 trillion to $0.9 trillion per year by 2050 for developing countries, as shown in Figure 2. These reports have relied on different methodologies, including the Adaptation Regional Integrated Model of Climate and the Economy (AD-RICE) (Baarsch et al. 2015), extrapolation (UNEP 2022), and bottom-up estimates (Chapagain et al 2020).

Figure 2 | Annual 2030 and 2050 adaptation finance

Notes: IPCC = Intergovernmental Panel on Climate Change; UNEP = United Nations Environment Programme.

Source: Caldwell and Alayza 2023.

Loss and Damage finance assessments

Related to L&D, costs range from $1.1 trillion to $2.7 trillion per year on average by 2050 under the net zero scenario, as shown in Figure 3. Markandya and González-Eguino (2019) found that global L&D ranged from $1.8 trillion to $2.7 trillion per year by 2050. This report is based on an IAM that applies different discount rates to find low and high damages at a global level. The report uses 2005$ values and focuses only on economic losses. Those costs not covered by adaptation measures are classified as L&D costs (Markandya and González-Eguino 2019).

A subsequent report produced by Heinrich Boll was based on major extreme climate and weather events and the model from Markandya and González-Eguino (2019), updating this from 2005$ values to 2023$ values and removing developed countries (Richards et al. 2023). The latter methodology is used in Figure 3 for comparison purposes. A separate report from Climate Analytics estimated L&D costs based on an IAM model, specifically an AD-RICE model, finding that costs ranged from $1.07 trillion to $1.85 trillion per year by 2050. This report estimated macroeconomic damages in 2012$, and the other two reports estimated residual damages (L&D minus adaptation costs) (Baarsch et al. 2015).

Figure 3 | Annual 2030 and 2050 L&D finance

Source: Caldwell and Alayza 2023.

Setting a numerical figure will not be sufficient; what’s the role of quality?

Parties have also discussed a need to consider other aspects of the finance being provided, such as whether it is in the form of grants or loans. These concepts are usually described as the “quality” of climate finance. Questions remain about the degree to which they will factor into the final quantum of the goal. Nevertheless, Parties are considering different components, including the concessionality, effectiveness, accessibility, and predictability of climate finance (Table 2) (see Cozzi et al. [2022] and Argueta et al. [2022] for a more detailed description of quality aspects).

Certain qualitative components, including accessibility and concessionality, touch upon whether the goal should incorporate language on the types of financial instruments involved. Developing country Parties, in particular, have expressed interest in increasing grant financing or other forms of finance that do not increase the debt burden of countries. They propose this in response to the high levels of debt held by many countries today: 53 percent of low-income countries—23 of which are among the 50 most climate-vulnerable nations globally—are now at increased risk of difficulties in repaying their debts (Alayza et al 2023). In addition to traditional forms of climate finance, Parties have had some early discussion on whether other forms of innovative financial instruments, particularly those instruments that have the potential to increase countries’ fiscal space, can be considered. For example, the Independent Association of Latin America and the Caribbean (Asociación Independiente de Latinoamérica y el Caribe; AILAC) and Argentina, Brazil, and Uruguay (ABU) mentioned in their respective submissions that the new goal should foster the use of innovative instruments such as debt swaps, payment for environmental services, and blended finance (ABU 2022; AILAC 2022).

Regarding access to climate finance, the Paris Agreement emphasizes that the “institutions serving the Agreement, including the operating entities of the Financial Mechanism of the Convention, shall aim to ensure efficient access to financial resources through simplified approval procedures and enhanced readiness support for developing country Parties” (UNFCCC 2016). However, developing countries have been struggling to effectively access climate flows (Argueta et al. 2021). Many developing countries have flagged the difficulties they have faced in accessing funding from the climate funds and similar sources in a timely manner. This includes difficulties with meeting, for example, data or cofinancing requirements. They call for more flexibility and quicker, more simplified processes. They also call for continued emphasis on channeling funding through local agencies. Developed countries, meanwhile, tend to recognize the need for ease of access but also emphasize the need for standards and procedures to ensure that funds are used appropriately.

What’s at stake?

Determining the quantum of the new goal is arguably the most crucial aspect of these negotiations. Parties need to decide on whether they are selecting one or multiple goals. This is a fundamental factor that influences all other parts of the negotiations. It touches upon the basic relationship between developed and developing countries as well as their roles in relation to implementation of the Paris Agreement.

“Taking into account” the needs and priorities of developing countries is also an important point of negotiation. First, Parties will need to determine how to assess these needs. Should Parties rely on Parties’ own assessments in their NDCs or on external assessments? Second, Parties will need to decide on how these estimates will impact the final quantum. What role do needs assessments play in determining a quantitative goal?

Parties have also discussed the need to consider the quality of the finance being provided. For example, developing countries highlight the need to balance thematic areas, ensure predictability, strengthen access, and increase concessionality of the funding provided. Developed countries, meanwhile, want to ensure that funds are used effectively. Questions remain about the degree to which they will factor into the final quantum of the goal.

Theme: What should the goal fund?

What is discussed?

What’s the role of L&D within the thematic scope?

The decisions and commitments leading to the $100 billion goal exclusively referred to support for climate action in developing countries, where funding to date has been allocated mainly to mitigation and (to a lesser degree) adaptation actions, likely due to the context of meaningful mitigation action and transparency of implementation in developing countries. Thus, progress on the goal has been measured under these two categories. However, developing countries have questioned whether the NCQG can include L&D as finance category.

Decisions adopted within the UNFCCC and reports have reinforced the role that L&D finance might play in the NCQG. At COP19 (2013) in Poland, climate negotiators established the Executive Committee of the Warsaw International Mechanism for Loss and Damage. Two years later, in Paris, an L&D article was embedded in the Paris Agreement calling for Parties to avert, minimize, and address L&D. The first L&D finance-related reports under the Convention were developed in 2019, when COP22 recommended the UNFCCC Secretariat prepare a paper identifying the sources of financial support for addressing L&D. At COP25, the Santiago Network on Loss and Damage was established. However, developing countries and civil society organizations insisted on the need for a fund to respond to L&D, and the sixth assessment report of the Intergovernmental Panel on Climate Change (IPCC) also clearly highlighted L&D due to climate impacts (IPCC 2021).

These actions paved the way for L&D finance to be formally included as part of the UN climate change negotiations at COP27. This led to the opportunity to officially address “funding arrangements for responding to loss and damage associated with the adverse effects of climate change, including a focus on addressing loss and damage” (UNFCCC 2022a). As an outcome of these discussions at COP27, Parties decided to establish new funding arrangements for assisting developing countries that are particularly vulnerable to the adverse effects of climate change and to establish a fund to respond to L&D whose mandate includes a focus on addressing L&D (UNFCCC 2022a).

The operationalization of the funding arrangements and the newly created L&D fund will be informed by recommendations provided by a transitional committee. The committee will recommend the institutional arrangements, modalities, structure, governance, and terms of reference for the fund. It also will define the elements of the new funding arrangements, identifying and expanding sources of funding and ensuring coordination and complementarity with existing funding arrangements.

As stated by the IPCC, scientific evidence already confirms that countries, mainly the most vulnerable developing countries, are experiencing the economic and noneconomic impacts of L&D. Economic impacts include both sudden-onset events (e.g., floods, storms, and cyclones) and slower-onset processes (e.g., droughts, sea level rise, desertification, and glacial retreat) as well as noneconomic impacts that include loss of heritage and biodiversity. Some reports have estimated finance needs for L&D by 2050 to be up to $1,745 billion and $2,684 billion per year (Richards et al. 2023). For example, Pakistan’s L&D costs alone, caused by the recent flooding disasters in 2022, were estimated at $40 billion. These costs do not consider noneconomic L&D.

Developing countries and country groups, including ABU, the African Group of Negotiators on Climate Change (AGN), AILAC, the Alliance of Small Island States (AOSIS), and the Least Developed Countries (LDC) Group have expressed the view that L&D should be included in the NCQG (ABU 2022; AGN 2022; AILAC 2023; AOSIS 2022; LDC Group 2023). They point to, among other provisions, Article 3 of the Paris Agreement, which states that “the efforts of all Parties will represent a progression over time while recognizing the need to support developing country Parties for the effective implementation of this Agreement” (UNFCCC 2016). Further, they point out that the Paris Agreement includes L&D in Article 8, in which parties recognize the importance of averting, minimizing, and addressing L&D associated with the adverse effects of climate change.

Dividing the pie between adaptation, mitigation, and L&D

Parties are also discussing whether to have specific subtargets for the different types of finance: adaptation, mitigation, and (potentially) L&D. Under the Paris Agreement, Parties agreed to ensure a “balance” between adaptation and mitigation finance. However, the definition of balance was not made clear, and adaptation finance has typically lagged behind financing for mitigation, even before the adoption of the Paris Agreement.

In considering the role of mitigation, adaptation, and L&D finance, negotiators are looking at whether to create specific targets for each type of finance. This requires agreement on how to determine the correct division between these themes and how to facilitate successful monitoring of these finance targets. For example, this may involve considering how to compare different types of finance, such as grants versus debt financing (Watson 2023).

What’s at stake?

COP27 changed the climate finance landscape with a decision on L&D finance. Developing countries’ climate finance needs have included some measurement of L&D, but the negotiation outcome at COP 27 in Egypt has paved the way for due recognition. Because the NCQG has a mandate to consider developing countries’ needs, now the main question revolves around how the new goal should treat L&D finance and its role in the balance equation.

In addition, there is a question of whether—and, if so, how—to set specific targets or goals for each of the types of finance. Some parties have made clear their view that the addition of L&D to the balance of adaptation and mitigation should neither lower nor limit the amount of finance provided for mitigation or adaptation initiatives. If an L&D subtarget is to be included, negotiators will need to incorporate considerations around the size of the target and how to measure such finance. Parties will also need to consider the relationship of the new goal with the establishment and operationalization of the new funding arrangements, including the L&D fund, mainly if funds directed to the L&D fund can be counted toward the NCQG.

Time frame: What time frame should the goal cover?

What is discussed?

Parties need to determine a time frame for the NCQG and potential intermediate milestones or review cycles upon which the goal may be updated over time. As was evidenced during the fifth TED (UNFCCC 2023), Parties generally identify the time frame options around long-term perspectives, looking at 2050 as a specific target; medium-term time frames, covering 10-year review cycles; and short-term, or 5-year, implementation periods.

Shorter time frames have been proposed to account for changing administrations, election cycles, political challenges, and the potential to coincide with NDC and Global Stocktake (GST) update and submission processes. Proposers of shorter time frames have also argued that these would allow a higher level of predictability for developing countries and that an ambitious short-term goal could consequently incentivize ambitious and front-loaded short-term climate action. Those in favor of longer-term time frames have suggested setting a goal for 2050, aligning efforts to most 2050 net zero targets, and signaling commitments to introduce structural changes to the financial systems (UNFCCC 2023).

An adjustable goal?

Developing countries have suggested that the goal be updated based on future needs and scientific findings. The evolving nature of inflation rates, budget cycles, and other external factors may impact the availability and need for resources. Parties, including developed and developing countries, have expressed their interest in being able to adjust the goal to reflect the evolving nature of the global economic landscape. The review process could be developed every two and/or five years to align with the time frame of other UNFCCC processes and reports, such as NDCs, the GST, or biennial transparency reports (BTR). Review milestones could incorporate updated information from national investment plans, new national policies, government terms, and national budget cycles to inform the country’s needs and the quality of climate finance and assess how resources are being used.

Some parties have suggested that a review process could benefit from having an independent expert committee to assess progress and produce a synthesis of annual or biennial reports to inform progress on the goal. In addition, a review process could be further leveraged to assess if climate finance is indeed producing the desired outcomes, a notion supported by developed countries (see Watson 2023). This way, countries—both contributors and recipients—can evaluate the impact of climate finance on specific national goals or priorities.

Some Parties have also raised the question of whether the goal will be maintained on annual terms, as with the $100 billion goal, or if a cumulative goal should also be established. This would allow some of the challenges associated with the $100 billion goal (mainly, not reaching the goal in certain years) to be addressed up front by clearly defining responsibilities for what happens when an annual goal is not met. In this context, some developing country Parties have suggested that an annual goal is more conducive to the transparency framework than a goal with a longer reporting period because the shorter time frame may make it easier to monitor and assess data.

Lastly, Parties are discussing whether to have a centralized system in place to track needs and contributions toward the new goal. It is suggested that a tracking system could support monitoring data from contributors and recipients and be informed by reviews and reports within (e.g., BTRs) and outside (OECD climate finance reports and Oxfam climate finance shadow reports) the UNFCCC.

What’s at stake?

In general, the main challenges to consider concerning the time frame and temporal scope are related to the political will of countries to deliver their promises within the adopted time frame, the availability of updated data to assess compliance with the new goal, the dynamic nature of developing country needs, and the need for accountability mechanisms to track the goal (see “Transparency arrangements: What type of transparency arrangements should accompany the goal?”).

The time frame discussion will have a direct relationship with the negotiated quantum. It has been suggested that a longer time frame could undermine short-term ambitions by allowing the provision of finance to instead increase over time. If they go the route of implementing intermediate review milestones, negotiators will need to consider adequate mechanisms for addressing the uncertainty that such an approach might introduce if it reopens negotiations at each milestone.

Contributor: Who should contribute to the NCQG?

What is discussed?

Interpretations differ about who should provide and mobilize financial flows to meet the NCQG. Some Parties are asking whether the NCQG contributor base should be expanded to include countries beyond those developed countries initially responsible to fulfill the $100 billion goal. The fifth TED acknowledged that subsequent discussions are needed to further understand “how to reflect the provision of ‘collective’ in the implementation, where some argue it could reflect agreeing on burden-sharing arrangements among provider countries, while others referred to broadening the contributor base of provider countries” (UNFCCC 2023).

How was the original list of developed countries determined?

The Convention identifies three main groups of countries according to their commitments. Annex I includes countries that were members of the OECD in 1992, plus countries with economies in transition, including the Russian Federation, the Baltic states, and several Central and Eastern European states. Annex II includes all countries from Annex I, excluding economies in transition. Non–Annex I countries are mainly developing countries that constitute recipients of financial flows.

Article 4.3. of the Convention states that “developed country Parties shall also provide such financial resources, including for the transfer of technology, needed by the developing country Parties to meet the agreed full incremental costs of implementing measures that are covered by paragraph 1” (UNFCCC 2009). Further, Article 4.4. states that “developed country Parties and other developed Parties included in Annex II shall also assist the developing country Parties that are particularly vulnerable to the adverse effects of climate change in meeting costs of adaptation to those adverse effects” (UNFCCC 2009). Article 4.7 mentions that “the extent to which developing country Parties will effectively implement their commitments under the Convention will depend on the effective implementation by developed country Parties of their commitments under the Convention related to financial resources and transfer of technology and will take fully into account that economic and social development and poverty eradication are the first and overriding priorities of the developing country Parties” (UNFCCC 2009). In this sense, the concept of “developed countries” was deemed as being synonymous with Annex II countries. This is the same definition that other institutions, such as ODI, have generally used, as opposed to the OECD, which includes other EU Member States not included in Annex II (Bos and Thwaites 2021).

What does the Paris Agreement say in terms of who should be contributing to the new goal? The decision adopted at COP21 states that “in accordance with Article 9, paragraph 3, developed countries intend to continue their existing collective mobilization goal through 2025 in the context of meaningful mitigation actions and transparency on implementation; prior to 2025 the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement shall set a new collective quantified goal from a floor of USD 100 billion per year, taking into account the needs and priorities of developing countries” (UNFCCC 2016). (For further understanding of Article 9.3, please see Figure 4.)

Many developing countries emphasize that there should not be a change in the contributor base. For example, the Like-Minded Developing Countries Group submission states, “The New Collective Quantified Goal on Climate Finance does not have the mandate to discuss contributors to the goal as it has never been cited in a previous decision. The discussion on contributors is therefore not substantiated in the NCQG process and the options discussed therein will not be useful to the CMA as it does not have a mandate to respond to such options. The exploration of contributors will not yield any productive outcome and the options produced cannot be decided upon within the NCQG agenda item this upcoming CMA in any case” (LMDC 2023). The submission from the Arab Group similarly states that “the matter of contributors to the NCQG has already been agreed by Parties within Article 9 upon the adoption of the agreement. . . . The [NCQG] does not have the mandate to discuss contributors to the goal as it has never been cited in a previous decision” (AG 2023). Other countries have stated that the NCQG is a continuation of the $100 billion goal and, therefore, developed countries remain responsible for following the same responsibilities as that goal (AGN 2023). Further, the new goal is a “means to implement the goal of the Paris Agreement in the context of Article 9, which underlines that developed countries should provide financial resources to support developing countries (Article 9.1) and should continue to take the lead in mobilizing climate finance taking into account the needs and priorities of developing countries (Article 9.3); to provide a balance between adaptation and mitigation considering developing countries’ strategies, as well as their priorities and needs (Article 9.4)” (AILAC 2023).

Figure 4 | NCQG-related articles under the Paris Agreement to assess the contributor base

Source: Information based on UNFCCC (2016).

Fundamentally, this position centers on the continuation of finance obligations within Articles 4.3 and 4.4 and on the CBDR-RC principle, where developed countries are considered responsible for the highest levels of historical emissions and their levels of wealth sufficient to provide support to other countries.

However, some developed country Parties argue that the list of countries required to contribute financially to the NCQG should be expanded beyond Annex II (those responsible for the $100 billion goal). For example, some propose including high-emitting countries and those with high economic capacities, including some countries that, under the Paris Agreement, define themselves as developing country Parties (Government of Norway 2023) whereas others suggest focusing on all high-income economies, excluding highly vulnerable countries like Small Island Developing States (Government of Canada 2023). This position commonly points to the evolving international economic landscape, including the larger financial capacity reached by some emerging economies since the adoption of the UNFCCC in 1992 and their levels of GHG emissions in recent decades, either cumulative or per capita. For example, looking at carbon dioxide (CO₂) cumulative emissions between 1990 and 2019, 10 non–Annex II countries are currently among the top 20 high emitters. Of these 10 countries, 2 (South Korea and Saudi Arabia) are considered “high-income” economies according to the World Bank classification, which is based on the per capita gross national income (GNI) (see Figure 5 and Appendix A). Similarly, looking at average per capita emissions from 1990 to 2019, 8 of the top 10 non–Annex II highest per capita emitters are classified as “high-income” economies (see Figure 6 and Appendix B).

Figure 5 | Cumulative CO₂ emissions per country

Notes: See Appendix B for the country code list. CO₂ = carbon dioxide; GNI = gross national income; kt = kiloton.

Source: WRI authors; economy classification and per capita CO₂ data extracted from World Bank (n.d.a) and CO₂ emissions from World Bank (n.d.b).

Figure 6 | Per capita CO₂ emissions per country

Notes: See Appendix B for the country code list. CO₂ = carbon dioxide; GNI = gross national income; kt = kiloton.

Source: WRI authors; economy classification and per capita CO₂ data extracted from World Bank (n.d.a) and CO₂ emissions from World Bank (n.d.b).

Submissions by developed country Parties are increasingly highlighting the relationship between Article 9 and Article 2.1c in the context of establishing the new goal and broadening the contributor base. Article 2.1c, aiming to strengthen the global response to the threat of climate change, lays out the finance-
related long-term goal of the Paris Agreement, which calls for “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development” (UNFCCC 2016). How this long-term goal will be operationalized is still under discussion.

Some developed countries have pushed for interpreting Article 2.1c as putting responsibility on all Parties to pay for climate action. A submission from Japan suggests discussing “broadening the contributor base through the implementation of Article 2.1c” (Government of Japan 2023). Also, countries such as Norway and New Zealand raise the contributor issue in the context of Article 9 and Article 2.1c (Government of Norway 2023; Government of New Zealand 2023), and the Environmental Integrity Group states that “as part of a global effort, the contributor base should be as broad as possible” (EIG 2022). Developing countries have raised the concern that linking the NCQG discussions to Article 2.1c may distract developed countries from their responsibility to provide and mobilize climate finance. They worry that it will shift responsibility to developing countries’ domestic policies and finance flow shifts or add further conditionalities to the climate finance provided. This was one of the main reasons why the request by some developed countries to include an agenda item to further discuss scope and implementation of Article 2.1c failed at COP27. Instead, the CMA decided to launch the Sharm el-Sheikh Dialogue on Article 2.1c and its complementarity with Article 9, the outcomes of which will be reported to the CMA at COP28.

What’s at stake?

Prior to COP29 (2024), the final text of the NCQG needs to be adopted and any concerns related to the contributor base need to be addressed. As explained above, some Parties feel this warrants an expansion of the list of countries responsible for contributing finance. Others feel there is no legal basis for discussing and implementing such an expansion. They have raised the principles of equity and CBDR-RC, as well as finance responsibilities within the Convention and its relationship with Article 9 of the Paris Agreement, to explain that the responsibility should remain in developed countries.

Discussions around expanding or modifying the contributor base will need to be holistic and include factors beyond economic capacities, including, but not limited to, emissions levels, climate vulnerability, and development indicators (see Appendices A and B for a comparison of emissions, GNI, and the Human Development Index, based on life expectancy and education indexes in addition to GNI).

Transparency arrangements: What type of transparency arrangements should accompany the goal?

What is discussed?

How does reporting work today?

Until this point, there have been different reports within the UNFCCC to help track and monitor climate finance flows mobilized by developed countries. Existing UNFCCC reports include BRs and the biennial assessment and overview of climate finance flows (BA). BRs are submitted by each developed country every two years and include, among other things, reporting on climate finance provided through bilateral and multilateral channels, using a common tabular format (CTF). The BA is issued by the SCF and provides a global overview of climate finance flows and measurement, reporting, and verification support provided to developing countries as well as a compilation of finance data from developed countries’ BRs.

In the case of accountability toward the $100 billion goal, at COP26 the SCF was tasked with developing a report on the progress toward achieving the goal. The resulting report assessed progress on the $100 billion goal based on official reports produced by the UNFCCC (BRs and BA) and the assessments and tracking performed by international organizations and civil society groups such as the OECD and Oxfam (see Figure 7).

Today, some of the existing UNFCCC transparency arrangements are being streamlined under the Paris Agreement to produce annual, biennial, and quadrennial reports to help assess progress under the NCQG.

Figure 7 | Range of estimations per channel from sources of information in the latest available year, as presented in the SCF report

Notes: Pins represent specific values from each source of information per channel. The extent of the bars represents the maximum value of estimates on the latest available year across sources of information. Analyses make assumptions on sources and instruments that are not aligned with the language of the US$100 billion goal. Note that sources of information reflect data points for the latest available year that differ across sources of information and are therefore noncomparable. The underlying data points, sources, and annotations are outlined in Annex D of the source (SCF 2022). Values for bilateral finance from the BA are derived from preliminary data of biennial reports of Annex II Parties for 2020 and are subject to change after the December 31, 2022, submission deadlines. BA = biennial assessment and overview of climate finance flows; BUR = biennial update report; MDB = multilateral development bank; MOF = Ministry of Finance; OECD = Organisation for Economic Co-operation and Development.

Source: SCF 2022.

There are three accountability mechanisms under the Paris Agreement at the individual and aggregate levels (UNFCCC 2022b). Accountability at the individual level is based on the enhanced transparency framework (ETF). Through the ETF, countries report their climate action efforts, including tracking of their NDC and information about the support provided and received by individual relevant Parties toward climate action. Reporting under the ETF is complemented by a review process conducted by third parties to assess and monitor the progress to achieve the Paris Agreement goals (see Table 3).

The information gathered under the ETF will inform the GST. The ETF includes BTRs (starting in 2024, after BRs are replaced) and biennial technical expert reviews. The ETF will promote accountability at the country level by encouraging countries to report on their climate action efforts, including on support provided and received by Parties toward climate action. Reporting under the ETF is complemented by a review process conducted by technical experts, which will determine if BTRs are in accordance with modalities, procedures, and guidelines. The information assessed by the technical expert review includes support provided to developing countries (see Table 3).

Every five years the GST assesses, at an aggregate level, the collective progress toward achieving the Paris Agreement purpose and long-term goals. The GST covers the thematic areas of mitigation, adaptation, and means of implementation and support, and it considers information reported and reviewed under the ETF.

Table 3 | Transparency arrangements under the Convention and the Paris Agreement 

Notes: UNFCCC = United Nations Framework Convention on Climate Change.

Source: Dagnet et al. 2019.

Parties have proposed a transparency framework for the NCQG that allows for monitoring and tracking of progress and builds upon existing mechanisms and systems. Several countries have supported the idea of using existing transparency frameworks under the Paris Agreement (see Table 3). For example, Argentina, Brazil, and Uruguay have stated that the “NCQG needs to be based on a solid and transparent reporting system, based on the ETF, that allows for annual assessments of its fulfillment and for recommendations on periodic adjustments to guarantee it will be fully accomplished in its agreed timeframe” (ABU 2022). The United States also supports building the NCQG transparency framework upon existing mechanisms to avoid duplication (U.S. Government 2022). AOSIS mentioned that the transparency and accountability arrangements should be in accordance with the ETF’s modalities, procedures, and guidelines (AOSIS 2022). Several countries and groups of countries, including ABU, AILAC, and AOSIS, have stated that progress on delivering the new goal should be assessed as part of each GST (ABU 2022; AILAC 2022; AOSIS 2022).

In addition, it might be more efficient to task a centralized body, such as the SCF, with producing regular progress reports on the NCQG, facilitating information to the public, and ensuring all NCQG elements are adequately reflected through the ETF.

Although Parties generally agree that accountability and transparency processes should be built upon existing systems, they disagree about the importance of a unified definition of climate finance as well as what that unified definition might look like. As described in the SCF’s report on progress toward achieving the $100 billion goal, countries can still determine their own methodologies to track, measure, report, and define climate finance, which presents challenges to aggregating climate finance data provided under the NCQG (SCF 2022).

AOSIS and the LDC Group have raised the importance of a common method for tracking climate finance provided under the NCQG (AOSIS 2022; LDC Group 2022). AGN has also highlighted the importance of having clear definitions of what is considered “new and additional” finance compared to development finance and what it means to effectively “provide and mobilize” climate finance. Clarity on definitions and tracking methods may promote consistent, comparable information and help avoid double counting (AGN 2022). To date, developed countries have discretion to classify flows as new and additional in their BRs. This discretion allows them to report climate finance already mobilized as development flows within official development assistance as additional and new. For example, the International Expert Group on Climate Finance has stated that there is an overlap between climate and development finance, which has increased because climate investments tend to serve both purposes (Bhattacharya et al. 2020).

According to the fourth BR, Parties emphasized that reporting on private flows is voluntary and no internationally agreed standard exists for tracking private climate finance (except for OECD efforts). A standard guideline or methodology on how countries could track this source is still needed. Between the third and fourth BR, the number of Parties not providing information on private sector finance (neither qualitative nor quantitative) fell from 16 out of 42 to 10 out of 41.

What’s at stake?

The NCQG is not mentioned under the Paris Agreement, and there is no standing mandate to make use of existing processes and procedures. Drawing lessons from the $100 billion goal experience, Parties appear to agree that the NCQG should be established in conjunction with an official transparency mechanism under the Paris Agreement to efficiently monitor progress toward the goal, proactively identify challenges for mobilizing and providing finance, and identify measures for addressing them.

Developed countries still have general discretion to report resources as either committed, disbursed, or climate specific and to report mobilized support as new and additional. In addition, the modalities, procedures, and guidelines for reporting do not provide specific instructions on how financial instruments should be taken into consideration, nor do they specifically spell out a mandate for reporting on the NCQG. Thus, a long list of assumptions, definitions, and methodologies depend on the discretion of each country, which could prevent aggregate, comparable data.

Transparency arrangements for the new goal need to ensure that data are comparable, accurate, and consistent and accurately reflect what has been provided and mobilized, especially if the ETF is selected as the main transparency arrangement for the NCQG and the GST as the report to assess progress every five years toward the goal (see Figure 8).

Figure 8 | Information reported in CTFs within the ETF

Note: CTF = common tabular format.

Source: Oliver 2023.

Agreeing on a new goal will mean discussing and coming to an agreement on a variety of complex factors, including—but also going beyond—setting a numeric value for the goal. These factors range from who should provide funding to how it should be distributed and monitored. Parties will need to determine how funding will be distributed between adaptation, mitigation, or L&D. And they will need to agree upon how big the goal should be in terms of monetary value. But the question of the goal’s size is arguably the central question facing negotiators. Coming to agreement will involve understanding the needs and priorities of developing countries, which will continue to intensify as climate impacts continue to exacerbate. Although not directly addressed in this paper, the NCQG will also need to consider the quality of climate finance, including addressing the significant barriers to accessing climate and the financial instruments through which funding is delivered.

The NCQG process can benefit from finding synergies with existing processes under the Convention and the Paris Agreement. Some topics that may have an impact on the NCQG are also under negotiation in parallel with the NCQG, including L&D finance, operationalization of Article 2.1c, and the ETF. To prevent overlap and ensure consistency, the NCQG process could benefit from having joint technical discussions to address information gaps and inform the options for each element under consideration.

To outline a path to final agreement, TEDs need to narrow the conversations and identify consensus and divergence. Moving forward, more focused and concrete deliberations can be structured upon all Party and non-Party submissions to identify consensus, discard certain options, and find where bridges need to be developed. To complement this analysis, a list of definitions and concepts could help guide the deliberations (e.g., mobilization, provision, developed countries, climate finance investments, needs) because often Parties and non-Parties have different understandings of the same concept. These discussions should address and delineate the challenges of each alternative to move forward and inform upcoming climate finance negotiations. Future dialogues should build upon existing submissions to inform the NCQG process and prepare assessment reports.

Regular consultations should be structured to directly inform and complement the NCQG deliberation process. Regular consultations with constituted bodies are a component of the AHWP. How these consultations take place, and their outcomes, could be communicated on a recurrent basis to inform TEDs, submissions, high-level ministerial sessions, and other interactions that will ultimately inform the NCQG negotiations. These regular consultations will also benefit from a structure that clearly identifies the specific NCQG elements (e.g., quantum, time frame, etc.) they contribute.

ABUArgentina, Brazil, and Uruguay

AGNAfrican Group of Negotiators on Climate Change

AHWPad hoc work program

AILACAsociación Independiente de Latinoamérica y el Caribe (Independent Association of Latin America and the Caribbean)

AOSISAlliance of Small Island States

BAbiennial assessment and overview of climate finance flows

BRbiennial report

BTRbiennial transparency report

BURbiennial update report

CBDR-RCcommon but differentiated responsibilities and respective capabilities

CMAConference of the Parties serving as the meeting of the Parties to the Paris Agreement

COPConference of the Parties

CO₂carbon dioxide

CTFcommon tabular format

ETCEnergy Transition Committee

ETFenhanced transparency framework

GDPgross domestic product

GHGgreenhouse gas

GNIgross national income

GSTGlobal Stocktake

HDIHuman Development Index

HLMDhigh-level ministerial dialogue

IAMintegrated assessment model

IPCCIntergovernmental Panel on Climate Change

IRENAInternational Renewable Energy Agency

ktkiloton

L&Dloss and damage

LCD GroupLeast Developed Countries Group

MDBmultilateral development bank

MOFMinistry of Finance

NCQGnew collective quantified goal

NDCnationally determined contribution

OECDOrganisation for Economic Co-operation and Development

SCFStanding Committee on Finance

TEDtechnical expert dialogue

UNEPUnited Nations Environment Programme

UNFCCCUnited Nations Framework Convention on Climate Change

ABU (Argentina, Brazil, and Uruguay). 2022. New Collective Quantified Goal: Submission by Brazil on Behalf of ABU (Argentina, Brazil and Uruguay). Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202203160906---ABU%20-%20Submission%20NCQG.pdf.

AG (Arab Group). 2023. Saudi Arabia on Behalf of the Arab Group: Submission on the Sixth Technical Expert Dialogue under the Ad Hoc Work Programme of the New Collective Quantified Goal on Climate Finance (NCQG). Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202305151155---20230805_Draft_Arab_Group_Submission_NCQG_TED6_vF.pdf?_gl=1*1ou8prc*_ga*MTQ2MjI5MDE0Ni4xNjY0NDgynjA1*_ga_7ZZWT14N79*MTY5NTYxMDQyMy4yMjcuMS4xNjk1NjEwNzQ1LjAuMC4w.

AGN (African Group of Negotiators on Climate Change). 2022. Submission by the Republic of Zambia on Behalf of the African Group of Negotiators: Views on the New Collective Mobilization Goal on Climate Finance. Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://unfccc.int/sites/default/files/resource/AGN%20submission%20on%20the%20New%20Goal.pdf.

AGN. 2023. Submission by the Republic of Zambia on Behalf of the African Group of Negotiators: Submission on the Sixth Technical Expert Dialogue under the Ad Hoc Work Programme of the New Collective Quantified Goal on Climate Finance (NCQG). Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202305151155---20230805_Draft_Arab_Group_Submission_NCQG_TED6_vF.pdf?_gl=1*grjjo7*_ga*MTQ2MjI5MDE0Ni4xNjY0NDgyNjA1*_ga_7ZZWT14N79*MTY5NTQ4NzA1NS4yMjQuMC4xNjk1NDg3MDU1LjAuMC4w.

AILAC (Asociación Independiente de Latinoamérica y el Caribe). 2022. Submission by Colombia on Behalf of the AILAC Group of Countries Composed by Chile, Colombia, Costa Rica, Honduras, Guatemala, Panama, Paraguay and Peru: New Collective Quantified Goal on Climate Finance. Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202208231116---AILAC%20submission%20on%20the%20new%20goal%20on%20finance_needs%20and%20priorities.pdf?_gl=1*5ctt3k*_ga*MTQ2MjI5MDE0Ni4xNjY0NDgyNjA1*_ga_7ZZWT14N79*MTY5NTQ4NzA1NS4yMjQuMS4xNjk1NDg5MDIxLjAuMC4w

AILAC. 2023. Submission by Costa Rica on Behalf of the AILAC Group of Countries Composed by Chile, Colombia, Costa Rica, Honduras, Guatemala, Panama, Paraguay and Peru: New Collective Quantified Goal on Climate Finance. Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202305160555---AILAC%20-%20TED%206%20submission.pdf?_gl=1*t3b8x4*_ga*MTQ2MjI5MDE0Ni4xNjY0NDgyNjA1*_ga_7ZZWT14N79*MTY5ODExNjAzNC4yODguMC4xNjk4MTE2MDM0LjAuMC4w.

Alayza, N., P. Bhandari, D. Burns, N. Cogswell, K. de Zoysa, M. Finch, T. Fransen, et al. 2022. “COP27: Key Takeaways and What’s Next.” Insights (blog), World Resources Institute, December 8. https://www.wri.org/insights/cop27-key-outcomes-un-climate-talks-sharm-el-sheikh.

AOSIS (Alliance of Small Island States). 2022. Submission: New Collective Quantified Goal on Climate Finance. Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202203061139---AOSIS%20-%20CC%20Finance%20-%20NCQG%20on%20Climate%20Finance%20-%20Submission%20-%20Initial%20Views%20-%202022-03-06.pdf.

Argueta, B., R. Pandit Chhetri, D. Eckstein, and M. Köhler. 2021. “Access to Climate Finance for the Most Vulnerable.” Policy Brief. Bonn, Germany: Climate Finance Advisory Service. https://www.cfas.info/sites/default/files/anhang/CFAS_Policy_Brief_Access_to_climate_finance_0.pdf.

Argueta, B., B. Dransfeld, D. Eckstein, J. Grimm, M. Köhler, and D. Ryfisch. 2022. “Process Proposal for Defining the New Collective Quantified Goal.” Climate Finance Advisory Service Policy Brief. Cape Town: Climate and Development Knowledge Network. https://cfas.info/sites/default/files/anhang/CFAS_Policy_Brief_Process%20Proposal%20for%20Defining%20the%20New%20Collective%20Quantified%20Goal.pdf.

Baarsch, F., T. Lissner, C.-F. Schleussner, J. Granadillos, K. de Bruin, M. Perrette, M. Schaeffer, and B. Hare. 2015. Impacts of Low Aggregate INDCs Ambition: Research Commissioned by Oxfam. Berlin: Climate Analytics. https://policy-practice.oxfam.org/resources/impacts-of-low-aggregate-indcs-ambition-research-commissioned-by-oxfam-582427/.

Bhattacharya, A., R. Calland, A. Averchenkova, L. Gonzalez, L. Martinez-Diaz, and J. Van Rooij. 2020. Delivering on the $100 Billion Climate Finance Commitment and Transforming Climate Finance. New York: Independent Expert Group on Climate Finance, United Nations. https://www.un.org/sites/un2.un.org/files/2020/12/100_billion_climate_finance_report.pdf.

Bos, J., and J. Thwaites. 2021. “A Breakdown of Developed Countries’ Climate Finance Contributions towards the $100 Billion Goal.” Technical Note. Washington, DC: World Resources Institute. https://doi.org/10.46830/writn.20.00145.

Bos. J., and L. Gonzalez. 2022. “4 Key Accountability Standards the SCF Progress Report Should Consider.” Insights (blog), World Resources Institute, March 17. https://www.wri.org/insights/4-standards-scf-report-should-consider.

Caldwell, M., and N. Alayza. 2023. “Landscape of Assessments on the Quantum of Finance Needed to Address Climate Action.” Presentation at the Sixth Technical Expert Dialogue, “New Collective Quantified Goal on Climate Finance,” Bonn, Germany, June 12. https://unfccc.int/sites/default/files/resource/TED%206_Climate%20Finance%20Needs%20v.%20Final%2006.11.pdf?_gl=1*7qopln*_ga*MtcyMjk2NDc2OS4xNjg1MDIxOTUz*_ga_7ZZWT14N79*MTY4Njg0MTQyMC44NS4xLjE2ODY4NDE5NjIuMC4wLjA.

Chapagain, D., F. Baarsch, M. Schaeffer, and S. D’haen. 2020. “Climate Change Adaptation Costs in Developing Countries: Insights from Existing Estimates.” Climate and Development 12 (10): 934–42. https://doi.org/10.1080/17565529.2020.1711698.

Climate Watch. n.d. “Explore Nationally Determined Contributions (NDCs).” https://www.climatewatchdata.org/ndcs-explore. Accessed August 2023.

COP26 (26th Conference of the Parties) Presidency. 2021. Climate Finance Delivery Plan: Meeting the US$100 Billion Goal. London: COP26 Presidency. https://ukcop26.org/wp-content/uploads/2021/10/Climate-Finance-Delivery-Plan-1.pdf.

Cozzi, P., R. Narvaez, F. Osses, M. Eyassu Melkie, and C. Nguyen. 2022. “The New Goal on Climate Finance: It’s about Quantity and Quality!” Technical Paper. Basalt, CO: Climate Finance Access Network, RMI. https://cfanadvisors.org/wp-content/uploads/2022/11/SECOND-TECHNICAL-PAPER-V5.pdf.

Dagnet, Y., N. Cogswell, N. Bird, M. Bouyé, and M. Rocha. 2019. “Building Capacity for the Paris Agreement’s Enhanced Transparency Framework: What Can We Learn from Countries’ Experiences and UNFCCC Processes?” Working paper. Washington, DC: Project for Advancing Climate Transparency. https://files.wri.org/d8/s3fs-public/building-capacity-paris-agreements-enhanced-transparency-framework.pdf.

ECCC (Environment and Climate Change Canada) and Federal Foreign Office. 2022. Climate Finance Delivery Plan Progress Report: Advancing the Ten Collective Actions. Quebec: ECCC, Government of Canada; Berlin: Federal Foreign Office, Government of Germany. https://www.canada.ca/en/services/environment/weather/climatechange/canada-international-action/climate-finance/delivery-plan/progress-report-2022.html.

EIG (Environmental Integrity Group). 2022. First EIG Submission on the New Collective Quantified Goal on Climate Finance. Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202203081632---First%20EIG%20Submission%20on%20the%20New%20Collective%20Quantified%20Goal%20on%20Climate%20Finance.pdf.

ETC (Energy Transitions Committee). 2023. Financing the Transition: How to Make the Money Flow for a Net-Zero Economy. London: ETC. https://www.energy-transitions.org/wp-content/uploads/2023/08/ETC-Financing-the-Transition-MainReport_update.pdf.

European Union. 2023a. Submission by Sweden and the European Commission on Behalf of the European Union and Its Member States: EU’s Views on the 2023 work Plan for New Collective Quantified Goal on Climate Finance. Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202302061016---SE-2023-02-06%20EU%20submission_NCQG_WP_230131.pdf?_gl=1*16tg61e*_ga*MTQ2MjI5MDE0Ni4xNjY0NDgyNjA1*_ga_7ZZWT14N79*MTY5NDY2ODExMC4yMDAuMS4xNjk0NjcwNjMzLjAuMC4w.

European Union. 2023b. Submission by Sweden and the European Commission on Behalf of the European Union and Its Member States: Sixth Technical Expert Dialogue (TED6) under the Ad Hoc Work Programme on the New Collective Quantified Goal on Climate Finance (NCQG). Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202302061016---SE-2023-02-06%20EU%20submission_NCQG_WP_230131.pdf?_gl=1*kou1p9*_ga*MTQ2MjI5MDE0Ni4xNjY0NDgyNjA1*_ga_7ZZWT14N79*MTY5Njk4MDg3Ny4yNzIuMS4xNjk2OTgwOTc0LjAuMC4w.

Federal Foreign Office. 2023. “Open Letter: Canada and Germany’s Way Forward on Climate Finance in 2023.” Press Release, September 15. https://www.auswaertiges-amt.de/en/newsroom/news/-/2616670.

Government of Canada. 2023. Canada’s Submission on the 2023 Workplan of the Ad Hoc Work Programme for the New Collective Quantified Goal on Climate Finance and Its Fifth Technical Expert Dialogue. Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202303010949---NCQG%20February%202023%20Canada%20EN.pdf?_gl=1*omyl9o*_ga*MTQ2MjI5MDE0Ni4xNjY0NDgyNjA1*_ga_7ZZWT14N79*MTY5ODEwODM5MS4yODYuMS4xNjk4MTEwODA0LjAuMC4w.

Government of Japan. 2023. Submission by Japan on the 2023 Work Plan of the Ad Hoc Work Programme on the New Collective Quantified Goal. Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202302062044---Japan_Submission_NCQG_Workplan_2023.pdf?_gl=1*10k3m4y*_ga*MTQ2MjI5MDE0Ni4xNjY0NDgyNjA1*_ga_7ZZWT14N79*MTY5ODEwODM5MS4yODYuMS4xNjk4MTA4NzE2LjAuMC4w.

Government of New Zealand. 2023. Submission on the Issues to Be Addressed as Part of the NCQG Work Plan Referred to in Paragraph 11(a) of FCCC/PA/CMA/2022/L.19. Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202303061039---New%20Zealand%20NCQG%20Workplan%20Submission%20March%202023.pdf?_gl=1*1bd8e8b*_ga*MTQ2MjI5MDE0Ni4xNjY0NDgyNjA1*_ga_7ZZWT14N79*MTY5ODExNjAzNC4yODguMC4xNjk4MTE2MDg4LjAuMC4w.

Government of Norway. 2023. New Collective Quantified Goal (NCQG): “Quantity, Mobilisation, and Provision of Financial Sources”—Submission from Norway on Issues for the 6th Technical Expert Dialogue (TED). Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202305161235---New%20Collective%20Quantified%20Goal.%20Issues%20for%20the%206th%20TED_Norway.pdf?_gl=1*wdv8jh*_ga*MTQ2MjI5MDE0Ni4xNjY0NDgyNjA1*_ga_7ZZWT14N79*MTY5NTQ5MjQ5MS4yMjUuMS4xNjk1NDkyNTE2LjAuMC4w.

IMF (International Monetary Fund). 2021. World Economic Outlook: Managing Divergent Recoveries. Washington, DC: IMF. https://www.imf.org/en/Publications/WEO/ Issues/2021/03/23/world-economic-outlook-april-2021.

IMF. 2022a. Fiscal Monitor: Helping People Bounce Back. Washington, DC: IMF. https://www.imf.org/en/Publications/FM/Issues/2022/10/09/fiscal-monitor-october-22.

IMF. 2022b. 2022 Global Debt Monitor. Washington, DC: IMF. https://www.imf.org/-/media/Files/Conferences/2022/12/2022-12-12-global-debt-monitor.ashx.

IPCC (Intergovernmental Panel on Climate Change). 2022. IPCC Climate Change 2022: Impacts, Adaptation, and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change, edited by H.-O. Pörtner, D.C. Roberts, M. Tignor, E.S. Poloczanska, K. Mintenbeck, A. Alegría, M. Craig, et al. Cambridge, UK, and New York: Cambridge University Press. https://report.ipcc.ch/ar6/wg2/IPCC_AR6_WGII_FullReport.pdf.

IRENA (International Renewable Energy Agency). 2023. World Energy Transitions Outlook 2023: 1.5°C Pathway. Abu Dhabi: IRENA. https://mc-cd8320d4-36a1-40ac-83cc-3389-cdn-endpoint.azureedge.net/-/media/Files/IRENA/Agency/Publication/2023/Jun/IRENA_World_energy_transitions_outlook_v1_2023.pdf?rev=cc4522ff897a4e26a47906447c74bca6.

LDC (Least Developed Countries) Group. 2022. “Submission by the Senegal on Behalf of the Least Developed Countries (LDCs) on New Collective Quantified Goal.” Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202203071355---LDC%20Submission_CC%20Finance_NCQG_20220307.pdf.

LMDC (Like-Minded Developing Countries Group). 2023. “India on Behalf of Like-Minded Developing Countries Group (LMDC): Submission on the Sixth Technical Expert Dialogue under the Ad Hoc Work Programme of the New Collective Quantified Goal on Climate Finance (NCQG).” Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202305181618---India_LMDC%20Submission%20NCQG%20TED6.pdf?_gl=1*1xn04cm*_ga*MTQ2MjI5MDE0Ni4xNjY0NDgyNjA1*_ga_7ZZWT14N79*MTY5NTQ4NzA1NS4yMjQuMS4xNjk1NDg3MzUzLjAuMC4w.

Markandya, A., and M. González-Eguino. 2019. “Integrated Assessment for Identifying Climate Finance Needs for Loss and Damage: A Critical Review.” In Loss and Damage from Climate Change, edited by R. Mechler, L. Bouwer, T. Schinko, S. Surminski, and J. Linnerooth-Bayer. Cham, Switzerland: Springer. https://link.springer.com/chapter/10.1007/978-3-319-72026-5_14.

McKinsey & Company. 2022. The Net-Zero Transition: What It Would Cost, What It Could Bring. New York: McKinsey Global Institute, Mc-Kinsey & Company. https://www.mckinsey.com/~/media/mckinsey/business%20functions/sustainability/our%20insights/the%20net%20zero%20transition%20what%20it%20would%20cost%20what%20it%20could%20bring/the-net-zero-transition-what-it-would-cost-and-what-it-could-bring-final.pdf.

Mustapha, S. 2022. “Providing Climate Finance in the Context of a Looming Debt Crisis.” ODI, November 11. https://odi.org/en/insights/providing-climate-finance-in-the-context-of-a-looming-debt-crisis/.

Nordhaus, W. 2017. “Integrated Assessment Models of Climate Change.” The Reporter 3 (September). https://www.nber.org/reporter/2017number3/integrated-assessment-models-climate-change.

OECD (Organisation for Economic Co-operation and Development). 2022. Aggregate Trends of Climate Finance Provided and Mobilised by Developed Countries in 2013–2020. Paris: OECD. https://doi.org/10.1787/d28f963c-en. https://www.oecd.org/climate-change/finance-usd-100-billion-goal/aggregate-trends-of-climate-finance-provided-and-mobilised-by-developed-countries-in-2013-2020.pdf

Oliver, P. 2023. “Processes and Data Sources Relevant for Tracking Progress towards the NCQG.” Presentation for the Seventh Technical Expert Dialogue under the Ad Hoc Work Programme on the New Collective Quantified Call. Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://unfccc.int/sites/default/files/resource/Oliver_draftTED%207_slides.pdf.

Richards, J.-A., L. Schalatek, L. Achampong, and H. White. 2023. “The Loss and Damage Finance Landscape.” Loss and Damage Collaboration Discussion Paper. Washington, DC: Heinrich Böll Stiftun. https://www.lossanddamagecollaboration.org/publication/the-loss-and-damage-finance-landscape.

SCF. 2022. Report on progress towards achieving the goal of mobilizing jointly USD 100 billion per year to address the needs of developing countries in the context of meaningful mitigation actions and transparency on implementation. Bonn, Germany: SCF, United Nations Framework Convention on Climate Change. https://unfccc.int/sites/default/files/resource/J0156_UNFCCC%20100BN%202022%20Report_Book_v3.2

UNDP (United Nations Development Program). n.d. (Database). Human Development Index. https://hdr.undp.org/data-center/human-development-index#/indicies/HDI. Accessed July 8, 2023.

UNEP (United Nations Environment Programme). 2022. Adaptation Gap Report 2022: Too Little, Too Slow—Climate Adaptation Failure Puts World at Risk. Nairobi: UNEP. https://www.unep.org/resources/adaptation-gap-report-2022.

UNFCCC (United Nations Framework Convention on Climate Change). 2009. Decision 2/CP.15: Copenhagen Accord. Bonn, Germany: UNFCCC Secretariat. https://unfccc.int/resource/docs/2009/cop15/eng/11a01.pdf#page=4.

UNFCCC. 2010. Decision 1/CP.16: The Cancun Agreements—Outcome of the Work of the Ad Hoc Working Group on Long-Term Cooperative Action under the Convention. Bonn, Germany: UNFCCC Secretariat. https://unfccc.int/decisions?f%5B0%5D=session%3A3454.

UNFCCC. 2016. Decision 1/CP.21: Adoption of the Paris Agreement. Bonn, Germany: UNFCCC Secretariat. https://unfccc.int/resource/docs/2015/cop21/eng/10a01.pdf.

UNFCCC. 2021a. Decision 1/CP.26: Glasgow Climate Pact. Bonn, Germany: UNFCCC Secretariat. https://unfccc.int/decisions.

UNFCCC. 2021b. First Biennial Communications in Accordance with Article 9, Paragraph 5, of the Paris Agreement. Bonn, Germany: UNFCCC Secretariat. https://unfccc.int/sites/default/files/resource/cma2021_03E.pdf.

UNFCCC 2022a. Decision 5/CMA.4: New Collective Quantified Goal on Climate Finance. Bonn, Germany: UNFCCC Secretariat. https://unfccc.int/documents/626569.

UNFCCC. 2022b. Reference Manual for the Enhanced Transparency Framework under the Paris Agreement: Understanding the Enhanced Transparency Framework and Its Linkages. Bonn, Germany: UNFCCC Secretariat. https://unfccc.int/sites/default/files/resource/v2_ETFreferencemanual.pdf.

UNFCCC. 2023. “Fifth Technical Expert Dialogue under the Ad Hoc Work Programme on the New Collective Quantified Goal on Climate Finance.” Summary Note. Bonn, Germany: UNFCCC Secretariat.https://unfccc.int/sites/default/files/resource/SummaryNote_TED5_29March_final.pdf.

UNFCCC. n.d. “New Collective Quantified Goal.” https://unfccc.int/NCQG. Accessed December 22, 2022.

UN (United Nations) Treaty Collection. 2023. “Paris Agreement.” July 9. https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXVII-7-d&chapter=27&clang=_en.

U.S. Government. 2022. “Submission of the United States of America: New Collective Quantified Goal.” Bonn, Germany: United Nations Framework Convention on Climate Change Secretariat. https://www4.unfccc.int/sites/SubmissionsStaging/Documents/202203131515---03-22_New%20Goal_USA.pdf.

Vivid Economics. 2021. Net Zero Financing Roadmaps: Key Messages. London: Vivid Economics. https://assets.bbhub.io/company/sites/63/2021/10/NZFRs-Key-Messages.pdf.

Watson, C. 2023. “Options for Embedding Developing Country Needs in the New Collective Quantified Goal on Climate Finance.” Working Paper. London: ODI. https://odi.org/en/publications/options-for-embedding-developing-country-needs-in-the-new-collective-quantified-goal-on-climate-finance/.

World Bank. n.d.a. (Database.) World Bank Open Data. https://data.worldbank.org/indicator/EN.ATM.CO2E.KT. Accessed December 29, 2022.

World Bank. n.d.b. (Database.) New World Bank Country Classifications by Income Level: 2022–2023 of Current Country Classification by Income. https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups. Accessed December 29, 2022.

We are pleased to acknowledge our institutional strategic partners that provide core funding to WRI: the Netherlands Ministry of Foreign Affairs, Royal Danish Ministry of Foreign Affairs, and Swedish International Development Cooperation Agency. This working paper was made possible by the generous financial contribution from the IKEA Foundation.

The author would like to thank the following colleagues who reviewed previous drafts of the paper, provided research support, or were involved at different stages of the development of this working paper: Preety Bhandari, Julie Bos, Esther Choi, Nathan Cogswell, Claudio Forner, Pranav Garimella, Mercyta Glorya, Chelsea Gómez, Lorena Gonzalez, María Lemos González, Zhe Liu, Carolina Rocha, and David Waskow. The author would also like to thank the external reviewers: Carolina Aguirre, María Laura Rojas, Joe Thwaites, and Charlene Watson. A special thanks to Gaia Larsen for her review and inputs throughout the research and writing process.

Natalia Alayza is Manager of Climate Finance in WRI’s Sustainable Finance Center.

Contact: natalia.alayza@wri.org

World Resources Institute is a global research organization that turns big ideas into action at the nexus of environment, economic opportunity, and human well-being.

Our challenge

Natural resources are at the foundation of economic opportunity and human well-being. But today, we are depleting Earth’s resources at rates that are not sustainable, endangering economies and people’s lives. People depend on clean water, fertile land, healthy forests, and a stable climate. Livable cities and clean energy are essential for a sustainable planet. We must address these urgent, global challenges this decade.

Our vision

We envision an equitable and prosperous planet driven by the wise management of natural resources. We aspire to create a world where the actions of government, business, and communities combine to eliminate poverty and sustain the natural environment for all people.

Our approach

Count It

We start with data. We conduct independent research and draw on the latest technology to develop new insights and recommendations. Our rigorous analysis identifies risks, unveils opportunities, and informs smart strategies. We focus our efforts on influential and emerging economies where the future of sustainability will be determined.

Change It

We use our research to influence government policies, business strategies, and civil society action. We test projects with communities, companies, and government agencies to build a strong evidence base. Then, we work with partners to deliver change on the ground that alleviates poverty and strengthens society. We hold ourselves accountable to ensure our outcomes will be bold and enduring.

Scale It

We don’t think small. Once tested, we work with partners to adopt and expand our efforts regionally and globally. We engage with decision-makers to carry out our ideas and elevate our impact. We measure success through government and business actions that improve people’s lives and sustain a healthy environment.