The New Collective Quantified Goal: What advocates need to know

At COP15 in 2009, donor countries set a floor of US$100 billion in climate finance per year to be reached by 2020, which was formalized one year later at COP16 and extended to 2025 at COP21 in 2015. This commitment was pivotal. It was the first time that developed countries had signed up to a collective quantifiable goal to finance climate change actions in ‘developing’ countries. As part of the negotiations at COP21 in 2015, donors agreed to set a new collective quantified goal from a floor of US$100 billion per year by 2025 to support low-income and climate-vulnerable countries. This goal is now referred to as the New Collective Quantified Goal, or NCQG.

As of 2023, however, it is uncertain whether donor countries will meet their original commitment of US$100 billion by 2025. In 2021, according to the OECD, donor countries provided and mobilized US$89.6 billion in climate finance. Furthermore, the OECD claims that the US$100 billion target has likely been met as of 2022, based on preliminary data. Despite this increase, funding for adaptation decreased by US$4 billion between 2020 and 2021, putting in doubt whether donor countries can deliver on their promise made at COP26 to double funding for adaptation to US$40 billion by 2025.

In addition to these uncertainties and with only two years to go until 2025, there is little clarity on the NCQG. Key questions of finance quality, accountability, and flexibility remain open.

In anticipation of climate ministers and envoys coming together at COP28 for a high-level ministerial dialogue on the NCQG, this Donor Tracker Insight will break down the key components of the NCQG and offers insight into challenges and opportunities for advocates ahead of the meeting.

NCQG Development

How is the New Collective Quantified Goal being developed?

The NCQG is expected to be formalized and ratified during COP29 in 2024. Ahead of this deadline, an ad hoc work program for the new goal was set up in 2022 to run for two years. Under this framework, UNFCCC Parties and non-Party stakeholders submit inputs for quarterly Technical Expert Dialogues, which are complemented by annual High-level Ministerial Dialogues. Generally, the TEDs are designed to be inclusive dialogues, and are attended not only by country negotiators, but also feature presentations by experts and engagement with CSOs, international organizations, and many international NGOs via dialogues and breakout sessions.

Each year, two countries appointed by the current COP President serve as co-chairs of the work program. For 2023, Sameh Shoukry, President of COP27, appointed Australia and South Africa as co-chairs. As of November 2023, co-chairs for the 2024 ad hoc work program had not been appointed.

What progress has been made so far?

Similarly to the Glasgow-Sharm el-Sheikh workshops leading for the Global Goal on Adaptation, work on the NCQG has been slow. Despite in-depth discussions in the TEDs and high-level engagement at the Ministerial level throughout 2022, COP27 in November 2022 yielded no concrete results, prompting frustration from many low- and middle-income partners.

In 2023, the TEDs focused on the definition and the scope of the new goal and on some organizational aspects, such as setting up transparency arrangements to track progress. All these suggestions are expected to be formalized during COP28 in Dubai, where the Parties are expected to agree on the future structure of the NCQG.

Despite modest advances in the workplan, major obstacles remain. One of the major issues so far is the lack of any indication as to the magnitude of the quantifiable financial target. After seven TEDs, there is still no concrete amount, or even a range, to guide negotiations. This lack of specificity could mean that the deliberations on the actual number will be rushed if building consensus on a figure is left to the last minute.

Key Debates

What key debates should advocates be aware of?

The failure of donor countries to deliver on the US$100 billion goal so far has led to an erosion of trust in partner countries in donors’ commitment to tackling climate change and supporting a just energy transition. Within this context, four themes have emerged in the Parties’ discussions:

Quantity: Recipient country groups, led by the African Group of Negotiators, have called for an goal in the trillions, based on these countries’ needs. The volume of such a commitment would likely exceed public finance flows, prompting calls from recipient countries to design the NCQG to tap into private finance. While private finance comprised part of contributions to the US$100 billion goal, a lack of guidance on how much and to what extent climate finance should be provided through private finance hampered progress. Other more innovative mechanisms, such as debt swaps, blended finance, levies and taxes, special drawing rights, or policy-based guarantees are also being discussed as potential measures to be included in the NCQG to meet the scale of needs.

Prioritizing LMIC's needs: Agency within and ownership of resource mobilization for partner countries was at the heart of the Paris Agreement, and should guide the NCQG. In light of the complex challenges facing partner countries, the NCQG cannot be limited to an overarching number, but requires a layered approach with quantitative sub-goals. These could include guidance by theme and financial instrument, as also advocated for the Global Goal on Adaptation, or guarantee new modalities to assess and address needs, locally-led action, and direct access to funds for communities without the need of implementing agencies or governments as intermediaries, as suggested for the Loss and Damage Fund.

Flexibility: Discussions have also focused on the need for a dynamic NCQG, including the possibility to increase the goal as new needs and impacts of climate change arise.

Accountability: Finally, both donor and recipient countries have raised calls for better transparency of climate finance—for different reasons. In part, this divide stems from conflicting estimates of how much of the US$100 billion target has been provided: while donor countries seek more information on the allocations and uses of finance, recipients are calling for accessible data on the actual disbursement of climate finance by donors.

Advocacy opportunities

What are upcoming advocacy opportunities for the NCQG?

During the four TEDs in 2024, Parties will have to decide on the concrete elements of the NCQG. The TEDs are therefore potential moments for advocates to influence the process, by submitting contributions before the sessions, and by participating in the dialogues. Through submissions advocates can point to specific themes or thematic areas they would like the dialogues to focus on, and they could provide data, guidance, information, and opinions for the participants to support the negotiations and the discussions. Advocates can also directly participate in the dialogues, as observers and supporters of the negotiators, or as technical experts sharing knowledge and information to help the discussions.

The four remaining TEDs of 2024 will cover a range of issues and questions:

• TED 9: What is the role of public finance in the NCQG? How can public finance provided become more predictable;
• TED 10: What is the link between public finance provided by donor countries and the mobilization of private finance? Should private finance be counted as part of the NCQG, and if yes, how? The discussion will focus on options to simplify and harmonize accounting procedures for all sources and channels of climate finance;
• TED 11: What transparency arrangements are needed for the NCQG? Discussions will likely center on the definition of climate finance, methodologies, and accounting approaches; and
• TED 12: This dialogue will focus on the financial mechanism of the UNFCCC to improve access to finance for recipient countries and include a retrospective on the process leading to the NCQG.

Additionally, the 3^rd High-level Ministerial Dialogue will take place in 2024 and will mirror the issues and questions that have been discussed at the TEDs, including:

• Assessment of political acceptability and feasibility of the technical proposals;
• High-level views on the inclusion of mobilized private finance in the goal and on the level of specification of sources, channels, instruments, and models of finance in the NCQG; and
• Recommendations for the transparency arrangements of the NCQG, including the use of one or several definitions of climate finance, and the use of methodologies and accounting methods.

The High-level Ministerial Dialogue will be attended by ministers or heads of delegation and other high-level representatives from intergovernmental and non-governmental organizations. All participants will provide recommendations on revisions and changes to the structure of the NCQG based on the new cycle of technical and high-level discussions throughout 2024.

Why is COP28 important?

All deliberations will be fundamental for reaching a common and official decision on the NCQG at COP29, which constitutes the final moment for advocates to potentially contribute to the outcome of this fundamental issue.

Advocates hope that the discussions at COP28 in Dubai will lead to an effort of coming to an agreement on initial cornerstones of the goal and thus lay the ground for consensus at COP29 in 2024. The NCQG should build on the deliberations and commitments coming from the GGA, the operationalization of the Loss and Damage Fund created during COP27, and the information coming from the Global Stocktake, as well as other processes, to ensure a comprehensive, accessible, and transparent, and finally quantitative goal on climate finance.