ECO has been waiting excitedly to engage in THE hot finance ticket for week two (and practising it aloud every morning in anticipation): the second Technical Expert Dialogues for the New Collective Quantified Goal (NCQG). ECO has also been thinking hard about the new goal, and we’ve come up with four elements, to ensure we can not only successfully say N-C-Q-G, but that the technical expert dialogue is successful.
First up, loss and damage finance: the world has changed in the 13 years since the politically determined USD$100 billion goal was set, and the climate crisis has worsened significantly – in part because of the failure to provide much-needed funds to avert and minimize the climate crisis and its effects. Loss and damage is not a future problem but a now problem, and so loss and damage finance must be part of the NCQG. The NCQG must incorporate all elements of climate finance (mitigation, adaptation and addressing L&D), and none of them can be traded off for another.
The new goal should support systems-transformation. Anchoring elements in the goal to incentivise the right kind of innovation and deliver real shifts in the global financial system will be crucial. Delivering on Article 2.1c means climate action, but it also means supporting the right to sustainable development, shifting power and finance to the local level and the inclusive leadership of youth, women, and Indigenous Peoples. It should also mean following the ‘polluter pays principle’ to drum up new sources of finance – ECO will be watching closely for these to be used as new and additional finance, as existing budget capacities should fill current gaps. ECO knows that focusing only on the numbers is not enough because it’s not just about the quantity, but the quality of the finance. Effective climate finance is rights-based, gender responsive, and people-centred. Alongside shifting financial flows, the NCQG must have a specific support dimension (read grants not loans) and should emphasise maximum accessibility at the local level. This requires the NCQG to be adequate, equitable, fair, and intersectional.
Accountability: Let’s not repeat the mistakes of the past with the NCQG. ECO reminds you that accountability is essential for trust. That means more transparency on the finance provided, how it’s provided, and what it’s supporting. It also means clarity around climate finance that is new and additional to official development assistance commitments. It also will require a shorter timeframe for both provision and review. The NCQG timelines should be more aligned with the GST and replenishment cycles of the financial mechanisms.
The goal should be developed according to the best available science and developing country needs. The process should be informed by their Needs Determination Reports, the IPCC, and other institutional sources, but also debt vulnerability assessments and more qualitative resources so that the goal can be designed to deliver finance through modalities that truly support development and unlock climate action and don’t lock countries into higher debt levels. Responding adequately to the needs of developing countries will require the new goal to differentiate between support provided to developing countries and other forms of finance mobilised. The new goal should be firmly linked to Article 9 of the Paris Agreement in its entirety and contributor countries’ continuing obligations under the Convention.
So there you have it; just pursue these four elements, and we’ll be off to a good start of the N-C-Q-G here in Bonn!