Climate Financing under the Paris Agreement
Context:
At the COP30 climate meeting in Belem, Brazil, India, speaking on behalf of the BASIC and LMDC countries, stressed that a lack of adequate climate finance continued to be the biggest stumbling block in enhancing global climate action
India and other developing nations called for the full implementation of key finance provisions in the Paris Agreement
Key Finance Provisions & Principles
Article 2.1(c): This is a holistic goal of the Paris Agreement that aims for making finance flows consistent with a pathway towards low greenhouse gas (GHG) emissions and climate-resilient development
It covers all finance flows—domestic and international, public and private
It requires scaling up good finance (e.g., renewables) while also scaling down funding for carbon-intensive activities like new coal plants
Article 9.1:
This article states that developed countries shall provide financial resources to developing countries to assist with both mitigation and adaptation
Common But Differentiated Responsibilities (CBDR):
This is the architecture and cornerstone principle of the agreement.
It means all countries must act, but without compromising on national economic-development priorities.
Current Contentions
Inadequate Funding:
At the finance deal in Baku (COP29), developed countries agreed to the New Collective Quantified Goal (NCQG), collectively mobilising $300 billion a year from 2035.
The Finance Gap:
Developing countries were deeply disappointed having demanded $1.3 trillion a year.
They view the $300 billion figure as reneging on agreed commitments
Article 2.1(c) vs. 9.1:
Developing countries have expressed skepticism about a focus on Article 2.1(c) (all flows), fearing it could lead to developed countries shying away from their commitments and obligations under Article 9.1 (to provide finance).
They also worry it could lead to conditionalities or barriers to access financial support