A ten-point agenda for COP29…..Sherry Rehman
As countries begin preparing for COP29, all states are looking to enhance their NDC (Nationally Determined Contributions) ambitions and report on progress at Baku in November.
Developing countries, however, are also focusing on the event as an opportunity to leverage what is billed as the Finance COP, for seeking higher resourcing commitments for their resilience and mitigation agendas. Assessments on the Loss and Damage Fund progress will also be on the agenda, while revised targets for New Collective Quantified Goals will be set, to potentially scale up the level of financing countries can access through green financing channels.
Since 2022, when Pakistan led the Global South at COP27 in Sharm-al-Shaikh after its catastrophic flooding, seeking a new bar for funding small emitters that face disproportionate losses has become a global norm. At the heart of this Loss and Damage discourse is the rising call for climate justice, yet two years down the line the newly constituted Fund struggles for both funding and leadership.
While the scale of need rises exponentially at the global level into trillions of dollars, green funding remains both projectised and hard to access, it also sits at embarrassing levels of capitalisation by many donor countries. The Loss and Damage Fund, for instance, is only pledge-funded at $770 million, while countries like Pakistan alone are at a needs assessment of $30 billion from the last catastrophe in 2022. For building resilience by 2030, Pakistan will need $348 billion according to the World Bank.
Pledges will once again be the cornerstone of negotiations and outcomes. Since this an ‘Enhancing Ambition’ and ‘Enabling Action’ COP, the focus will be on NDCs and financing. Countries will be asked to present ambitious, comprehensive and robust NDCs, National Adaptation Plans and Biennial Transparency Reports. At this point, about 75 per cent of states have set net-zero targets, which account for 98 per cent of global GDP and 88 per cent of GHG emissions, yet global emissions are rising by over 10 per cent even for a deadline of 2030, which is really going to be the decisive decade for many developing countries on the frontlines of climate change.
Globally, the funding shortfall for climate action remains staggering. The data is patchy and likely under-represented. UN estimates suggest that $125 trillion is required to be spent globally to reach net zero emissions by 2050. For climate adaptation, which is possibly the only way for developing countries to survive the decade, the scale and importance is often ignored by the developed countries as a priority.
At current levels, with global warming going up instead of down, the world will need to spend a maximum of $340 billion per year by 2030, reaching $565 billion by 2050. Just for perspective, the UNFCCC’s Standing Committee on Finance’s first report on the financial needs of countries says that $6.8 trillion is required by 78 developing countries alone to meet their financing needs to fulfil their NDCs.
Given that Pakistan is on the frontlines of climate impacts, instead of business as usual, Pakistan must insist on asking what the big emitters have done to lower their emissions. The facts are stark, with the UN warning of a catastrophic 3.0 C rise, very far from the 1.5 C above industrial levels as agreed at the Paris Conference in 2016. While Pakistan’s National Adaptation Plan may need extensive coordination and financing to enable impacts across a mountain to delta environment especially at local levels, the surge in warming is not in any small emitter’s control.
There is also no confusion about how Pakistan’s mega-flooding was triggered, according to the World Weather Attribution Group, which says it was clearly climate-linked. The human cost has been incalculable, but so has the financial. A UN study also suggests that Pakistan will have the highest projected GDP loss from climate change in the South Asia and Southwest Asian regions, reaching 9.1 annually under worst-case scenarios. Given this context of deficits, Pakistan should not have to scale up its Nationally Determined Contributions, because of an unrealistically high ambition set in 2021, which aimed to reduce GHGs by 50 per cent by 2030. The goal was to cut emissions nationally by 15 per cent through own resources, and an additional 35 per cent of reductions conditional on international support, both financial and technical.
So what should Pakistan be seeking this time, from a Conference of Parties which has now become globally the most important forum for multilateral negotiations? With 106 heads of state showing up, the heat and light generated by just the media will be unprecedented. First, the call for climate justice must not be allowed to drown in the cacophony of ‘practical solutions’ that are often impractical, piecemeal and circular. Green funding must not be inaccessible or offered on such a small scale that it is usable only for pilot projects.
Second, redefined limits for NCQG must not be sidestepped in jargon that delays funding in long, projectised, competitive bidding for countries like Pakistan seeking urgent interventions in the resilience and climate space. The regular overseas development aid disbursed by developed countries must not be disguised as green finance in the absence of a definition for ‘climate financing’.
Third, Loss and Damage leadership must be urged to speed up its accreditations and criteria for funding, let alone capitalisation and disbursal for extreme events. It cannot become another body where funds disappear in a long projectisation process, with neither the agility or speed that countries face today. When disaster strikes, Pakistan has to repurpose all development, social and climate financing for humanitarian responses. Nothing is left to build ‘resilience’ infrastructure, which typically costs four times as much as regular infrastructure, but remains a strong investment per dollar for future impacts.
Fourth, debt cannot become the acceptable new normal in climate financing, especially for economies already impacted by exogenous shocks as well as high commercial and development debt. Loans as resilience financing are not the way forward, nor are calls to seek only private investment as a way around the reality that international public funding has failed egregiously to meet targets. Why? Because markets only rush to the investment frontlines where they see capacity and profits, obviously the missing link in low-governance environments.
Fifth, the country must push for global financial buffers that can enable the de-risking of climate investments by impact funds and consortiums that specifically work to limit volatility in returns to blended fund and climate equity investors. GCF’s approval of a $50 million fund for venture accelerators is a case in point, where the fund will absorb first-loss equity as anchor investor. This tool needs to be scaled up, with financial backing.
Sixth, given that Pakistan has already started using Rule 6 of the Paris Agreement, it must seek to build space for higher global and financing attention on fair carbon markets trade which can create neutrality successes, with the UNFCCC coming in as a third party for updated methods of Rule 6.4. and high-integrity data.
Seventh, while reclaiming land and ecosystems that have been depleted by non-circular consumption and waste Pakistan can seek substantive ‘good faith’ investments in water-reclamation projects such as the Living Indus Initiative from green public financing channels because global water pollution is not Pakistan’s problem alone, especially after decades of stealthy, unrecorded monumental dumping of waste by rich countries on less wealthy shores.
Eighth, Pakistan must also ask for transparency and higher concessional assistance from MDBs in reforming the way they disburse financing. Financial architecture reform is already on the global agenda since Paris 2023, but no transformational change has rolled out. Grants have almost faded away, which were part of the mandate of MDBs as part of development financing. Other new tools such as the IMF’s Catastrophe Containment and Relief Trust fund remain elusive and need to apply to middle-income countries too, if one-third of their population is impacted for instance, and become more flexible like its RST (Resilience and Sustainability Trust), which Pakistan is still seeking to access.
Ninth, while the country is quietly going renewable via the private sector and an enabling solarisation regulatory regime, mitigation plans can profit more by seeking funding and technical aid for designing a possible JETP (Just Energy Transition Package) option, as Indonesia has done. Assistance can be sought by the Power Ministry for consortium design and support.
Finally, Pakistan should convene a meeting of the Global South states and alliances to build momentum and consensus for a new category of deliverables, pitched as Internationally Determined Contributions. These would cluster around all the unfulfilled financial pledges made by the developing countries, and measure them every year in a finance stocktake, for the simple reason that, while emissions continue to rise even at the 29th COP, the financing gap for the fractional emitters is also growing. If NDCs are to be measured, it’s time IDCs were too.
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