Current climate finance estimates 'flawed' with 'political assumptions', study calls for new goal

New Delhi, Nov 18 (PTI) Developing countries require between USD 1 trillion to 1.5 trillion a year to meet climate goals, according to a new study which "exposes flaws in existing methods for estimating climate finance needs".

The study, published in the journal 'npj Climate Action', revealed that political assumptions embedded in current estimates significantly underestimate the grant-equivalent funding required, particularly for the Global South, authors said.

The findings amplified calls from climate advocates and nations in the Global South for an ambitious New Collective Quantified Goal (NCQG) at COP29, the authors from Germany and Morocco said.

Further, the study noted the shortcomings of the International High-Level Expert Group findings, notably in terms of expectations on developing country taxpayers and the underestimation of grant-equivalent funding needs, they added.

Critiquing the equity and transparency of current climate finance assessments, the authors called for replacing the outdated USD 100 billion annual climate finance commitment.

"Climate finance estimates fall alarmingly short of actual needs. Introducing a grant-equivalent metric, we now see that developing nations require USD 1-1.5 trillion annually to confront the climate crisis -- a figure far beyond prior assumptions," author Andreas Sieber, Associate Director of Policy and Campaigns at 350.org, Germany, said.

The authors also found that current needs for supporting an equitable and just energy transition in line with meeting the 1.5 degrees Celsius warming targets -- such as those partially published by the International Energy Agency (IEA) -- are understated, possibly "by a factor of five".

"Particularly alarming are assumptions made regarding the energy sectors -- we find the International Energy Agency understated the support needs for a just energy transition by a factor of five in some publications, inconsistent with its finance needs assessments in its other publications. Clearly, numbers put forward by the High-Level Panel on Climate Finance cannot be the ceiling but rather the absolute minimum," Sieber said.

The authors built on the IEA's figures to suggest new grant-equivalent finance needs for energy transition in developing countries and also challenged the agency to go beyond selective discussions of public finance for private finance mobilisation.

In the absence of a decisive increase in international public funding for grants and concessional finance, developing countries will be essentially paying for a crisis they did not create, especially in terms of adaptation and loss and damage costs, which alone come to at least around USD 1 trillion per year, the authors said.

"Delivery of COP28 aims will depend on finance, and COP29 is poised to be a pivotal crossroads for climate finance. The mandate from COP21 is to replace, before 2025, the expiring USD 100 billion per year target set in Copenhagen in 2009 -- with a New Collective Quantified Goal (NCQG)," they wrote. PTI KRS HIG HIG