COP29: Achieving Fair Climate Finance to Deliver Resilience, Ambition and a Just Transition Annual Policy Document

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COP29 Expectations Document (Annual Policy Document): Achieving Fair Climate Finance to Deliver Resilience, Ambition and a Just Transition

Ten years into the Paris era of climate action, the world has a lot of catching up to do. Impacts of climate change, driven by fossil fuel use, have continued to escalate in frequency and intensity, disrupting and devastating especially developing countries and populations that have been made vulnerable and that bear the least responsibility in the genesis of the climate crisis. This year is once again on its way to becoming the hottest on record, fuelling devastating impacts including heatwaves, floods, cyclones and wildfires driving deprivation and vulnerability, especially among communities on the frontlines of the climate crisis that face economic, social and political marginalization. Meanwhile, the decline of polar ice and the deterioration of the state of ecosystems on which we all rely remain alarming as ever. Despite the clear evidence of a spiraling crisis, the scale of the response so far has been woefully lacking.

This year, the ‘Year of Finance’, must be a turning point. COP29 carries the potential to decide the direction and fate of climate action as outlined in the Paris Agreement and the outcomes of the first Global Stocktake. COP28’s agreement to transition away from fossil fuels and COP27’s establishment of the Fund for Responding to Loss and Damage, lack funding. Adaptation action has also remained underfunded, with an ever-widening gap between the needs and availability of resources, especially to frontline communities bearing a disproportionate burden of the impacts of climate change. Finance is the only way to enable global climate action that will put the world on a path to limit global temperature rise to 1.5°C, enable adaptation, and address the now unavoidable loss and damage from climate change impacts falling on those least responsible.

The task confronting Parties and negotiators at COP29 is not only to set a quantitative goal for climate finance,, but to substantiate it with the high qualitative standards needed to facilitate rapid and just climate action in a way that works for all. This would need Parties to recognise justice, equity and fairness as non-negotiable dimensions underpinning the decision that unlocks the means of implementation for climate action. Failure would all but guarantee the political defeat of collective climate action and a travesty of historic proportions.

Baked into the importance of the ‘COP29 moment’ is also an undeniable opportunity to unlock the necessary scale of collective climate action, and the just and equitable approaches that respect and preserve the spirit of the UN Convention Framework on Climate Change and the Paris Agreement. COP 29 is a ripe moment for Parties to actualise this spirit in a way that upholds human rights and the interests of those at the frontlines of climate impacts and the collective response to the climate crisis. There is no climate action without justice.

Summary of key demands

On achieving need based and equitable climate finance in the context of the NCQG: Finance is a deciding factor of climate action. The quantity, quality and accessibility of finance will considerably dictate the future of climate action implementation. Heading into the pivotal negotiations on a new goal on climate finance, CAN demands:

• An NCQG structure that guarantees a public finance provision goal of a minimum public finance provision target of $1 trillion per year, measured in grant-equivalent terms, to be delivered predominantly in grant-based funding from developed to developing countries. The goal should cover all thematic subgoals of mitigation, adaptation, and loss and damage (L&D), with targets for the provision of public finance for each.
• Alignment of the Goal with inclusive just transition pathways, in the context of a larger accumulating climate debt.
• A finance goal that embodies strong and principled qualitative elements (such as additionality, predictability, access but also affordability and non-debt inducing finance).
• Recognition of tax justice and ‘polluter pays’ principles within the frame of equity and common but differentiated responsibilities and respective capacities (CBDR-RC). This means developed countries should take the lead in reorienting their existing public finances to do no harm, and pursuing tax justice for new sources to be able to provide new and additional climate finance under the NCQG.
• The formulation of transparency and accountability as core principles, which implies, among other things, agreeing on the definition of climate finance and on a fit-for-purpose Enhanced Transparency Framework (ETF).

On securing climate justice and equity: CAN sees the Just Transition Work Programme (JTWP) as ideally placed to ensure the justice dimension of the transition towards a fossil-free, fairer, safer, cleaner and more peaceful future is delivered. And to ensure this at COP29, the decision on the JTWP must recommend actions based on the Dialogues and agree to deliver a Just Transition Action Plan by COP30.

The Just Transition Action Plan could cover two key dimensions:

• Securing rights and a shared understanding of what elements of justice any just transition plan should contain.
• Delivering on international cooperation to Make Just Transition Happen

On politically elevating Adaptation to Reduce Vulnerability: While the Paris Agreement is clear in its guidance for adaptation to be treated and financed on par with mitigation, there has been little concrete progress in this regard and so at COP29 CAN demands:

• That developed countries urgently scale up the provision of adaptation finance to developing countries based on the current needs with a clear roadmap for its delivery and implementation plan.
• Parties start discussing the need to establish a permanent agenda item on the Global goal of Adaptation (GGA) to elevate political attention to adaptation.
• On the UAE- Belem Work Programme (UBWP) on indicators, that parties must agree on the work plan for 2025 to fully operationalise GGA by COP30 and include language on Means of Implementation (MoI), especially on finance with targets and indicators in UBWP.
• That the NCQG, through a sub-goal on adaptation, should formally link the provision of climate finance in achieving targets under UAE Framework for Global Climate Resilience and ensuring that the GGA is embedded in the NCQG.
• All parties (developed and developing) to formulate and update their National Adaptation Plans (NAPs) by 2025 with developed countries agreeing to provide finance, technology transfers, and capacity-building support to developing countries to formulate and implement their NAPs.

On Addressing Loss and Damage (L&D):A clear commitment from developed countries to scale up new and additional public finance to address loss and damage is urgent. To ensure this, CAN demands that at COP29:

• A subgoal on Loss and Damage in NCQG is established to provide a solid foundation for L&D finance under the UNFCCC regime.
• The World Bank must be confirmed as the interim host of the Fund for four years, and parties must provide guidance to the Fund for responding to Loss and Damage (FRLD) Board including recommendations for the adequate capitalisation of the Fund at scale, activities to be funded, and maximising access to funding for Indigenous Peoples, frontline communities, local CSOs, groups experiencing marginalization and people living in poverty.
• The Warsaw International Mechanism for Loss and Damage (WIM) through its third review discuss the need for a L&D Gap report and provide recommendation on the same.

On transforming Energy system and for Just and Equitable 1.5°C aligned NDCs: Countries are expected to deliver their next Nationally Determined Contributions (NDCs) in 2025. Although the first Global Stocktake (GST) has provided critical guidance on the elements that should inform countries’ ambitions, the appetite for delivery on these has thus far been woefully lacking. For countries to deliver ambitious, equitable and just climate plans that are aligned with 1.5oC by the February 2025 deadline, we need the following:

• The COP Presidency must ensure that COP29 leads the NDC enhancement process through providing a ‘Roadmap for 1.5 & Climate Justice**’**. This roadmap on the one hand should include guidance to countries on how to ensure alignment of NDCs with climate justice and 1.5 degree pathways at national levels as well as how international cooperation will support the implementation of NDC’s.
• The mandated discussion on NDC Features at COP29 must reflect on how the outcome of the first Global Stocktake (GST) will be integrated in NDCs.
• The Mitigation Work Programme (MWP) has thus far not delivered on its mandate to urgently scale-up pre-2030 ambition even as the GST outcome provides guidelines for post-2030 mitigation pathways. Parties should consider reformulating/redirecting the embattled MWP towards concrete proposals on delivering on the GST mitigation outcomes.
• The UAE Dialogue, or any other high-level convening in its stead, must provide clear signals on the linkages between access to climate finance and the ability of nations to prepare and implement just, equitable and ambitious NDCs and LT-LEDS that deliver progress on the outcomes of the GST, including transitioning away from fossil fuels and realising a fair, fast, and funded phase-out of all fossil fuel production and consumption.

On Article 6 and market-based mechanisms: While NCQG negotiations take centre stage at COP29, the long standing agenda item on Article 6 is expected to see some decisive resolution on the rules for trading and reporting emission reductions. CAN would like to:

• Demand that Article 6 must guarantee the protection of human rights and the rights of Indigenous Peoples, and secure an inclusive, participatory approach including the establishment of grievance redressal mechanisms and options for freezing, cancelling and replacing Internationally Traded Mitigation Outcomes (ITMOs) in the event of repeated reporting inconsistencies on human rights-related aspects
• Underscore that revenues resulting from the trade of mitigation outcomes do not constitute climate finance, nor substitute for the climate finance commitments of developed countries
• Emphasise that Article 6 must be used by Parties to raise rather than displace ambition
• Demand that any agreement(s) on Article 6 must entail the highest standards of integrity and guarantee transparency, especially as it pertains to avoiding double counting and other accounting inconsistencies

Finally, Respect for Human Rights and Justice should be core principles at COP29. The UN, the UNFCCC Secretariat, the COP29 Presidency,the Azerbaijan government and all Parties should guarantee freedom of expression and of peaceful protest for all participants during and after COP29.