What’s new on the NCQG?

Insights from COP28 on setting the new climate finance goal

By Mahlet Eyassu Melkie

What is the NCQG?

The New Collective Quantified Goal (NCQG), a new global climate finance goal that will be set by the end of 2024, was one of the most important finance agenda items during the 28th session of the Conference of the Parties (COP28) that took place in December 2023. Developed countries in 2009 agreed to the goal of mobilizing $100 billion annually by 2020 to support climate actions in developing countries. In 2015, with the adoption of the Paris Agreement, Parties agreed to set a new finance goal that reflects the needs and priorities of developing countries before 2025 while extending the existing $100 billion goal to 2025. The process of establishing the NCQG was initiated at COP26 in 2021 with an ad hoc work programme that was designed to facilitate inclusive technical discussions to run until the end of 2024. The meeting in Dubai was critical in taking stock of where things are in setting the goal while ensuring that Parties were on track for a successful outcome at COP29.

Setting the stage for COP29

As per the Parties decision, the NCQG must consider the needs and priorities of developing countries and include, among other things, quantity, quality, scope, and access features of the goal and transparency arrangements as well as sources of funding. Under this work programme, so far eight Technical Expert Dialogues (TEDs) were held. These dialogues bring together experts from governments, academia, NGOs, private sector, and other stakeholders to provide critical inputs following a structured workplan developed yearly by the designated co-chairs of the programme. The first TED gave the Parties and other stakeholders the opportunity to map out the various issues that need to be addressed to arrive at a consensual decision at COP29.

The dialogues that followed focused on these different identified elements of the NCQG, which were captured by the co-chairs in their reports. Dialogues picked up in 2023 and covered some of the most critical and controversial aspects of the goal, including its time frame, structure, amount, the mobilization and provision of various financial sources, quality, and transparency arrangements. While conversation ranged to both positive and negative aspects of various suggestions, there was no narrowing of options — ultimately leaving all options on the table.

The last TED, held a day before the official start of COP28, took stock of discussions in 2023 and identified challenges and lessons learned from the process. Regarding the outlook for 2024, there was a consensus that there needs to be a change in the mode of work — from technical to political.

COP28: Process over substance

COP28 represented a critical moment for the NCQG, as Parties recognized the ad-hoc work programme was not conducive to negotiation as the TEDs were designed to be purely technical in nature, limiting how much can be accomplished between COPs. Given that the structure of the ad-hoc work program including the TEDs was carefully negotiated at COP26, a redesign was unlikely. However, in Dubai, Parties ultimately agreed to transition to a mode of work that enables the development of a draft negotiating text at the back-to-back meetings that will be held after each TED for Parties’ consideration at COP29 — while noting that this does not set a precedent for other processes.

With just one year remaining for setting the new finance goal and just a few hours of negotiation allotted at COP29, some developed and developing Parties insisted on agreeing at COP28 on some substantive issues in addition to switching the mode of work. They argued that the NCQG’s time frame, structure, transparency arrangements, and scope should be agreed upon during the negotiations at COP28. Unfortunately, any discussion on substance was stalled as negotiators ultimately couldn’t move beyond procedural issues.

Most Parties were of the view that the elements of the NCQG are interlinked, which makes it difficult to agree on any of the substantive elements individually. For instance, time frame is directly linked to the structure and quantity of the goal. Acknowledging that “nothing is agreed until everything is agreed” in the UNFCCC negotiations, Parties at COP28 should have at least captured in a decision progress made during the TEDs by narrowing down and/or merging options on the basis of the reports of the co-chairs. With all the options for each element of the NCQG still on the table, Parties will need to make the most of their limited time in 2024.

2024: A critical year

2024 is a critical year for the NCQG but failing to set an ambitious goal by COP29 would increase distrust between Parties when recent outcomes of the Global Stocktake call for urgent action. As per the COP28 decision, at least three TEDs will be held to allow in-depth discussion on the elements of the NCQG, as well as at least three meetings held back-to-back with the TEDs where parties can craft the framework for a draft negotiating text. To develop this text, the ad hoc work programme will need to build on the technical work conducted and submissions made by Parties, while also providing an opportunity for deliberations among Parties. These meetings will be conducted in an open-ended, inclusive, and Party-driven manner and remain open to observers.

With 2024 being the final year of the ad-hoc work programme, it is essential to change the mode of work and conduct additional meetings to allow for Parties to draft the negotiation text. Parties should take this opportunity to make sure they are represented at least through their negotiation group representatives, as not all Parties could attend the TEDs and the following meetings. It is imperative that progress is made in these meetings and that Parties accept the draft negotiation text as a basis for negotiation at COP29.

On high-level political engagement, most Parties were of the view that there should be early political engagement and wanted to include in the COP28 decision a request for the incoming COP Presidency to start engaging Ministers in early 2024. Early involvement of ministers would facilitate progress in granting the negotiators the mandate to settle some of the contentious issues throughout the year. However, giving this specific guidance to the COP Presidency on the matter was not supported by all as some felt that Parties should not dictate how Presidencies undertake their work.

Ultimately, Parties emphasized the need for effective, inclusive, and meaningful political engagement, including but not limited to the high-level ministerial dialogue (HLMD) to be held well in advance of COP29. As a result, the 2024 HLMD on NCQG will be convened well before COP29. Hence it is important that different Ministerial events inside and outside the UNFCCC in 2024 (Copenhagen Climate Ministerial, Petersburg Dialogue, Pre-COP etc…) address the NCQG, and ministerial engagement is not left just for the HLMD.

Parties also agreed that the co-chairs from 2023, Zaheer Fakir (South Africa) and Fiona Gilbert (Australia) will extend their tenure in 2024, and they were requested to provide a workplan based on submissions by Parties no later than March 2024. The co-chairs were also asked to include in their annual report a substantive framework for a draft negotiating text capturing progress made for consideration by Parties at COP29. The decision to continue the mandate of the co-chairs for another year is commendable, as it guarantees building on the trust they have gained from Parties and consistency of the previous work undertaken in 2023.

Moreover, 2024 will see a variety of important reports published, including the second report determining the needs of developing countries, the second report on progress toward achieving the goal of mobilizing USD100 billion per year, and the 6th Biennial Assessment and Overview of Climate Finance that will feed into and inform the NCQG process. Parties will have to formally take into consideration these findings as well as, per the COP28 decision, the outcomes of the Global Stocktake (GST) and Global Goal on Adaptation Framework.

The lead up to COP29

Parties in their work in 2024 must ensure that the technical work that is undertaken in the TEDs feeds into the drafting of negotiating text at the back-to-back meetings. Parties, noting that they have limited negotiation time to set the new goal, should make use of these meetings to narrow down options and work toward a draft negotiation text that will be used as a basis for negotiation at COP29. The co-chairs will have to also make sure that discussion and progress during the TEDs and meetings are properly captured in their reports for a successful outcome at COP29. The current and incoming COP Presidencies should also communicate that an ambitious NCQG will be an integral part of a successful COP29 outcome and work toward that by elevating it to a higher political priority.

Learn more about CFAN’s work on the NCQG