COP29 ended with mixed reactions and takeaways, and discussions have already turned towards COP30, which will be hosted in Belem, Brazil.
COP29 ended with mixed reactions and takeaways, and discussions have already turned towards COP30, which will be hosted in Belem, Brazil.
Among the notable outcomes of this year's Conference of Parties (COP) was the draft decision on the New Collective Quantified Goal (NCQG). While the NCQG has initiated a conversation about the future of climate finance grounded in principles of equity, justice, and the polluter pays principle, it fell short of the expectations of many delegates and observers.
The establishment and operationalisation of the NCQG depend on several global factors, with its political and economic dimensions being particularly critical. The political economy surrounding the NCQG for climate finance is a delicate and intricate domain that intertwines global climate ambitions with the financial realities faced by both developed and developing countries.
At its core, the NCQG represents an ambitious effort to address the significant financing gap in climate action, particularly for vulnerable nations bearing the brunt of climate impacts. For a country like Pakistan, which faces immense climate vulnerabilities, the NCQG presents both challenges and opportunities, necessitating strategic engagement at the international level and a robust domestic policy framework to capitalise on its potential.
The NCQG builds on the prior commitment of $100 billion annually, initially outlined in the Copenhagen Accord, and aims to significantly scale this up to $300 billion annually by 2035. This enhanced target seeks to address the growing adaptation needs of developing nations experiencing the severe impacts of climate-induced disasters such as floods, droughts, and rising sea levels.
Unlike its predecessor, which was criticised for failing to meet actual needs, the NCQG aims to cover a broader spectrum, including mitigation, adaptation, loss and damage, and just transitions. Nevertheless, critics argue that even the $1.3 trillion target, with $300 billion expected from developed nations, remains insufficient to meet the financial needs for comprehensive climate action and adaptation.
For developing countries like Pakistan, these funds are essential for building resilience and tackling systemic climate risks. However, concerns persist over the financial model’s reliance on private sector investments, which can be challenging for developing nations to access and may dilute the equity principles enshrined in the Paris Agreement.
Pakistan occupies a unique and challenging position in the global climate finance discourse. Despite contributing minimally to global CO2 emissions -- though it is among the top 10 methane emitters -- the country bears the devastating consequences of climate change, including rising temperatures, extreme weather events, and biodiversity loss. Under the principle of "common but differentiated responsibilities and respective capabilities" (CBDR-RC), Pakistan is expected to contribute to global efforts by leveraging Just Energy Transition Initiatives (JETIs).
These challenges highlight the urgency for Pakistan to advocate for greater financial support and more inclusive mechanisms within the NCQG framework. The country’s Nationally Determined Contributions (NDCs) set ambitious targets, such as a 50 per cent reduction in greenhouse gas emissions by 2030. However, financing these goals remains a significant obstacle.
Pakistan prioritises adaptation measures, including flood management, climate-resilient agriculture, and disaster preparedness, which are vital for protecting its vulnerable populations. Despite clear needs, there is a persistent gap between financial commitments made by developed nations and the actual resources reaching countries like Pakistan.
The political dynamics of NCQG negotiations are further complicated by the broader international context, particularly the role of major players like the United States. Historically, the U.S. has been a key actor in global climate negotiations, and its domestic political shifts have had profound implications for frameworks like the Paris Agreement. For instance, former President Donald Trump’s withdrawal from the Paris Agreement in 2017 undermined global confidence in the commitment of developed nations to fulfill their climate finance obligations. His administration’s opposition to multilateral agreements raised doubts about the reliability of frameworks like the NCQG.
By leveraging innovative financing mechanisms, strengthening governance frameworks, and building strategic alliances, Pakistan can ensure that the NCQG's ambitious goals translate into tangible benefits for its people and ecosystems
In contrast, the Biden administration's return to the Paris Agreement and renewed commitment to climate action offer a potential opportunity for countries like Pakistan to secure more robust financial commitments. However, with Trump poised for another presidential run, concerns about the future of US climate leadership are re-emerging. For Pakistan, this underscores the importance of building alternative climate alliances and engaging strategically with other developed nations to ensure stable and predictable financial flows.
The NCQG's political economy is also defined by the tension between developed and developing countries over the principles of additionality and non-debt-creating financing. Developed nations, particularly those in the European Union, often advocate for mechanisms that emphasise private sector and market-based solutions to address the financing gap. While these mechanisms have their advantages, they frequently fail to align with the needs of developing nations, which require concessional financing, grants, and low-cost loans to address acute climate challenges.
For Pakistan, one significant measure in this context is the Article 6 negotiations at COP29, which focus on operationalising integrity-based, high-quality carbon markets. These mechanisms hold potential but require careful advocacy to ensure alignment with the principles of equity and accessibility.
Pakistan’s ability to benefit from the NCQG depends heavily on its domestic preparedness to absorb and deploy climate finance effectively. This involves developing a pipeline of high-impact climate projects in areas such as renewable energy, early retirement of coal power plants, water resource management, and climate-resilient infrastructure. By strengthening partnerships with multilateral development banks (MDBs) and bilateral donors, Pakistan can position itself as both a recipient of climate funds and an active participant in shaping the terms of financial flows.
The Climate Vulnerable Forum (CVF) has been instrumental in amplifying the voices of vulnerable nations like Pakistan. Building on this momentum, Pakistan must formulate a comprehensive ‘Climate Prosperity Plan’ (CPP) that integrates climate-smart interventions with broader development priorities. The country should also explore innovative financing mechanisms, such as green bonds, blended finance, and Just Energy Transition Partnerships, to attract private sector investments that complement public funding. Strengthening institutional and technical capacities will be crucial for ensuring transparency, accountability, and the efficient utilisation of climate finance.
The NCQG represents a significant step forward in addressing the global climate finance deficit, with its potential hinging on the evolving political and economic landscape. Key features of the NCQG include a broader scope that encompasses adaptation, loss and damage, and just transitions. By mobilising funds from diverse sources -- public, private, bilateral, multilateral, and innovative mechanisms -- the NCQG seeks to reduce reliance on traditional public finance channels and unlock private sector investments.
Moreover, the framework emphasises alignment with national priorities, ensuring that financial flows are need-based and context-specific. It also stresses inclusivity, equity, and reforms within multilateral institutions to streamline access to concessional finance. For Pakistan, aligning NCQG funding with national climate policies will ensure coherence and the prioritisation of critical projects, particularly in adaptation and loss and damage.
The NCQG also presents an opportunity for Pakistan to advocate for targeted support in areas such as loss and damage recovery and just transitions in the energy sector. Proactive engagement with multilateral development banks, coupled with stronger bilateral and South-South partnerships, will enable Pakistan to position itself as a leader in climate resilience within South Asia and beyond.
While the NCQG holds promise, its success in delivering meaningful support to vulnerable nations like Pakistan will depend on a combination of international advocacy and domestic preparedness. By leveraging innovative financing mechanisms, strengthening governance frameworks, and building strategic alliances, Pakistan can ensure that the NCQG's ambitious goals translate into tangible benefits for its people and ecosystems.
Transparency, accountability, and inclusivity must remain at the forefront of these efforts to maximise the impact of climate finance and secure a sustainable future for generations to come.
The writer has a doctorate in energy economics and serves as a research fellow in the Sustainable Development Policy Institute (SDPI). Twitter/X: @Khalidwaleed_ Email: khalidwaleed@sdpi.org
