On October 21 at midnight, tropical depression Kristine (Trami) entered the Philippine area of responsibility. What was first identified as a low-pressure area quickly grew into a severe tropical storm — battering much of the biggest island group in the country, Luzon.
Images of flooded communities filled social media, along with many pleas for aid. Many of the most affected areas lacked resources to rescue Filipinos trapped in their houses, as their hometown roads turned into brown rivers.
Take away the timestamps, and it’s easy to mistake these photos for those taken months or even years before. These scenes are not unique to the Philippines — they echo the devastation in climate-vulnerable countries worldwide, highlighting the financial toll of rebuilding after climate-induced disasters.
For nations like the Philippines, prone to repeated and worsening storms, enduring climate impacts without substantial external support becomes increasingly unsustainable. If these nations have any hope to withstand the worsening effects of global warming, they will need trillions of dollars in funding.
Securing the finances that vulnerable countries need will be a key focus at the 29th Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) in Baku, Azerbaijan, this November. Countries are expected to establish a new, more ambitious financial target under the New Collective Quantified Goal (NCQG), but deep divisions remain over its scale, sources, and allocation.
How much for a new climate finance goal?
Last June 2024, world leaders, civil society organizations, climate experts, and business lobbyists gathered in Germany for pre-COP29 technical discussions, which set the stage for COP29 discussions on the NCQG.
The NCQG is set to replace the former goal of providing $100 billion per year to developing countries by their developed counterparts. However, the specifics of NCQG are still being debated. Developed and developing countries clash on almost every aspect of the new target. The biggest point of contention was about the amount of money to be collected.
For climate-vulnerable countries, the NCQG should reflect what developing countries need in terms of funding their respective climate action efforts. This would take about USD 2.4 trillion annually, according to the Independent High-Level Expert Group on Climate Finance.
This is not unrealistic, given the amount of money lost on damages incurred during climate disasters. One study published by the journal Nature Communications estimates the global cost of climate change to be at USD 16 million per hour. That amount is projected to multiply as climate change impacts worsen.
However, developed countries have been reluctant to commit to specific amounts, favoring instead to decide on the components of the NCQG before addressing the total target. The United States even suggested a "floor of USD 100 billion," an amount developing nations argued is outdated and insufficient given current needs.
As the clock ticks down to COP29, the question remains: will wealthy nations support a financial target that truly reflects the scale of climate challenges?
Who’s paying?
Another point of contention for the NCGQ is determining who’s going to pay up. Developed countries advocate for a target that encourages the private sector to invest, as well as for multilateral development banks to reform existing financial mechanisms.
Developing countries, on the other hand, emphasize the historical responsibility of developed nations. They argue that these nations, having industrialized first and accumulated wealth through carbon-intensive activities, should take the lead in providing financial support.
This issue becomes more complex with the rise of emerging economies like China and India, which, while not historically responsible and excluded from UNFCCC Annex I countries, have significantly increased their emissions. There is a growing call for these countries to contribute to the NCQG to reflect their expanding carbon footprints. However, this raises concerns about diluting the historical responsibilities of developed nations and could hinder progress in securing adequate climate finance.
What’s the money for?
A significant unresolved issue is the inclusion of loss and damage within the NCQG, on top of adaptation and mitigation. Developing nations emphasize that current funding for loss and damage is insufficient, urging a dedicated allocation within the NCQG. However, developed countries resist, arguing that loss and damage fall outside the NCQG’s scope. This unresolved debate will continue at COP29, and without a clear decision on loss and damage, the likelihood of establishing a comprehensive NCQG that addresses all aspects of climate finance remains uncertain.
It's crucial to recognize that finance tailored to the unique needs of vulnerable countries is just as important as the overall amount.
An effective NCQG, as envisioned by a coalition of finance ministers from climate-vulnerable countries, should prioritize concessional, long-term financing, integrate climate and debt considerations, and ensure rapid, affordable access to climate finance. By incorporating these elements, the NCQG has the potential to become a powerful tool in supporting developing countries on the front lines of climate change.
What’s next?
It’s been just four months since the Bonn Climate Talks and now COP29 is just around the corner. In that period, much has happened in terms of extreme weather — costing countries not just money but also lives.
With any kind of money talk, contentions are bound to arise. By its sheer magnitude, climate change’s scale of discussion eclipses any that came before it. Disputes on its specificities are expected, especially from developed countries obligated to shell out billions. But the real cost of their indecision comes not from their budgets but at the expense of developing countries. As rich nations grapple with their responsibility, poorer areas buckle under the weight of global warming they had but a small part in.
Images of devastation so commonplace now will soon cease to be photos to a few, but a reality for all. This is unless policymakers at COP29 make the brave step of being decisive about climate finance, and pledge to invest the world’s fiscal resources in saving it.