Recent Context:
-COP 29 (the 29th Conference of the Parties) is an annual United Nations climate change conference that is scheduled to take place in 2024 in Azerbaijan.
-These conferences are held under the framework of the United Nations Framework Convention on Climate Change (UNFCCC).
-They bring together world leaders, government representatives, scientists, and activists to negotiate agreements aimed at addressing climate change and achieving the goals of the Paris Agreement, which seeks to limit global temperature rise to well below 2°C, with an ambition to limit it to 1.5°C.
-As countries are still struggling to come to an agreement over the quantum of finance that developed nations must mobilise in the coming years to fight climate change, Azerbaijan, the host of this year’s climate conference, has decided to launch a new fund to finance climate action in the developing world.
Major Highlights regarding the COP 29:
–New Fund to be Established:
The Climate Finance Action Fund (CFAF) would seek “voluntary” contributions from fossil-fuel producing countries and companies, with Azerbaijan, itself a petroleum economy, making the initial contribution. It is not clear how much money this new fund is hoping to raise.
-The CFAF is part of a large package of proposals that Azerbaijan has prepared for inclusion in the final outcome of COP29 (29th edition of the Conference of Parties to the UN Framework Convention on Climate Change), which is to be held in the country’s capital, Baku.
–Climate Finance:The main agenda of COP 29 is to finalise an agreement on climate finance, including the amount of money that developed countries must raise in the post-2025 period to help the developing world fight climate change.
About Climate finance:
-Climate finance refers to the funding provided to support actions aimed at addressing climate change, particularly by reducing greenhouse gas emissions (mitigation) and adapting to its impacts (adaptation).
-It encompasses local, national, or international financing, drawn from public, private, or alternative sources.
The primary goals of climate finance are:
1.Support mitigation efforts: This involves financing projects that reduce carbon emissions, such as renewable energy, energy efficiency, and sustainable transportation systems.
2.Promote adaptation initiatives: This includes funding for projects that help communities adapt to the effects of climate change, such as improved infrastructure, climate-resilient agriculture, and disaster risk management.
3.Assist vulnerable nations: Many developing countries are more vulnerable to climate change but lack the resources to adequately address its impacts. Climate finance helps ensure they can implement necessary measures.
Key institutions involved in climate finance include the Green Climate Fund (GCF), the Global Environment Facility (GEF), development banks, and various bilateral and multilateral agreements. Additionally, private sector investment plays a significant role, often through sustainable finance mechanisms like green bonds.
About UNFCCC
The United Nations Framework Convention on Climate Change (UNFCCC) is an international environmental treaty established at the Earth Summit in Rio de Janeiro in 1992. Its main goal is to stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous human interference with the climate system.
Key Aspects:
Objective: The UNFCCC’s ultimate objective is to prevent dangerous anthropogenic (human-induced) interference with the climate system. It aims to do so in a way that allows ecosystems to adapt naturally, ensures food production is not threatened, and enables sustainable economic development.
Parties: The UNFCCC has near-universal membership, with 197 Parties (countries or regional economic organizations). All members agree to take actions to combat climate change, though the treaty does not set binding limits on greenhouse gas emissions for individual nations.
Conference of the Parties (COP): This is the supreme decision-making body of the UNFCCC. The COP meets annually to assess progress in dealing with climate change and to negotiate new agreements or strengthen existing ones. Key agreements reached through COP include:
–Kyoto Protocol (1997): Set legally binding emissions reduction targets for developed countries.
–Paris Agreement (2015): A landmark accord that brought all nations together in a common cause to undertake ambitious efforts to combat climate change and adapt to its effects, with the goal of limiting global warming to below 2°C, preferably 1.5°C.
Challenges Regarding Climate Finance:
Climate finance refers to the financial resources mobilized to address climate change mitigation and adaptation, especially for developing countries. Despite its importance, there are several challenges that hinder its effectiveness:
1. Funding Gap:
–Insufficient Resources: The estimated global need for climate finance far exceeds the available funds. The $100 billion annual target set for developed nations to contribute to developing countries has not been fully met, creating a significant shortfall.
–Inconsistent Pledges: Some countries and institutions do not meet their commitments, leading to unstable or inadequate funding.
2. Lack of Private Sector Involvement:
–Limited Investment: Private finance has not been mobilized on a large scale, primarily due to perceived risks and uncertainty regarding the returns on green investments.
–Unclear Policy Frameworks: Unpredictable regulatory environments make private investors hesitant to commit capital to climate projects.
3. Access to Funding:
–Complex Processes: Many developing nations, particularly small and vulnerable countries, struggle to access climate finance due to complicated application procedures and eligibility criteria.
–Capacity Constraints: Many developing countries lack the institutional and technical capacity to manage and deploy climate finance effectively.
4. Accountability and Transparency:
–Tracking Difficulties: There is often insufficient tracking of how funds are used, making it difficult to assess the impact of the financing. This lack of transparency undermines confidence in climate finance mechanisms.
–Double Counting: Some countries count the same financial resources multiple times, inflating their contribution reports.
5. Disparity between Mitigation and Adaptation Funding
–Mitigation Focus: A large portion of climate finance is directed toward mitigation projects (e.g., renewable energy), while adaptation, which is crucial for vulnerable nations facing climate impacts, receives less funding.
–Imbalance in Regional Distribution: Least Developed Countries (LDCs) and Small Island Developing States (SIDS) receive less finance compared to emerging economies, despite being more vulnerable to climate change.
UPSC CSE PRELIMS PYQ 2016
Q. With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct? (2016)
- The Agreement was signed by all the member countries of the UN, and it will go into effect in 2017.
- The Agreement aims to limit the greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2ºC or even 1.5ºC above pre-industrial levels.
- Developed countries acknowledged their historical responsibility in global warming and committed to donate $ 1000 billion a year from 2020 to help developing countries to cope with climate change.
Select the correct answer using the code given below:
(a) 1 and 3 only
(b) 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
Ans: B