Some Wealthy Countries Say Trillions Needed to Fight Climate Change, Rich Nations Must Lead

A group of developed countries, including Germany and France, and the European Commission, on Wednesday acknowledged that trillions of dollars were urgently needed to address climate change and wealthy nations should continue to lead in providing climate finance.

The statement comes as countries spar over a draft for a new climate finance package -- New Collective Quantified Goal (NCQG) -- that is expected to be finalised at the ongoing UN climate talks in Baku, Azerbaijan.

Harjeet Singh, a climate activist and global engagement director for the Fossil Fuel Non-Proliferation Treaty Initiative, said that while the statement aligned with developing nations and civil society's demands, it fell short of what was truly needed.

According to the High Ambition Coalition, a group of developed and developing countries advocating for bold climate actions, "As we negotiate this new goal for climate finance, we must again overcome our differences, strengthen our commitment to global solidarity, and find the money to meet the planet's growing needs."

The coalition, including Spain, the Netherlands, Canada, Germany, France, Kenya, Colombia, and the European Commission, emphasised that "trillions of dollars" were urgently needed.

It added that climate finance should be primarily grant-based and concessional, particularly for adaptation and to address loss and damage.

The right conditions must be in place for green investments to thrive, it said.

"Developed countries must continue to take the lead and live up to existing finance commitments and innovative forms of finance be made a reality," the coalition added, calling for simplified and faster processes to approve and disburse climate funds.

It urged all countries to sustain and build on progress made at COP28 in establishing the Fund for Responding to Loss and Damage so it could start addressing the urgent needs of affected countries and communities.

Responding to the coalition's statement, Linda Kalcher, executive director of Strategic Perspectives, said EU leaders had made their stance clear.

"This leaves no doubt that it's a political priority for them to achieve a successful outcome on climate finance and join forces with its traditional allies in the Global South. Now that impetus needs to translate into a less defensive negotiating position immediately," she said.

Climate activist Singh said developing countries needed a commitment of at least USD 1 trillion in grants, not loans, to genuinely support vulnerable countries in adapting to climate impacts, recovering from losses and damages, and implementing robust mitigation strategies.

"This is not an investment -- it's an obligation. Developed nations must uphold their historical responsibility and meet these real needs on the ground. Anything less, and we are failing those who suffer climate impacts through no fault of their own," he added.

Meanwhile, negotiations over the NCQG remain tense.

After a full day was lost due to an agenda dispute on Monday, discussions on the NCQG -- the core issue at this year's talks -- hit a wall on Tuesday, with the G77 and China rejecting the draft framework of the negotiating text.

Developing nations have been pushing for a robust climate finance package that is publicly funded, grant-based, concessional, supports their needs and priorities and covers mitigation, adaptation, and loss and damage from climate impacts.

Estimates indicate that developing and poorer countries will require trillions of dollars in the coming years to adapt to and combat climate change.

Among Global South negotiators, the Like-Minded Developing Countries (LMDC) group has suggested that USD 1 trillion per year is needed, the Arab Group has called for USD 1.1 trillion, the African Group USD 1.3 trillion, India USD 1 trillion, and Pakistan USD 2 trillion.

In contrast, developed nations want the NCQG to be a broad, global investment goal that includes funding from multiple sources, including governments, private companies, and investors.

They argue that the global economic landscape has changed significantly since the adoption of the UNFCCC in 1992, and that countries that have become wealthier since then, such as China and some Gulf states, should also contribute to the new climate finance goal.

With only 10 days left to reach an agreement amid challenges such as President-elect Donald Trump's threat to withdraw the US from the Paris Agreement, two ongoing wars, and high inflation, observers say securing a comprehensive finance deal is proving to be a daunting task.