How to achieve the 2030 climate goals? Up to $6.8 trillion is needed

On September 10 this year. The United Nations Framework Convention on Climate Change (UNFCCC) released a second, updated version of its report assessing the needs of developing countries for the provisions of the Paris Agreement. It turns out that the achievement of the envisaged 2030 climate targets could be as much as $1 trillion. more expensive than estimated three years ago. Which needs are the most urgent?

Institutional context of the report

Recall that the convention was signed by 154 countries at the Rio climate summit, and its main goal is to stabilize the level of greenhouse gases in the atmosphere. As of 2016. UNFCCC’s efforts are aimed at achieving the climate goals adopted under the Paris Agreement. Following the 2018 COP24 summit in Katowice, Poland, work began on a report estimating the financing needs (through 2030) of developing countries.

The first report was released in 2021. and included reports provided by 78 countries. At the time, the total needs for the implementation of the Voluntary Commitments to Reduce Emissions (NDCs) were estimated at $5.8-5.9 trillion. The new report, from 2024, already includes cost estimates from 98 countries and amounts to $5.0-6.8 trillion. This means that meeting the climate goals set in Paris will require spending of $455-584 billion per year. It is worth noting that this is not the total amount, as only 2753 of the 5760 needs reported under the NDC have been quantified.

Let’s add that the aforementioned totals apply only to data submitted in fulfillment of emission reduction commitments. Other types of reports include, among others. National Climate Change Adaptation Plans (NAPs) or Biennial Update Reports (BURs) – the latter of which reported needs of $30-31.78 trillion.

How will the climate goals be financed?

Of the total needs reported as part of emission reduction commitments, 48 percent. were identified as conditional needs, i.e., subject to certain circumstances; 18 percent. were identified as unconditional needs, and the remainder were not given status.

Individual countries also reported anticipated sources of funding for the actions needed to meet climate goals. In 44 percent. reports indicated both domestic and international, public and private resources, and in 8 percent. assistance is expected primarily from outside sources. In 47 percent. reports did not specify funding sources.

Sectoral needs analysis

Achieving the ambitious Paris intentions requires a range of different initiatives – climate change adaptation and mitigation measures are identified as the most necessary. Their scope varies by economic sector. Adaptation measures are needed in the agri-food sector, forestry, water management, health care and emergency management. Their implementation is also linked to the need to protect ecosystems, biodiversity and coastal zones. Quite a few of the proposed measures are cross-cutting and address different sectors.

Mitigation measures, on the other hand, are key primarily in the energy sector. Additionally, the need for them has been identified in transportation, forestry and activities seeking to conserve biodiversity, as well as waste management and agriculture. Other types of activities reported by developing countries in their reporting to the UNFCCC include preventing, minimizing and managing losses and damages associated with climate change. Their nature in most cases is cross-sectoral.

When it comes strictly to the emission reduction programs adopted by individual countries, 79 percent. of the quantified needs refer to mitigation actions, and 16 percent. to adaptation measures. Prevention and minimization of losses in this case refers mainly to transportation and energy, i.e. high-carbon industries.

Geographic differentiation

The report’s authors note that there are considerable discrepancies in the needs for meeting climate goals in different regions of the world. They point out, however, that their cause may be a lack of adequate data and the tools and capacity to collect it. In other words, reporting lower financial needs may be evidence of administrative and reporting difficulties, rather than the actual state of affairs.

The data obtained shows that the greatest number of needs have been registered so far in Africa, with 53 countries from the continent reporting 2981 needs, 47 percent of which. are focused on climate change adaptation, and 46 percent. on mitigation activities. Only 1,692 of these have lived to see financial estimates, totaling $1.6-1.9 trillion. The report also indicated that the most funds would be needed in Egypt, Ethiopia and Nigeria.

In Asia, 38 countries reported a total of 1,046 needs, most of which (55 percent) are related to mitigation efforts. Only 374 of them were estimated financially, with a total budget of $3.3-4.9 trillion. The most costly needs were registered in the south, primarily in India, Indonesia, Iran and Pakistan. It is worth mentioning that India is responsible for 3.37 percent. of global emissions.

Only 6 European countries have sent reports on the planned implementation of climate goals. Of these, Moldova submitted the highest budget, where $5 billion will be needed for mitigation measures and $4 billion for adaptation. This reflects the country’s ambitious plan to reduce greenhouse gas emissions by 70 percent by 2030. (relative to 1990).

The UNFCCC report also included reports from 29 countries in Latin America and the Caribbean, covering 958 needs, fairly evenly distributed between adaptation and mitigation, and 334 of them estimated at a total of $90 billion. Among the countries requiring the most investment were Cuba, the Dominican Republic, Haiti and Panama. In Oceania, 14 countries reported 514 needs, and implementing 258 of them is expected to cost $8 billion. The largest needs were reported in Melanesia.

Not just money

In order to achieve their climate goals, developing countries primarily need funds, but not only. Many of the reports also mentioned the need for technology development and transfer, as well as enhancing competencies.

The very implementation of adaptation and mitigation measures, according to representatives of developing countries gathered at the UNFCCC, is to be done with respect for social priorities. Ghana, Uruguay and Thailand have pledged to fight gender inequality, and many other countries, such as the United Nations. Sudan, have promised to focus on the rights and interests of local communities and indigenous peoples. The reports also repeatedly highlighted the co-benefits of climate goals, pointing to renewable energy as a step toward improving air quality and increasing energy security. Along the same lines, adaptation measures in agriculture and water management serve to achieve the various Sustainable Development Goals.

The UNCFFF report is considered an important step toward setting a New Common Financial Goal (NCQG), which will be one of the priorities at the COP29 climate summit in Baku in November.