SINGAPORE – Singapore is not obliged to contribute resources to developing countries to help them take climate action, but will do so voluntarily, Minister for Sustainable Development and Environment Grace Fu said.

In an interview before the next United Nations climate conference COP29, which announces itself as a “financial COP”, Ms. Fu declared that the Republic respected the provisions of the Paris Agreement in terms of financing developing countries.

The multilateral treaty clearly states that developed countries have an obligation to contribute to the climate finance fund, she said.

But because Singapore is classified as a developing country in international negotiations, the Paris Agreement does not oblige it to provide financial resources to least developed and developing countries.

Parties like Singapore are encouraged to voluntarily contribute to global climate finance, which they do in several ways, Ms Fu said.

She highlighted a blended finance initiative launched by Singapore in 2023 to raise up to US$5 billion (S$6.6 billion) to fill the financing gap for green projects in Asia, such as early phase-out coal-fired power plants and electricity modernization. network infrastructure.

Blended financing refers to the use of public and philanthropic financing to facilitate the uptake of private financing. The platform, Financing Asia’s Transition Partnership, involves, among others, the Monetary Authority of Singapore, multilateral development banks and philanthropic organizations.

With less than a fortnight before the start of the annual UN climate summit on November 11 in Azerbaijan, Ms Fu outlined Singapore’s position on a major global climate finance target to be negotiated at COP29.

Called the New Collective Quantified Target (NCQG) on climate finance, this target succeeds the previous target agreed in 2009, in which developed countries committed to channeling $100 billion per year to developing countries by 2020 The goal was only reached in 2022, two years after the deadline.

The amount of the NCQG is to be set from a floor of $100 billion per year, based on the 2009 agreement.

According to a report by the Organization for Economic Cooperation and Development, 69% of public financing in developed countries in 2022 took the form of loans.

Many developing countries are heavily indebted, Ms. Fu said, adding: “The needs of developing countries are actually very great, and many of them have difficulty accessing capital markets, loan markets, because of their status, the risk they run. profile.”

At COP29, the quantum of the NCQG will be the key political issue on the negotiating table. The UN has estimated that developing countries currently need around $500 billion in climate finance per year. Estimates from other groups such as the World Resources Institute are upwards of $1 trillion a year.

Fu noted that public finances, or funds from government budgets and multilateral development banks, will not be enough to fulfill the NCQG. This means finding new ways to unlock finance and involve the private sector.

Through negotiations, Ms Fu hopes to see a clearer definition of the NCQG with an appropriate structure fleshed out.

“When the structure and definition are clearer, I think more contributors will come forward. And the quantum can be more meaningful,” added Ms Fu, who is also the minister in charge of trade relations.

According to her, a figure above $100 billion could come from developed countries – as outlined in the Paris agreement – while voluntary support from other parties and other sources of climate finance could help raise this amount to hundreds of billions, or even a trillion.