In March, no less than 13 problem statements were put forward by the FWG for the GST to address to scale-up capital for climate action in developing countries and shift global and national reallocation of capital toward climate solutions. In September, the FWG outlined more on how and who; and in what forums action could be moved forward.

As the dust settles, the first GST political outcome and technical synthesis report can be viewed as a positive outcome for financing climate action. Because for the first time, a UNFCCC decision has delivered a more holistic understanding of financing climate action that includes – but also goes beyond - the much-needed provision of finance from developed to developing countries. In particular:

• It highlights the gap between needs and support provided , especially by developed country Parties as well as adaptation and the key role of public finance therein;

• It picked up on the need to smooth access to finance, including via the financial mechanism of the UNFCCC (that constitutes the Green Climate Fund, Adaptation Fund, Global Environment Facility and now the Loss and Damage fund);

• It speaks to the multilateral development banks (MDBs) and the need for their reforms to accelerate climate action;

• Outcomes also considered the role of government, central banks, commercial banks and institutional investors, as well as potential innovative sources of finance, including taxation, and the scaling down of harmful incentives;

• With regards to implementation, it was clear that highly-concessional and non-debt instruments have a role to play, noting that fiscal space and climate action are related, also pointing to other forums where sovereign debt is being addressed.

• Finally, the GST outcome is clear that given its ambition to make finance flows consistent with low-emission, climate-resilient development pathways, Article 2.1c is complementary and not a substitute to the provision and mobilisation of finance from developed countries. Instead, it necessitates policy guidance, incentives, regulations and enabling conditions for private actors to help reach the scale of investment for the global transition.

Coming back from Paris and two excellent days of the OECD Climate Change Expert Group forum, it is clear that the success of the GST does not lie in the content of the outcome, but the implementation of what is in it. Given the GST fell short of the concrete details on ‘how’, the problem statements of the FWG remain valid and more urgent than ever.

Four finance-related agendas should be harnessed to take the first GST outcomes forward:

1. The GST outcomes were clear that the New Collective Quantified Goal on climate finance (NCQG) to be agreed at COP29needs to support developing countries Nationally Determined Contributions (NDCs) and National Adaptation Plans, increasing ambition and accelerating action by mobilising finance from wide sources, instruments and channels. This successor to the $100bn is still all to play for, but should speak to a scaling up of climate finance in developing countries, while being true to the breadth of actors needed for financing disruptive transitions.
   
   
2. The GST is in part designed to increase national ambition via countries’ Nationally Determined Contributions (NDCs). With new NDCs to be submitted in 2024, the NCQG and wider international cooperation on the financing agenda - such as in the G20 sustainable finance discussions and on MDB reform -will impact the amount of ambition developing countries embed in their policies, actions and measures that constitute their NDCs.
   
   
3. While the NCQG will need to address the needs of developing countries, the GST outcomes were clear that there is more to be done in the real economy and financial system to keep 1.5 alive. Over 2024 and 2025 there will be four dialogues on Article 2.1c under the Sharm-el-Sheik dialogue. Finding a space to place these wider enablers and to hold developed countries to account for their enabling environments will be key.
   
   
4. Finally, international financial system reform, while mentioned in UNFCCC decisions, is a process that is not all about climate, nor is it interchangeable with Article 2.1c. Ensuring that climate action is mainstreamed in this discussion will be imperative if sovereign debt reform, international taxation and trade rules, for example, reflect the Paris Agreement collective goals.

Of course, these four agendas are related. In most cases, it is impossible to disentangle domestic markets and financial systems from their interaction with global economy via supply chains and the international financial system. Critically, we must use these avenues and the multilateral process to guide state and non-state actors alike towards a just transition. Halfway through this critical decade, success on the financing agenda is about global prosperity for all, not about international aid.