Home Daily Star Article Delivering climate finance is the key to COP26 success

Delivering climate finance is the key to COP26 success

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Rich countries have to buckle up and make their due contribution to tackle climate change. File Photo: Reuters

This week, United Nations Secretary-General Antonio Guterres held a high-level meeting on climate change in New York, where Bangladesh Prime Minister Sheikh Hasina was one of the leaders invited to add momentum to the actions needed to tackle climate change before the upcoming climate conference, COP26, hosted by the United Kingdom and scheduled to be held in Glasgow in November this year.

One of the most urgent issues is the delivery of USD 100 billion every year from the developed countries to support the developing countries to tackle climate change, which was promised to begin from 2020.

I will provide a history of this pledge, its lack of success so far, and what needs to be done now on an urgent basis for the developed countries to retain any semblance of credibility going into COP26 in November.

The annual fund of USD 100 billion to be provided by the rich countries to the poorer countries in climate support was first proposed by former US President Barack Obama, at the climate summit held in Copenhagen, Denmark back in 2009. However, as the Copenhagen meeting ended in failure to achieve an agreement, the idea was reintroduced in 2015, at COP21 in Paris, and was enshrined in the Paris Agreement.

The pledge by the developed countries was that they would provide USD 100 billion a year, from 2020 onwards, and the amount would be increased after five years.

An associated demand from the developing countries was for half of that amount to fund adaptation efforts in the most vulnerable developing countries, and the other half to support mitigation efforts.

The developed countries had a good five years to plan how to deliver this promised amount, but they did not prepare at all.

As a result, 2020 has come and gone with no concrete idea of how much climate finance has been provided, by who, and to whom. There is even no agreement on how much each of the countries (that have taken the pledge) is supposed to contribute to that USD 100 billion fund, and how it should be delivered, or who should track the payments.

The latest figures provided by the Organisation of Economic Co-operation and Development (OECD), which tracks Development Assistance, show that in 2019, the total amount of climate finance, as reported by the developed countries, was USD 79.6 billion only. Another aspect of this was that only 20 percent of the fund went into supporting adaptation efforts, while 80 percent went into mitigation works in the form of loans, rather than grants.

Not only is this amount well short of USD 100 billion, but even the amounts claimed to have been provided are highly suspect, as was demonstrated by Oxfam, who went through all the claimed amounts provided by the developed countries and found that only USD 20 billion would be counted as genuinely new funding to tackle climate change, while the rest was double counting of development assistance that was already being provided. Hence the majority of the climate finance was neither new, nor in addition to development assistance.

Now let’s come to 2020, for which we don’t have any updated figures available, although the developed countries themselves acknowledge that they did not reach the USD 100 billion target, and they are now scrambling to put together a USD 100 billion package before COP26. They should recall that by November 2021, they will owe USD 100 billion for 2020 and another USD 100 billion for 2021.

From the perspective of the developing countries, this has become an issue of credibility for the developed countries in any further discussion going forward.

The Climate Vulnerable Forum (CVF) countries, under the leadership of Prime Minister Sheikh Hasina of Bangladesh, have demanded that the developed countries present a plan for delivering USD 500 billion to cover five years—from 2020 to 2024. They also demanded that half of this amount be directed to support adaptation activities in the most vulnerable developing countries.

This is what the UN secretary-general is trying to get the developed countries to abide by.

An important aspect of this situation is that USD 100 billion per year is no longer an adequate amount to tackle the impacts of climate change, which will require trillions of dollars from now on. This will require all the countries to mainstream the tackling of climate change—both through mitigation and adaptation—into national development investments, particularly in light of the Covid-19 pandemic. This will mean that every country, both rich and poor, must mainstream their climate change investment into national development investments going forward. Bangladesh is a pioneer in taking this initiative by allocating nearly eight percent of the national budget, amounting to well over USD 2 billion, to tackle climate change, to 20 ministries as well as through civil society organisations. This is an example that many other countries will need to follow going forward.

Hence the totemic annual funding of USD 100 billion is not going to make a huge difference in practical terms, but is mostly a symbolic test for the developed countries to retain an iota of credibility as they come to Glasgow in November.

Let’s see if they can pass the test.

Originally this article was published on September 22, 2021 at Daily Star. The author Prof. Saleemul Huq is the director of the International Centre for Climate Change and Development (ICCCAD) at the Independent University, Bangladesh (IUB).
Email: saleemul.huq@icccad.org

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