High-level talks on increasing funding for developing countries to green their economies and prepare for the impacts of global warming began Wednesday at the COP27 climate conference, with negotiators differing on the amount and providers of funding.
At the chaotic UN climate summit in Copenhagen in 2009, rich nations pledged $100 billion annually to the Global South by 2020 by 2020, but two years after that deadline, there’s still $17 billion missing, according to the OECD.
Even that number overestimates the generosity of rich nations when excluding loans and money not already allocated for other purposes from the count, say Oxfam and other NGOs tracking the problem.
The developed nations taking part in the Nov. 6-18 talks in the Red Sea resort of Sharm el-Sheikh now say the $100 billion target will be met by the end of 2023.
Discussions about how much to give after the current round of commitments ends in 2025 – and whether to expand the donor pool to other nations, notably China – have already begun.
But more than a dozen years after the original pledge, estimates of future cash flows required have increased many-fold, promising to complicate upcoming negotiations.
The climate finance talks started with three questions that needed “political guidance”: Should there be quantitative targets? Should the donor base be expanded? Should the financing also cover losses and damages that have already occurred?
“We must not repeat the shortcomings in delivering the $100 billion,” said Rosalinda Soipan Tuya, a Kenyan MP speaking on behalf of the African nations negotiating bloc.
The amount needed in the second half of this decade, she added, should “match needs” she estimates at more than $1.3 trillion a year globally by 2030.
Other developing country representatives focused not only on the amount but also on the conditions under which the funding would be made available.
“We need to make sure our debt doesn’t grow,” said a Maldives official who represents the AOSIS group of small island nations, some of which face the prospect of being wiped off the map by rising sea levels.
“Funding must be grant-based and easily accessible.”
– ‘Small sum’ –
A number of nations bemoaned the lack of direct grants compared to loans.
The representative of Pakistan insisted that the controversial category of loss and damage – essentially compensation for unavoidable climate impacts – should also be included.
“I come from the bottom of the climate crisis,” she said, referring to the massive floods in August that covered a third of her country and caused more than $30 billion in economic losses, according to the World Bank.
US special envoy for the climate, John Kerry, represented wealthy nations that, until recently, did not want casualties and damage to be included on the formal negotiating agenda of the UN talks.
“No government in the world has the money to do what we need to do to win this fight,” he said, noting total needs could reach $4 trillion.
“We need to think differently about how we mobilize finance,” he added, bemoaning the failure of developed countries to provide the “paltry sum” of $100 billion.
Developing country diplomats have criticized the persistent imbalance in climate finance, which the UN framework should split equally between reducing emissions (mitigation) and building resilience to future impacts (adaptation).
As climate-related disasters have multiplied over the past decade, nations in the Global South have called for a separate funding facility for losses and damages.
“We need a common definition of what exactly constitutes climate finance,” said IMF boss Kristalina Georgieva. “Measuring what needs are there and what their net worth is is paramount.”
