Race to Close Global Climate Finance Gaps Amid Escalating Climate Risks

• by Joyce Chimbi (kenya)
• Thursday, October 17, 2024
• Inter Press Service

In November 2024, the annual meetings of the World Bank and IMF, along with COP29, present critical opportunities to boost climate finance, set a new global goal for its delivery, and build momentum for the necessary commitments. Against this backdrop, the Brookings Institution's Global Economy and Development program hosted Simon Stiell on October 17, 2024 for a virtual event to discuss how to meet the global climate finance challenge. 

"Let's start by asking: Where are we now on climate finance? In the past decade, we've seen some real progress. Over a trillion dollars was invested in climate action last year globally. Up from a few hundred billion a decade ago.  According to the OECD, in 2022 developed countries provided and mobilized more than USD 100 billion in climate finance to developing countries," Stiell, the executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC), explained.

"We got this far because first-movers and smart governments—who had the means—seized their chance. They saw the opportunity and grabbed it. But relative to where we need to be, this is nowhere near enough.  This year we've seen hundreds of billions of dollars of damage to countries rich and poor."

Stiell was speaking alongside Vice President for Global Economy and Development Brahima Coulibaly, Senior Fellow Amar Bhattacharya and non resident Senior Fellow Vera Songwe at Brookings Institution in a high-level conversation to discuss the challenges of addressing global climate risks and the current opportunities to substantially increase climate finance across the developing world.

Coulibaly stated that in the coming years, rising global temperatures will lead to more full-point and severe weather events, the degradation of the world's oceans and other ecosystems, and instability in access to food and drinking water, among others. Emphasizing that climate action is "an aggregate global public good, for the reduction of greenhouse gas emissions achieved by mitigation in one country, does not impede on the amounts affecting any other country, and it is the emissions everywhere that determine the global emissions."

Bhattacharya spoke about the global stock take—a measure of progress towards the Paris Agreement—showing that the world is falling behind due to underinvesting in the low-carbon economy, climate resilience, and natural capital. And that this is especially so for emerging markets and developing countries.

Adding that in the last four to five years for instance, less than 5 percent of the increment in clean energy investment has been in emerging markets and developing countries other than China.  Overall, "90 percent of the world's nature and biodiversity assets are in the developing world; 80 percent of the spending is in the rich world," he said.

Songwe spoke about the intrinsic link between growth and climate and the need for a climate transformation that creates opportunities and opens up new sectors, cautioning that growing brown can only lead to a disaster.

Disaster is already unfolding as Stiell's own home island of Carriacou took a direct hit from Hurricane Beryl only a few months ago. As supply chains become obstructed and broken, inflation has severely affected even those who have avoided direct damages. Stressing that international climate finance must grow up, step up, and scale up to meet this moment.

"We simply can't afford a world of clean energy haves and have-nots. In a two-speed global transition, pretty soon everyone loses.  We can only prevent the climate crisis from decimating all economies—including the largest—if every nation has the means to slash greenhouse gas pollution and boost climate resilience. So, we know trillions more are needed," he emphasized.

He said that Multilateral Development Banks will be at the heart of this transition and that this week, the World Bank announced more concessional lending for climate and the IMF is looking at ways to incorporate climate action and risks right across their work.

"So many countries are facing debt crises that amount to fiscal straightjackets, making it near impossible to invest in climate action. At the annuals, we must see further signals that the World Bank and IMF are committed to ensuring developing countries have funds and fiscal space for climate action and investment, not devastating debts and sky-high costs of capital," he expounded.

Adding that while debt relief and introducing "more climate-related debt clauses are a start. So is replenishing the World Bank's International Development Association. And it's not just up to development banks. The G20 countries are their largest shareholders and must fund them properly and demand more, including wider reforms to the international financial architecture, while also working to find new and innovative sources of finance."

Less than four weeks to COP29, Stiell said that public finance must be at the core of the new finance goal.  That as much of this finance as possible needs to be in the form of grants or concessions and must be made more accessible to those who need it most. And the urgent need to make climate cash count, and wherever possible, leveraging more private finance and sending signals to financial markets that green is where the gains are.

He noted that the vital business of who pays and how much can be agreed in Baku, "but we are not going there to renegotiate the Paris Agreement.  It's also important we put in place mechanisms to track and ensure that promised funds are delivered.  More work also has to be done to rapidly ramp up funding for adaptation and get international carbon markets working for everyone.  We must fund a new generation of national climate plans."

He further spoke about the pressing need to protect the progress we made at COP28 and convert the pledges in the UAE Consensus—to triple renewable energy, double energy efficiency, boost adaptation and transition away from fossil fuels—into real-world, real-economy results.  And we must get the Loss and Damage Fund working fully, dispersing money to those who need it most.

"This is a moment of profound fracture between nations and within them. In times like these, there is a temptation to turn inward. If we go down this path, it will soon be game-over in the world's climate fight.  So let's instead choose the game-changer path ahead—the one that recognizes that bigger and better climate finance is entirely in every nation's interests and can deliver results everywhere," Stiell emphasized.

"Let's choose the path that focuses on solutions, ensuring the massive benefits of bolder climate action—stronger growth, more jobs, better health, secure and affordable clean energy—are within all nations' reach. That is the only pathway to every nation surviving and thriving."

IPS UN Bureau Report

Reports on COP29 written by IPS' climate justice fellows is supported by the Open Society Foundations.

© Inter Press Service (2024) — All Rights ReservedOriginal source: Inter Press Service

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