Climate finance lags way behind rich world commitments
As the United States mounts pressure on developing nations, including India, to commit to net zero emissions by 2050, President Joe Biden and other developed world nations need to remember and fulfil their part of the deal as well – providing adequate financial assistance to the developing world in helping it deal with climate change and achieve lower carbon emissions.
During the Ice Age, elephants roamed freely around northern Europe. They became extinct several thousand years back. Since then, especially during the Roman and British Empires, elephants were imported or gifted from other regions like Asia and Africa. In 21st century right in Glasgow there will be one such elephant in the conference room. That giant risks the outcomes of COP26 dwarf the hyped expectations on United Nations Climate Change conference.
Humanity is presently in the midst of ‘new normal’. Many call it extreme normal. The fact of a nano-metre sized coronavirus paralysing the entire human society, that claims to be not only the smartest of all living beings but also boasts of artificial intelligence, is nothing but a story from science fiction.
And the concurrent devastating consequences that include loss of life and property due to upending of climate is even ‘new erratic’. Shouts for help and actions from small island countries surrounded by existential threats, are getting drowned out in the curtain-calls and applauses after the speeches by powerful world-leaders at 76th United Nations General Assembly in New York. Power-games of newly regrouped and realigned countries are spilling the beans of narrow hidden intentions of new nationalism of super powers.
As the speeches in UNGA continue, concurrently severe floods due to heavy rains in the number of countries including Thailand, Indonesia, India, Sudan and China continue. The devastating wild-fires that started at the beginning of the year or even earlier are still ravaging in the forests of California, Brazil, Morocco, France, Greece and Spain. Droughts due to water scarcity, severe hurricanes and cyclones due to unprecedented merging of two or more weather systems, melting of glaciers at a never-before pace and ever rising breaking-off of massive ice-shelf in Arctic and Antarctic are all, individually and collectively, loud and clear signals of an all-pervasive and all-permeating climate emergency impacting the entire globe, leaving no corner of the Earth untouched.
Unfortunately, despite these alarms, and many more in the recent past, the response from the podiums of UNGA in New York has been stereotypical as if there are no lessons to be learnt from Covid-19 and all extreme events are like ‘new normal’. Speeches inundated with lofty promises to enhance the emission reduction ambition by world leaders are entirely contrary to the ground realities, just as it has been for the past three decades.
And yet the only news coming from New York was about more such promises. There were rumours flying around with some wondering if alliances like Quad countries-USA, India , Australia and Japan would even make more ambitious announcements on emission reductions of Green House Gases ( GHGs) over and above what they had already announced. Over the last year or so, there has been a flood of reports pointing at the climate catastrophe that is almost upon us, notably by the Intergovernmental Panel on Climate Change ( IPCC). However, despite these clear red lines, unfortunately drought of political-will persists. Those who protests against inaction are themselves not ready to bend the emission-curves as exemplified in France when President Macron decided to impose carbon-tax.
Apart from nationalistic constrictions and political compulsions there is one prominent reason that comes out as needed to be immediately attended to, without which world is destined to fall from so-called towering development that part of the world claims.
What is it?
Let us look back when year 2021 year started. United States President Joe Biden kept his campaign promise to get the US back into Paris Climate Agreement, the largest collective international effort ever to curb global warming , by signing an executive order on January 20, 2021, the day he was sworn in as the President of USA.
John Kerry, also known as Climate Czar, due to his role in ‘success’ of Paris Climate Agreement was appointed by Biden as his climate envoy. Interestingly, he also heads the National Security Council of USA. Indeed, climate change is considered as threat to national security not only by USA but by many other countries as well. Economist now put forward the possible links of monstrous climate change to terrorism, illegal migration and even Covid-19.
Over last nine months, the USA has been driving with an unprecedented fury and frenzy of demands for enhanced ambitions related to cutting down carbon emissions by half in this decade and achieving ‘net zero’ by 2050. John Kerry is being dispatched, to prepare for Biden’s various summits with world leaders and to extract more ambitious cuts in emissions to achieve carbon neutrality. He has already done rounds in India, China, Russia, Japan, UK, Middle East and Bangladesh, to name just a few.
Climate finance: No money on the table
But at no point during his talks, did he assure the developing countries of fulfilling the promise that USA gave in 2009 in COP-15 in Copenhagen. Promise of providing climate finance to the developing countries by developed countries.
Let us get it straight. There are three seminal principles that are followed in negotiating and implementing Multilateral Environmental Agreements. One, early action as precaution. Second , Common but Differentiated Responsibilities as per Respective Capabilities. And third, polluter to pay to help developing countries as part of moral responsibility which now called as part of climate justice under climate agreement.
In case of climate change, the first principle has been grossly diluted due to inaction and inadequate political will to step up the mitigation of emissions by the developed countries under Kyoto Protocol. The second principle was nearly drowned in Paris Climate Agreement when both developed and developing countries were needed to give the commitments at the same time, though the developed countries are historically responsible for carbon emissions. That was considered as Kerry’s success. And the third, climate finance is the elephant in COP26 conference room in Glasgow that the global leaders need to not only see but handle.
These three principles are not quixotic elements for international negotiations. They are tested by the world. The Montreal Protocol, which is another universally ratified multilateral treaty aimed at protecting the Ozone Layer has been singularly successful because of orderly agreement and implementation of these principles over the last three and half decades.
Strangely, Kerry while extracting ambitious promises of emission cuts during his rounds in the developing countries does not talk about meeting the finance commitments given by President Obama in Copenhagen in 2009. He talks only about initiating the ‘finance dialogue’ with developing countries. India has been regularly reminding the developed countries and particularly Kerry on this commitment. PM Modi has, contrary to the USA’s expectations, not announced carbon neutrality during his USA visit.
A study by the Stockholm Environment Institute in December 2020, recalled that climate finance, as part of ‘polluter to pay’ principle was enshrined way back when United Nations Framework Convention on Climate Change (UNFCCC) signed in 1992 at the Earth summit. UNFCCC has now been universally ratified. Since then climate finance has been on agenda of every climate conference, starting from COP-1
The commitments in COP15 held in Copenhagen in 2009 included financial support to developing countries for new technologies and technical assistance starting with a more modest USD 10 billion per year rising to USD 100 billion per year from 2020 and then rising further up to 2025, though the level of rise was not decided. Had the developed countries fulfilled the finance commitment of the Copenhagen COP15 by 2021 the cumulative additional and new climate finance would cumulatively, as per simple calculations, run into USD 700 billion. The funding has so far fallen far short of this figure and there is little sign of any serious uptick, despite Biden’s recent promise to take US contribution to USD 11 billion by 2024.
It is also not clear how much more financing is needed for those developing countries that have committed to additional emission cuts last year. It is also not yet known how much more climate finance is needed for achieving 50 pc cut in carbon emissions by 2030, leave alone the finance needed for net zero emissions by 2050.
Not only have the rich countries failed to live up to their commitment, but they have also been resorting to financial trickery to get out of their committed financial assistance. Though it was clear that climate finance committed to be provided to developing countries as per COP 16 in Cancun would be strictly ‘new’ and ‘additional’ funds, over the past few years, the developed world has resorted to messy interpretations and diverse suggestions clearly to dilute the commitment by arguing that bilateral and multilateral aid from development banks for climate related projects, for example bilateral development aid for building hydraulic dams, and private business investments like renewable energy technology agreements between private business, loans from multilateral institutions like the World Bank for clean energy and concessional finance for example from regional banks and foundations for electrical vehicles, should also be counted as part of climate finance support to developing countries under the Paris Climate Agreement.
Short changing low income nations
There is yet another fund for ‘adaptation’ (AF) established two decades back . It was especially for developing countries that are particularly vulnerable to the adverse impacts of climate change so that they can be protected. Once again, there are several misleading statements, intentional or otherwise, with rich world asking if AF is part of the promise of USD 100 billion per year from 2020. And the negotiations on finance have got further entangled due to financial support required for developing countries from ‘ Loss and Damage’ for example due to loss of revenue/profits when fossil fuel producing developing countries lose the markets.
As per reports from Oxfam and OECD as well as Independent Expert group, even after counting all the sources of climate finance, annual support to developing countries fluctuates widely from year to year and on average is around USD 20 billion per year till 2020 which is far from USD 100 billion.
If only ‘new and additional’ funding by Green Climate Fund ( GCF) which started its operation in 2011 is considered, total cumulative new and additional funding committed by the developed countries till now is only USD 10 billion and actual project allotment even lower, meaning USD 1 billion per year from 2011. Cumulative funds for climate projects under Global Environment Fund which is established in 2010 is meagre USD 7 Billion along with about USD 60 billion in co-financing from other governments or private sector, making annual figure of around just about USD 4 billion. Total of GCF and GEF-Climate as new and additional funding thus comes to about USD 5 billion per year against USD 10 billion in 2010 rising to USD 100 billion per year in 2020.
Has the elephant come back to northern Europe and that too straight in the conference room of COP26 in Glasgow? Experts say, there is another elephant – excuse by the developed countries of economic slowdown due to Covid-19 for not meeting the commitment.
(Rajendra Shende is an IIT Bombay alumni, a former director of UNEP and currently chairman of Terre Policy Centre and advisor to Media India Group. The views expressed here are the author’s own and do not necessarily reflect those of Media India Group.)