Rich, polluting nations still owe the developing world
There’s no denying it: rich countries, especially the United States and Western European countries, have emitted the lion’s share of the greenhouse gases that have led to the climate crisis. In fact, only 23 developed countries are responsible for half of all historical CO2 emissions. Yet it is developing countries that are hardest hit by the effects and least prepared to respond.
That’s why rich nations made a pledge at the 2009 UN climate summit, or COP15, in Copenhagen. Together, they agreed to mobilize $100 billion per year, officially starting in 2020, to help developing countries reduce emissions and adapt to the impacts of climate change.
Then they broke their promise.
Not only did they fail to meet the 2020 funding goal, but they also failed to clearly define what they would pay or how to measure success. Here’s what you need to know about this funding pledge and why, even with all its flaws, climate experts say it remains essential.
Why $100 billion?
As part of the 2009 Copenhagen climate accord, experts attempted to calculate what it would cost these 23 wealthy countries to fund climate change mitigation and adaptation in the developing world. Some have estimated the price to be as high as $400 billion a year. The agreed $100 billion was “more or less a compromise”, says NRDC climate strategist Brendan Guy, who was part of an NRDC team that led a discussion on transforming climate finance from commitment to project at the last climate conference in Glasgow, COP26. Yet it remains important largely because of the political promise it represents.
So how close are countries to meeting this annual target?
Starting in 2013, donor countries tried to increase their contributions each year, hoping to reach $100 billion by 2020. But by 2019, they had only mobilized around $80 billion. public and private climate finance, according to the Organization for Economic Co-operation and Development (OECD), an intergovernmental body made up of many donor countries. Although data is not yet available for 2020, some reports have predicted that donors will reduce their commitments due to the pandemic.
Even so, these totals paint an incomplete picture, in part because countries have yet to agree on how to split the pie so that all parties pay their fair share. A few organizations offered estimates, but the countries themselves did not agree with these percentages. There are also competing perspectives on what kind of funding counts towards the $100 billion a year goal. Some argue that this means the OECD totals are potentially inflated because, in addition to grants, they also include loans, which must be repaid with interest. A few countries that appear to have exceeded their funding share, such as Japan and France, provided the majority of the money in the form of loans. This is why Oxfam, an international non-profit organization focused on poverty reduction, estimates that total climate finance from 2017-2018 is only a third of OECD estimates, or between 19 and $22.5 billion.
What is the available money used for?
The money is supposed to fund both mitigation and adaptation in developing countries, which reduces emissions and helps residents cope with expected climate impacts. But even that gets murky, and not just because no organization tracks funded projects. The other problem is that countries define mitigation and adaptation differently. Yes, the money going towards the installation of solar panels or the erection of dykes seems clear. But what about building new roads, described by some countries as “climate-relevant”, or, as was included in Japan’s 2017 tally, funding “cleaner” coal-fired power plants? in Bangladesh? This is why Oxfam believes that real climate finance has been significantly overstated.
The balance between adaptation and mitigation is also difficult. Adaptation is notoriously harder to fund, especially from private sources, likely because such projects tend to benefit mostly local residents and do not generate significant profits. In 2019, for example, only 25% of climate finance went to adaptation.
Whether these projects ultimately succeed in achieving their goals is another data issue. Not only is success project-specific – ranging, for example, from emissions reductions to preventing climate gentrification – but outcome data remains difficult to collect and often lags years behind.
Did last year’s COP26 in Glasgow help overcome some of the current hurdles?
The unfulfilled promise of $100 billion certainly weighed heavily, and some countries took the opportunity to increase their commitments. For example, before Glasgow, President Joe Biden proposed $11.4 billion in annual climate funding in the United States by 2024, but that requires Congressional approval, which remains far from a certainty. It’s also only part of what’s actually owed: the United States has issued a quarter of all historical emissions, according to estimates by the World Resources Institute, and should pay up to 47% of that $100 billion. dollars per year.
At COP26, developing countries also demanded additional funds for “loss and damage” – the costs of climate impacts beyond what they could be adapted to – but no specific funding pledges. was made. (There has been some progress, thankfully, on increasing the share of adaptation finance.) Countries have also attempted to address some of the data dilemmas with new transparency and tracking requirements, but still they once failed to define uniform definitions of what counts as climate finance. At best, rich countries have suggested that the $100 billion target will likely be reached by 2023 and funding should increase from there.
How much do developing countries really need to adapt to the climate?
The $100 billion a year was always a starting point that would increase over time. And that’s a good thing because the United Nations’ Intergovernmental Panel on Climate Change (IPCC) estimates that developing countries will need $300 billion a year just to adapt by now. the end of the decade. IPCC estimates for the global economy to transition to clean energy at the rate required to keep warming below 1.5 degrees Celsius put the cost at $3.8 trillion per year by 2050. And this is still trillions less than the worst-case climate scenario.
So why is the $100 billion still so important?
NRDC’s Guy calls the $100 billion a pragmatic, political and ethical imperative. The whole world needs to move away from fossil fuels, and fast, if we are to keep warming below 1.5°C. But developing countries don’t always have the resources to do so, or it may force them to sacrifice the short-term economic gains that could be made by keeping older, polluting infrastructure in place. Money is a pragmatic necessity to cut emissions fast enough and protect people in the process.
Politically, falling short of the $100 billion goal represents a significant breach of global trust as climate action requires unwavering international cooperation.
More importantly, rich nations have an ethical responsibility to resolve the crisis they have caused. “There is a clear and compelling moral case for helping countries most at risk, such as small islands and countries that have contributed next to nothing to the problem in terms of emissions,” Guy says. Investing $100 billion a year is the bare minimum to repair such catastrophic harm.
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