The G7 countries need to step up on climate finance
One of the positive outcomes of the Paris Agreement on Climate Change back in 2015 was a pledge from the rich countries to provide USD 100 billion a year, starting from 2020, to help the poorer countries tackle climate change through both mitigation and adaptation actions.
However, the year 2020 has come and gone, but this pledge was not delivered. It is difficult to even know how much was actually delivered, but the estimate is that perhaps USD 70 to 80 billion might have been delivered in 2020. Delivering the deficit for 2020 as well as another USD 100 billion for 2021 will be the test for the developed countries at the upcoming COP26 to be held in Glasgow, Scotland in November, hosted by the United Kingdom.
However, it is important to note that it will be too late if we wait until November to deliver, and also that the decision makers are not the Environment Ministers who go the COPs, but rather their respective Finance Ministers and even their Prime Ministers and Presidents.
On April 22, US President Biden hosted a leaders’ Climate Summit where 40 heads of government from all over the world met virtually, and the wealthy countries again pledged to provide the funds they had promised.
The leaders from the vulnerable developing countries, including Prime Minister Sheikh Hasina of Bangladesh who spoke on behalf of the Climate Vulnerable Forum (CVF), as well as Bhutan, which spoke for the Least Developed Countries (LDC), emphasised the need to fulfil the pledges for providing the climate finance which had been promised but not delivered.
As the leaders of the G7 countries will be meeting soon in June, hosted by the United Kingdom, and as the UK will be the host of COP26 and has promised to lobby the developed countries (including the G7 and the bigger group of G20) later in the year to deliver on their pledges, I would like to discuss some tests these countries will have to pass to show their commitment to meeting their climate finance promises.
The first test is to provide transparent information on how much each country is providing developing countries with to tackle climate change, and through which channels. Only the funds provided through the Green Climate Fund (GCF), Adaptation Fund (AF) and Global Environment Facility (GEF) are unequivocally for tackling climate change. However, many developed countries also count their contributions to multilateral banks like the World Bank, as well as through the United Nations, and even their own bilateral development funding agencies. This money is very often double counted as both development and climate finance, which goes against the spirit of providing new and additional finance to tackle climate change.
The second test is for each of the G7 as well as G20 countries, which is to allocate 50 percent of their climate change funds to support adaptation actions in the most vulnerable developing countries. This has been a major demand from the vulnerable developing countries for a long time, but in practice, only 20 percent of climate finance provided has gone to support adaptation. This is now an essential test for each developed country—to allocate half of their climate finance towards adaptation in the most vulnerable developing countries.
The third test, which is associated with the second test, is that they must ensure that (and report on how much of) their adaptation funds are actually reaching the most vulnerable communities in the vulnerable developing countries. The track record of providing this information is absolutely abysmal—so far, only 10 percent of the money provided for adaptation could be tracked to the most vulnerable communities. One could argue that the reason the people of the rich countries are providing the finance in the first place is to help the poorest and most vulnerable communities in the poorest and most vulnerable countries, so it would seem prudent to monitor and report on whether or not that is being achieved.
The fourth and final test with regard to climate finance is to support the victims of climate change who are now suffering from loss and damage that is scientifically attributable to the fact that global temperature has risen over one degree Centigrade due to emissions of greenhouse gases over the last few decades. Human induced climate change impacts are now a reality and people are losing their lives, homes, livelihoods and crops all over the world, but mostly in the poorer developing countries. These victims of climate change impacts are amongst the least responsible for causing climate change, so those who are responsible must accept that responsibility and provide financial support.
This particular issue of finance for loss and damage from climate change has been a very politically contentious one, as the developed countries do not like to accept any sense of liability or claims of compensation and have refused to provide finance for loss and damage, with the notable exception of supporting some insurance schemes.
However, although COP26 was postponed from November 2020 to November 2021, climate change did not take the year off and in fact, made a major jump forwards in terms of more severe wildfires, floods, cyclones, hurricanes, typhoons and heatwaves in every continent of the world. Even if the developed countries do not wish to provide funds for the victims of loss and damage as compensation, they can still provide these funds as a gesture of solidarity with those same victims of natural disasters.
Indeed, I would argue that the issue of providing finance for loss and damage is too important to leave only to governments—the funds should also be contributed by companies, city mayors and even citizens of the rich countries, as they are all responsible for the climate change impacts that are causing the loss and damage.
Finally, the world’s ability to tackle the climate emergency depends on the leaders of the G7 and G20 countries not only taking the issue of climate finance seriously, but on making their own Covid-19 recovery plans, which will be in the many trillions of US Dollars, and focusing on greener and more equitable investments going forward.
The G7 leaders’ meeting of 2021 may be the last time that the world’s leaders can take concrete steps forward in tackling climate change before it is too late, but it will require far-sighted leadership. I remain hopeful that they can indeed deliver.