Addressing the rising costs of climate change has been a topic of debate for many years, but the issue is becoming increasingly important as the climate warms and weather events become increasingly unpredictable and extreme.
It is against this backdrop that thousands of government negotiators, researchers and members of civil society will gather in the German city of Bonn over the next two weeks to prepare for the COP29 climate conference in Baku, Azerbaijan, at the end of the year.
Among the toughest questions are which developed countries should pay, how much should come from government sources and how much should come from the private sector, and how countries can be transparent about where the money is going.
“The issue is so complex and there are so many countries involved that two weeks in November is not enough,” said Petter Leyden, head of international climate policy at the non-governmental organization Germanwatch. “Having a meeting like Bonn to prepare is crucial.”
From Billions to Trillions
In 2009, developed countries decided to provide $100 billion (€92 billion) per year until 2020 to help developing countries mitigate and cope with the effects of the climate crisis. The OECD, which tracks progress towards the target, said: Donors only met the target in 2022, two years later than agreed.
“While reaching the full $100 billion per year target is worth celebrating, the funds needed to address the climate crisis in the coming years far exceed this amount,” Melanie Robinson of the US-based World Resources Institute (WRI) said in a statement.
Indeed, with signatories to the Paris Agreement committing to set new fiscal targets by 2025, pressure to raise targets is growing.
According to a 2021 survey According to the WRI, climate finance needs to increase to a staggering $5 trillion per year by 2030. This will only increase as large economies continue to burn fossil fuels and the heat waves, storms, droughts and wildfires associated with rising temperatures wreak devastating damage in an increasing number of places around the world.
“This isn't just a cost, this is an investment,” said Joe Thwaites, who works on international climate policy at the Natural Resources Defense Council, a US nonprofit. “Even if the investment is in the trillions of dollars, it still saves trillions of dollars in avoided damage.”
Who pays?
The question is, where will these dollars come from? Many of the developed countries that agreed to the 2009 targets are now asking other top-polluting economies to help. The biggest emitters, like China and Saudi Arabia, have so far been exempt because the UN considers them developing countries.
“The time for action is now and more countries need to pay their fair share,” German Development Minister Svenja Schulze said at the Berlin climate conference in April. “All the big emitters, the Gulf countries, China too, we need to do more.”
Another difficulty is how to attract private investment into climate change measures.
Ultimately, Twaites says, this will be a state responsibility – through taxation, regulation and subsidies – because it will be governments, not the private sector, that negotiate and implement new fiscal targets.
“It's important to consider what role every part of the global economy should play in meeting the challenge of climate change, but the commitments need to be ones that governments can hold to account,” he said.
Agree on transparency
One of the challenges in executing on the original financial goals is transparency.
Without clear reporting regulations for different types of finance, there is often confusion between donor and recipient countries. In other words, money that would have gone to development projects, for example, could end up being used to reduce emissions or adapt to global warming.
This uncertainty makes it difficult to know which countries have kept their promises.
“Developed countries have had a lot of free rein in how they present their climate finance statistics,” said Tom Evans, senior policy adviser at climate think tank E3G. “That creates a lot of mistrust and skepticism about whether targets are being met.”
The UN is due to finalise a new transparency framework at this year's COP summit, and countries are expected to use uniform reporting guidelines to show how they are contributing to climate action, including financial statistics.
Paving the way in Bonn
Unlike COP29 in Baku, which will be attended by world leaders, the smaller meeting in Bonn will bring together expert negotiators from national government delegations to hash out technical details without much political scrutiny.
“Those technical bits are key to getting a good deal done,” Evans says, “but the challenge in Bonn is always to see how close we can get to a final deal without agreeing on anything.”
The conference will lay important groundwork, but senior officials still need to make final decisions on contentious issues, giving Azerbaijan an opportunity to negotiate what to do with the foundations set out in Bonn.
Editor: Tamsin Walker
source:
https://www.oecd.org/climate-change/finance-usd-100-billion-goal/
OECD: Climate Finance and the $100 Billion Target
https://www.wri.org/research/state-climate-action-2021
World Resources Institute: State of Climate Action 2021: Systems Change Needed to Limit Global Warming to 1.5°C
United Nations Climate Change Conference (UNFCCC)
IISD: 2024 United Nations Climate Change Conference (UNFCCC COP 29)
