Most developing countries offer a straightforward answer: keep the status quo, meaning only the countries classified as industrialised when the UN climate treaty was adopted in 1992.

But this club of developed nations, vocally led by the European Union and the United States, argues that the world has changed dramatically over the past three decades.

They now want other countries that have become wealthier – and more polluting – to pitch in for the post-2025 New Collective Quantified Goal (NCQG), set to be agreed at the COP29 climate summit in Baku this November.

China targeted

The EU wrote this week, in a document submitted as part of the NCQG negotiations, that “the collective goal can only be reached if parties with high [greenhouse gas]-emissions and economic capabilities join the effort”.

The US echoed that position in its latest submission, arguing that “those with the capacity to support others” in pursuing action to cut emissions and boost climate resilience “must also be accountable” for delivering on the climate finance target.

But, as governments polish their arguments ahead of the next round of talks in mid-September, climate finance experts warn of an uphill battle to get everyone to agree to a fair and accurate way to broaden the donor base.

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For instance, as the world’s top polluter and the second-largest economy, China is the primary target of the finger-pointing. But, when the country’s emissions and wealth are divided by its enormous population, China does not rank among the main candidates for an expanded contributors’ pool, according to climate finance studies.

At annual climate talks in the German city of Bonn in June, China’s negotiator reacted angrily at suggestions his country should become a donor. “We have no intention to make your number look good or be part of your responsibility as we are doing all we can to save the world,” he said.

Who pays?

Switzerland and Canada have been the first nations to propose precise criteria to expand the list of contributors beyond developed countries.

The Swiss negotiators pitched two detailed metrics in their latest submission early this month.

The first would target the ten largest current emitters of carbon dioxide that also have a gross national income (GNI) per capita – adjusted for purchasing power parity – of more than $22,000.

Under this measure, Saudi Arabia and Russia would be included. China would too if it is calculated based on current international dollars, which Climate Home understands would be the Swiss intention, even though the proposal does not specify.

But China would be excluded if GNI per capita were based on constant 2021 international dollars, highlighting the ambiguity of the proposals at this point.

Populous nations with large absolute emissions like India, Indonesia, Brazil and Iran would be left out because the average wealth of their residents falls below the threshold, according to World Bank data.

Similarly, Canada’s proposal – released last Friday after this article was first published – singles out the top ten emitters but with a slightly lower GNI per capita threshold of $20,000. In this case, China would be included whichever GNI calculation is used.

The second category in the Swiss proposal targets countries that have cumulative past and current CO2 emissions per capita of at least 250 tonnes and a purchasing power parity-adjusted gross national income per capita of more than $40,000.

Assuming the Swiss proposal means emissions starting in 1990, then fossil fuel-producers in the Gulf like Qatar, the United Arab Emirates and Bahrain would be included, alongside South Korea, Singapore, Israel, Czechia and Poland.

But climate finance experts told Climate Home they are sceptical such strict criteria will work at the negotiating table and make it into a final decision.

“Discussing thresholds and indicators is a technical and politically charged issue, and it will be very difficult to get everyone to agree on them,” Laetitia Pettinotti, a research fellow at ODI, told Climate Home. She added that countries need to be encouraged to consider whether their emissions and GNI per capita are similar to those of developed countries, while also taking into account their climate vulnerability.

Pieter Pauw, assistant professor at the Eindhoven University of Technology, said the current system is “outdated and increasingly dysfunctional”, but the focus should be on making it less rigid rather than finding “arbitrary” ways to add more countries to a list.

Pauw is the co-author of a new study looking at options to increase the number of climate finance providers.

New “net recipients” category

The paper found that several developing countries, including China, Saudi Arabia and Russia, have shown appetite to finance multilateral development funds, such as the Global Fund to Fight AIDS, Tuberculosis and Malaria, but not those dedicated to climate action.

“It’s because the climate discourse is so politicised now,” Pauw said. “They are afraid that agreeing to contribute to a climate finance goal would set a precedent and burden them with more responsibilities.”

“It is important to find a way to have them join the ‘contributors club’ without putting a stamp on them and saying ‘OK, now you’re on the same level as developed countries’,” he added.

The study suggests one way out of the deadlock: instead of labelling countries rigidly as pure providers or recipients of climate aid, a third category of “net recipients” could be created. These would be nations that make financial contributions of any amount, while also being able to receive money at the same time.

“This compromise would allow countries to maintain their ‘developing’ status that gives them a right to receive finance where it is needed,” said Pauw. “But it also incentivises them to play a more proactive role that better reflects their new capabilities and responsibilities.”

Better transparency

A separate study by UK think-tank ODI suggests that many developing countries are voluntarily providing climate aid to fellow developing states, but their contributions go unrecognised at the moment because of a lack of transparency.

For example, China contributed over $10 billion in climate finance through its contributions to multilateral development banks and funds between 2015 and 2022, according to a newly updated ODI analysis shared with Climate Home and due to be released in early September.

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Pettinotti thinks that the donor base could be expanded by recognising these contributions and bringing them to the surface through a better reporting system.

“There is not going to be coercion – that is just not going to work,” she told Climate Home. “Making space for a bottom-up, self-determined position is all we can do to encourage more countries to contribute.”

Developing-world opposition

Many developing countries have opposed any official discussion over an expansion of the donor base in the talks so far, claiming that is not part of the NCQG working group’s mandate. They have also complained that, while fixating on this issue, developed countries have failed to put forward proposals on other key elements of the NCQG, such as the size of the funding target.

Avantika Goswami, climate lead at the Delhi-based Centre for Science and Environment, told Climate Home that developed countries have “a moral imperative” to provide climate finance because of their historically high emissions over the past century.

“The contributor-base expansion debate cannot be resolved within the narrow timeline of November 2024 when the NCQG is due to be decided”, she added. “Pushing for this expansion as a bargaining chip will only derail constructive discussions.”

This article was updated on 19/8 to include a proposal by Canada released after the article had been first published. It was also updated to remove a reference to Bermuda as a potential donor, as it is a British overseas territory. 

(Reporting by Matteo Civillini; editing by Joe Lo and Megan Rowling)

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At COP29 in Baku in November, the world will come together to agree a new target for climate finance. The stakes are huge given record temperatures and heatwaves, floods and droughts wreaking havoc globally.  

Tackling climate change and its consequences – and supporting wider human development – needs urgent investment. But the international financial system is struggling to respond. Is it time now to agree a new framework for international climate and development finance? Can the G20 under Brazil’s leadership, and international leaders meeting at the United Nations in New York in September, prepare the ground for COP29?  

Almost 54 years ago, in 1970, the world came together at the UN to set a target for rich countries to support poorer countries. They promised 0.7% of national income as “official development assistance” (ODA) to improve economic outcomes and reduce poverty. At the Copenhagen climate negotiations in 2009, world leaders again came together and promised to mobilise an annual $100bn to finance climate action by 2020. They said this would be “new and additional” to development finance.  

Hurricane Beryl shows why the new UK government must ramp up climate finance

Since then, with the exception of a few Europeans, rich nations have failed to meet the 0.7% target. In 2022, ODA peaked at $211bn, or 0.37% of combined OECD national income. Almost 15% of this was used to finance refugee-related costs in OECD countries themselves. The climate commitment was met in 2022, two years late. Without ODA levels rising, the 33% of ODA classified as climate-related cannot reasonably be claimed as “additional”.   

 In practice, maintaining this distinction between climate and development finance has proved difficult. For example, is planting trees in an urban landscape a climate investment because it absorbs emissions, a health investment because it reduces street-level temperatures, or a biodiversity investment as it creates habitats for wildlife? 

 The challenge of navigating these distinctions means it is difficult to track commitments or secure meaningful accountability against promises made. And it leaves many countries juggling a false trade-off between investments for the planet and for their people.  

Trillions needed

It is absolutely clear, however, that financing for poorer countries needs to increase dramatically. Despite progress over recent decades, development needs remain significant, with major setbacks through the pandemic. The Independent High Level Expert Group on Climate Finance estimates, presented to the G20, indicate that by 2030 $5.4 trillion a year will be needed for development, climate and nature. Of this, $1 trillion a year will be required in external financing for developing countries for climate and nature alone, of which roughly half will need to come from international public finance.  

International public finance – including new and additional aid finance from rich countries – is needed to provide concessional resources for the poorest and most indebted countries. It is needed to anchor capital increases for international financial institutions that can leverage this at least ten-fold, in part by borrowing from private capital markets. These institutions, together with other development finance institutions and strong policy environments, are key to bringing in private lenders and investors, whether by reducing risk or helping develop investment pipelines. 

The Loss and Damage Fund must not leave fragile states behind

As well as additional finance, poorer countries need money that better responds to their needs. In recent years, the relentless cycle of summits has spawned dozens of initiatives. The landscape is fragmented, with over 80 funds or instruments in the climate space alone. It has become increasingly difficult for poor countries to navigate this. There is an urgent need for a moratorium on new funds and to agree principles and coordination mechanisms for all external finance – building on the aid effectiveness principles agreed in the 2000s. 

Binding 0.7% commitment?

Taking these elements together, is it time now to drop the voluntary framework of ODA crafted in the last century to meet the problems of the last century? Can countries come together now to agree a new framework for official climate and development assistance, with a binding commitment for rich countries to finally meet the 0.7% national income promise by, say, 2030?  

Such a target, negotiated under a UN framework, would double the flow of aid finance. That funding would anchor multilateral, public and private investments that are needed to close the financing gap. A negotiated process could also bring in emerging countries like China that already provide significant finance. It could clarify definitions and shift arrangements for monitoring climate and other development spend from the OECD to the UN to improve accountability. And it could begin to consolidate the range of instruments and make them more responsive to the needs of poor countries. 

With public finances under strain around the world, many will say this is simply unaffordable. But international polling indicates that people are willing to contribute 1% of their income to fight climate change. Will politicians have the courage to engage their electorates? And at the G20, in the UN, in the lead up to Baku and beyond, will they have the vision to collaborate internationally to agree a new deal that delivers both development and climate justice? 

The post The world needs a new global deal on climate and development finance appeared first on Climate Home News.

This month has been unprecedented, even in a news cycle that has grown increasingly immune to ever-worsening climate catastrophes. After Beryl, a powerful category five hurricane, smashed its way across the Caribbean, an alarming report by the Copernicus Climate Change Service found that the planet has breached 1.5 degrees Celsius of warming for the twelfth month straight.  

For a new UK government pledging to take strong climate action at home, this must be a wake-up call for it to act on its historic responsibilities as a major global greenhouse gas polluter. These two alarming events alone show why it must put climate finance at the heart of its climate agenda as COP29 rapidly approaches. 

In Hurricane Beryl’s shadow, loss and damage fund makes progress on set-up

The Caribbean is one of the regions most at risk of climate change, with 70 percent of its population living or working in coastal areas surrounded by ever-warming seas that make hurricanes like Beryl more common and more violent. While a category five hurricane is unprecedented this early in the year, forecasters have already predicted that the region could experience up to seven severe hurricanes between now and the end of October.  

Extreme climate shocks are not only wreaking havoc, claiming lives, and destroying whole communities – they are also severely affecting the region’s tourism-dependent economies. Already it’s been estimated that the clean-up alone will cost tens of millions of dollars – a cost that doesn’t even begin to factor in what’s needed to rebuild destroyed communities still paying the price of previous disasters – crises that are gendered in their nature.  

Costly damage

Women and girls are more than 14 times more likely to be killed by climate shocks, according to Women’s Environmental Leadership Australia, while our own research found that women also face an increased risk of non-economic impacts such as gender-based violence and forced child marriage.

Hurricane Maria – the deadliest Atlantic hurricane to make landfall in the 21st century – cost the island nation of Dominica an estimated 225 percent of its GDP, while Hurricane Irma in the same year cost Antigua and Barbuda more than $136 million in damages, with the tourism industry representing around 44 percent of all losses.  

Even seven years on, the scale of the destruction has meant that communities are still rebuilding while dealing with hurricanes that worsen with intensity and frequency with each passing year. Yet, despite this, small island nations that have only contributed around 1% of all global carbon emissions, have struggled to unlock climate finance, accessing a mere $1.5bn out of the $100bn pledged in total to Global South countries.   

Negative debt spiral

To make matters worse, countries across the Caribbean have no choice but to turn to international financial institutions and take on eye-watering levels of debt to help communities regain their footing. Debt laden with restrictive repayment conditions further locks countries into a negative spiral – forcing governments to shape their economies and societies in order to service their debts.  

All this means that small island nations are left to play catch up, forever stuck on the back foot. Instead of spending the meagre levels of finance pledged to resilience-proofing their economies and communities, loans are used to service debts while interest rates for repayments globally remain at a record high.  

In its manifesto, Britain’s Labour Party spoke about “tackling unsustainable debt” as a “priority area” in its global commitments – indeed a positive step forward. But in power we need it to act and end the colonial debt system and support countries in the Caribbean and beyond move towards a just and climate resilient future. 

The Loss and Damage Fund must not leave fragile states behind

For a new government keen to show global leadership on climate, this year’s COP summit is a vital moment for the UK to play a much stronger role on climate finance than its Conservative predecessors. As the fourth-highest historic carbon emitter in the world, the UK has a moral and historic responsibility to address climate change, but its actions haven’t matched its words so far. 

During its election campaign, Labour failed to pledge new funds to address the huge gulf in climate financing for losses and damages, opting instead to simply deliver the previous government’s low-ball commitments to spend £11.6bn between 2021-2026. With nations set to meet at COP this year to define new annual climate finance commitments for Global South countries – known as the New Collective Quantified Goal (NCQG) – Labour needs to be much more ambitious in Azerbaijan. The future of communities on the frontlines of the climate crisis depends on it. 

Now, in the words of Grenada’s Prime Minister Dickson Mitchell, is not the time for countries like the UK to “sit idly by with platitudes and tokenism.” Now is the time for radical action and for the new UK government to stand up and deliver for the billions of people facing a runaway climate emergency. 

The post Hurricane Beryl shows why the new UK government must ramp up climate finance  appeared first on Climate Home News.

As the Loss and Damage Fund’s board meets this week, it is addressing key issues such as selecting a host country, how to disburse its financial resources, and lobbying for more funding from donors. However, the agenda currently doesn’t address the challenges communities in fragile contexts will face in accessing the fund. This oversight mirrors a recurring pattern in international climate talks, where the needs and realities of fragile and conflict-affected situations (FCS) often receive little to no attention. 

FCS, as defined by the World Bank, experience high levels of institutional and social fragility and violent conflict. These nations, which include Afghanistan, Mali and Niger to name a few, often face extreme climate hazards and struggle to cope due to weak institutions, poor governance, and ongoing conflict.  

Together, fragility and climate risks make these countries particularly vulnerable to the effects of the climate crisis. Because of their vulnerability, fragile contexts are frequently deemed too risky for climate finance investments, as project partners find it challenging to operate and donors are concerned about their return on investment.   

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While the Paris Agreement prioritizes Least Developed Countries (LDCs) and Small Island Developing States (SIDS) for international climate finance, LDCs and SIDS with additional challenges like violent conflict and fragility face barriers, receiving significantly less financing than more stable regions.  

Mercy Corps’ analysis reveals that the 10 most fragile states received only $223 million in climate adaptation financing in 2021, less than 1% of total flows. Without prioritizing the unique needs of fragile contexts, the Loss and Damage Fund risks excluding these climate-vulnerable communities once again. 

Action needed from the start

There are no references to fragility or conflict in the COP decision that established the Loss and Damage Fund or the Governing Instrument, which sets the Fund’s rules and practices. Additionally, there is no mention of how fragile or conflict-affected places in more “stable” countries will receive financing through the Fund.  

Fragility and conflict can limit how communities and institutions across a particular country respond to climate impacts. For example, in Northern Kenya, where Mercy Corps implements several climate adaptation and food security programs, unpredictable rainfall affects water resources, creating pressure on pastoral livelihoods and leading to conflict over water and pasture. Relatively weak institutions at the local government and community level lack the capabilities and resources to plan and implement climate adaptation interventions.

If the Loss and Damage Fund does not address how to support both fragile states and contexts like Northern Kenya now, it will be hard to incorporate these considerations later.   

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Advocating for specific challenges in fragile contexts during the Fund’s initial setup is crucial, as evidenced by Mercy Corps’ experience with the multi-billion-dollar UN-backed Green Climate Fund (GCF). Although the GCF has made strides to consider communities affected by climate change, conflict, and fragility through its policies and programs, including endorsing the UAE’s Declaration on Climate, Relief, Recovery, and Peace at COP28 last year, it still struggles to effectively serve communities in fragile contexts.  

Prioritizing finance for those who need it most

At the second meeting of the Loss and Damage Fund’s board this week, its members should take the following steps to realize the Fund’s promise and ensure loss and damage financing reaches those who truly need it most: 

1. Designate a board member for fragile and conflict-affected situations: This idea, initially proposed by Afghanistan for the GCF, was never fully realized. Board Members play an important role in shaping the policies and procedures of the Loss and Damage Fund and in the future, approving projects. Additionally, an active observer from civil society can represent the views of FCS at Board meetings.
2. Develop a framework to identify “particularly vulnerable” countries: The Loss and Damage Fund board will need to determine which countries are particularly vulnerable to climate change and thus, eligible to receive financing. To ensure a comprehensive understanding of vulnerability, the LDF must include fragility metrics such as economic, political, social cohesion, and security dimensions in any forthcoming vulnerability framework. 
3. Develop and approve operational policies and frameworks for fragile contexts: To effectively utilize loss and damage finance, the Fund should adopt policies and tools that allow fragile contexts to flexibly respond to shocks and disrupt the climate-conflict cycle. Mercy Corps’ Assessment for Adaptation to Conflict and Climate Threats, for example, examines the dynamics between climate change and conflict, and identifies entry points and approaches to interrupt the cycle of fragility. In Mali and Niger, where we piloted this tool, program participants identified the rainy season – especially the beginning and the end – as the time when many of the land-based conflicts take place between farmers and herders. It is being used by the UK government to plan ways to resolve tensions and support women who are particularly vulnerable.   

The creation of the Loss and Damage Fund was a significant victory for nations that have contributed the least to climate change yet bear the brunt of its impacts. The board of the Loss and Damage Fund now has a critical opportunity to ensure inclusion and equity by guaranteeing that all communities, especially those in fragile and conflict-affected states, have access to the necessary funding to address loss and damage. It is imperative that no one is left behind in this global effort to combat the climate crisis.

The post The Loss and Damage Fund must not leave fragile states behind  appeared first on Climate Home News.

Opinion polls predict that voters are set to back the left-wing Labour Party over the incumbent Conservative government by a significant margin, a BBC tracker shows.

Lammy told an event during London Climate Action Week that he supports the green reforms of the global financial system that have been proposed by the leaders of Kenya, Barbados and the World Bank.

Clare Shakya, climate lead at The Nature Conservancy, a green group, told Climate Home that Lammy’s comments were “massively ambitious” and “exactly what the world needs to hear right now”.

But promises on climate finance to developing countries in the Labour Party manifesto are the same as the ruling Conservative Party. Lammy argued that “all across the world, a cost-of-living crisis is making it hard to make the case solely for taxpayers’ funds” to support climate action in developing nations.

The Conservatives and Labour have both pledged to restore the overseas aid target from 0.5% to 0.7% of gross national income when “fiscal circumstances allow”. Both have committed to providing £11.6 billion ($14.7bn) in international climate finance between 2021 and 2026.

Claudio Angelo, international policy coordinator for Brazil’s Climate Observatory, commended Lammy “for being so vocal about the need for the UK to step up” on climate multilateralism.

But, he added, the Labour politician “doesn’t seem to offer anything new on climate finance and now, with four months left until COP29, we desperately need a breakthrough”.

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At the COP29 climate summit in November, governments are due to agree on a new post-2025 goal for international climate finance. Developed and developing countries have been divided so far, with developing nations proposing targets of $1.1-$1.3 trillion a year but wealthy governments refusing to openly discuss figures until the issue of where the money will come from is addressed.

Outside the UN climate talks, a coalition led by Barbados Prime Minister Mia Mottley – partly backed by the US, Germany and others – has been pushing for multilateral development banks to lend more money to green projects. Kenyan Prime Minister William Ruto has called for taxes on polluters to raise money for climate finance.

Lammy told a forum on climate politics, organised by think-tank E3G on Tuesday, that the global financial system’s rules “were set up in a different age, a different century – they don’t work today”. “We want to work with [World Bank president] Ajay Banga and others to bring about the changes that are required,” he added.

Angelo said he supports the need to shake up the system, but described Lammy’s references to reforming multilateral development banks while limiting public finance as “standard developed-country talking points”.

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Asked about the Labour manifesto promise to “audit” its relationship with China, Lammy said Labour would “engage appropriately” with the world’s biggest emitter on key policy areas, adding “there is no more important issue in so many ways than the climate issue.”

He praised the EU, US and Australia for their efforts to talk with China, and said a Labour government would “cooperate with China when we can”. The previous day, he told the India Global Forum that he would also work with India on climate change.

Li Shuo, director of the China climate hub at the Asia Society Policy Institute in Washington DC, told Climate Home that “the UK has been quite self-absorbed and quickly disappeared from the list of interlocutors with Beijing since COP26 in Glasgow”.

“The desire to restart engagement is a welcome development,” he added. “This is particularly true if the US election goes south. Much of the rest of the world will need to hold the fort.”

On domestic energy policy, Lammy reiterated Labour’s pledge not to issue any new licences for oil and gas production in the North Sea.

The party’s manifesto outlines further national climate policies, including decarbonising electricity by 2030 – five years earlier than the current government’s plans – by doubling onshore wind, tripling solar and quadrupling offshore wind.

(Reporting by Daisy Clague and Joe Lo; editing by Joe Lo and Megan Rowling)

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In the closing session of the two-week talks on Thursday evening, many countries expressed their disappointment and frustration at the lack of any outcome on the Mitigation Ambition and Implementation Work Programme (MWP), noting the urgency of stepping up efforts to curb greenhouse gas pollution this decade.

The co-chairs of the talks said those discussions had not reached any conclusion and would need to resume at the annual climate summit in Azerbaijan in November, unleashing a stream of disgruntled interventions from both developed and developing countries.

Samoa’s lead negotiator Anne Rasmussen, speaking on behalf of the Alliance of Small Island States (AOSIS), emphasised that “we really can’t afford these failures”. “We have failed to show the world that we are responding with the purpose and urgency required to limit warming to 1.5 degrees,” she said.

Anne Rasmussen of Samoa, speaking on behalf of the Alliance of Small Island States (AOSIS). Photo: IISD/ENB – Kiara Worth

Governments, from Latin America to Africa and Europe, lamented the lack of progress on the MWP because of its central role in keeping warming to the 1.5C temperature ceiling enshrined in the Paris Agreement.

Current policies to cut emissions are forecast to lead to warming of 2.7C, even as the world is already struggling with worsening floods, droughts, heatwaves and rising sea levels at global average temperatures around 1.3C higher than pre-industrial times.

Mitigation a taboo topic?

Despite the clear need to act fast, a deep sense of mistrust seeped into talks on the MWP in Bonn, with negotiators disagreeing fundamentally over its direction, according to sources in the room.

Developed countries and some developing ones said that the Like-Minded Group of Developing Countries (LMDCs), led primarily by Saudi Arabia and China, as well as some members of the African Group, had refused to engage constructively in the discussions.

“The reason is that they fear this would put pressure on them to keep moving away from fossil fuels,” an EU delegate told Climate Home.

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Bolivia’s Diego Pacheco, speaking on behalf of the LMDCs, rejected that view in the final plenary session, while describing the atmosphere in the MWP talks as “strange and shocking”. He also accused developed countries of trying to bury data showing their emissions will rise rather than fall over the course of this decade.

The EU and Switzerland said it was incomprehensible that a body charged with cutting greenhouse gas emissions had not even been allowed to discuss them.

“Mitigation must not be taboo as a topic,” said Switzerland’s negotiator, adding that otherwise the outcome and credibility of the COP29 summit would be at risk.

Rows over process

Before MWP negotiations broke down in Bonn, its co-facilitators – Kay Harrison of New Zealand and Carlos Fuller of Belize – had made a last-ditch attempt to rescue some semblance of progress.

They produced draft conclusions calling for new inputs ahead of COP29 and an informal note summarising the diverging views aired during the fraught exchanges. For many delegates, the adoption of those documents would have provided a springboard for more meaningful discussions in Baku.

But the LMDC and Arab groups refused to consider this, arguing that the co-facilitators had no mandate to produce them and calling their legitimacy into question – a claim rebutted by the UN climate secretariat, according to observers. Frantic efforts to find common ground ultimately came to nothing.

A session of the Mitigation Work Programme in Bonn. Photo: IISD/ENB – Kiara Worth

Fernanda de Carvalho, climate and energy policy head for green group WWF, said the MWP discussions must advance if the world is to collectively reduce emissions by 43% by 2030 and 60% by 2035 from 2019 levels, as scientists say is needed.

The MWP should be focused on supporting countries to deliver stronger national climate action plans (NDCs) – due by early next year – that set targets through to 2035, she said.

“Instead, we saw [government] Parties diverging way more than converging on hard discussions that never made it beyond process,” she added.

‘Collective amnesia’

Some developing countries, including the Africa Group, pushed back against what they saw as efforts by rich nations to force them to make bigger cuts in emissions while ducking their own responsibilities to move first and provide more finance to help poorer countries adopt clean energy.

Brazil – which will host the COP30 summit in 2025 – said the MWP was the main channel for the talks to be able to find solutions to put into practice the agreement struck at COP28 to transition away from fossil fuels in energy systems in a fair way.

But to enable that, “we have to create a safe environment of trust that will leverage it as a cooperative laboratory”, he said, instead of the “courthouse” it has become “where we accuse and judge each other”.

Observers in Bonn pointed to the absence of discussions on implementing the COP28 deal on fossil fuels, which was hailed last December as “historic”.

“It seems like we have collective amnesia,” veteran watcher Alden Meyer, a senior associate at think-tank E3G, told journalists. “We’ve forgotten that we made that agreement. It’s taboo to talk about it in these halls.”

‘Detour on the road to Baku’

After the exchange of views, UN Climate Change executive secretary Simon Stiell noted that the Bonn talks had taken “modest steps forward” on issues like the global goal on adaptation, increased transparency of climate action and fixing the rules for a new global carbon market.

“But we took a detour on the road to Baku. Too many issues were left unresolved. Too many items are still on the table,” he added.

The closing plenary of the Bonn Climate Change Conference. Photo: Lucia Vasquez / UNFCCC

Another key area where the talks failed to make much progress was on producing clear options for ministers to negotiate a new post-2025 climate finance goal, as developed countries refused to discuss dollar amounts as demanded by the Africa and Arab groups, among others.

Bonn talks on climate finance goal end in stalemate on numbers

Developing nations also complained about this in the final session, while others expressed their concern that a separate track of the negotiations on scientific research had failed to address the topic in a rigorous enough manner.

In his closing speech, Stiell reminded countries that “we must uphold the science”, and urged them to accelerate their efforts to find common ground on key issues well ahead of COP29.

The next opportunities to move forward on the new finance goal – expected as the main outcome from the Baku summit – will be a “retreat” of heads of delegations in July followed by a technical meeting in October, including a high-level ministerial dialogue on the issue.

But several observers told Climate Home that highly contentious issues – such as the size of the funding pot and the list of donors – are beyond the remit of negotiators and are unlikely to be resolved until the political heavyweights, including ministers, take them up in Azerbaijan in November.

Rising costs of climate crisis

“Business-as-usual is a recipe for failure, on climate finance, and on many other fronts, in humanity’s climate fight,” Stiell said. “We can’t keep pushing this year’s issues off into the next year. The costs of the climate crisis – for every nation’s people and economy – are only getting worse.”

Mohamed Adow, director of Kenya-based energy and climate think-tank Power Shift Africa, warned that “multiple factors are setting us up for a terrible shock at COP29″, saying this “ticking disaster threatens to undermine” the NDCs and in turn the 1.5C warming limit.

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In comments posted on X, formerly Twitter, Adow called for justice for those dying from the impacts of climate change such as extreme heat in India and Sudan in recent days, arguing that climate finance remains “a vital part in securing a safe and secure future for us all”.

But, he said, Bonn did not deliver a beacon of hope for vulnerable people. “Developing countries are expected to slay the climate dragon with invisible swords, having gotten zero assurances on the long-term finance they need,” he added.

(Reporting by Megan Rowling and Matteo Civillini, editing by Joe Lo)

The post UN climate chief warns of “steep mountain to climb” for COP29 after Bonn blame-game appeared first on Climate Home News.

A few weeks ago, leaders of Small Island Developing States (SIDS) met in Antigua & Barbuda to discuss our next decade of action. This, for us, is the critical decade, no less. We have a few years to change the tides that are swallowing our islands and extinguishing our culture and our identity.  

Pacific Island communities are unwilling witnesses of the climate crisis – emitting minuscule amounts of greenhouse gases while bearing the brunt of the extreme and devastating consequences of the world’s failure to break its addiction to fossil fuels.  

During that meeting, we heard from some G7 leaders that they will support our priorities, that a fossil fuel phase-out and a just and equitable transition is necessary. But these cannot be hollow words. As the single greatest security threat for our region, it is time to implement your commitments or be held accountable for your lack of inaction by carrying the loss of our future generations on your shoulders. 

Just a few months ago, at the UN climate talks in Dubai, countries around the world finally agreed to transition away from fossil fuels. This week in Bonn, any talk of how countries plan to implement this agreement was noticeably absent.

Bonn bulletin: Fossil fuel transition left homeless

But now, G7 nations – Canada, Japan, Italy, the United States, Germany, the United Kingdom, and France – are gathering at a historic time for climate politics, holding one of the first opportunities to show their leadership by putting the COP28 decision on fossil fuels into action. 

This will also be the last time these countries meet before they are required to submit updated and enhanced climate plans through to 2035 under the Paris Agreement. It is a final chance for G7 nations to adopt the measures that are necessary to limit warming to 1.5°C. 

Despite having both the capacity and the responsibility to be leaders driving forward a full, fast, fair and funded phase-out of fossil fuels, these countries are not walking the walk – at home or abroad.

Islands as “collateral damage”?

Some G7 countries have plans to massively expand fossil fuel production at home despite science telling us that no new oil, gas, or coal projects are compatible with a safe climate, while others are using billions of the public’s money to finance more fossil fuel infrastructure abroad. 

We are urging G7 nations to demonstrate true leadership at the upcoming negotiations, immediately halting the approval of all new fossil fuel projects and committing to 1.5°C-aligned timelines for phasing out existing fossil fuel reliance in a just and equitable manner.  

This transition must prioritise the needs of developing countries, which bear the brunt of climate change impacts despite contributing the least to its causes. 

G7 coal charade: Funding the fire they claim to fight

G7 countries have already committed to end international public finance for fossil fuel projects but continue approving billions of dollars for fossil fuel infrastructure. They are giving the fossil fuel industry a lifeline, indebting vulnerable countries, and delaying a just energy transition.  

In the words of UN Secretary General Antonio Guterres: “The idea that an entire island state could become collateral damage for profiteering by the fossil fuel industry is simply obscene.” 

There is no shortage of public money to enable a just and equitable transition to renewable energy and turn the COP28 agreement into a reality. It is just poorly distributed to the most harmful parts of the global economy that are driving climate change and inequality: fossil fuels, unfair colonial debts, and the super-rich. 

We need G7 countries to pay their fair share on fair terms for fossil fuel phase-out and the other crises we face. Climate finance remains the critical enabler of action – over the course of our meetings in Antigua & Barbuda we heard some G7 countries make commitments and pledges; we also heard a lot of solutions and options that will exacerbate our debt burden.  

But for us, it is clear. Climate finance must be scaled up to meet the trillions of dollars needed for adaptation, mitigation, and addressing loss and damage; and sent to where it is most needed – on fair terms that do not further burden our economies with debt. 

Hold fossil fuel firms to account

The members of the G7 are among the world’s most powerful and wealthiest nations. They have a responsibility to lead the way both at home and abroad. Anything less is hypocrisy and gross negligence, and risks endangering the implementation of the COP28 decision to transition away from fossil fuels. 

The Pacific Island nations have been vocal advocates for ambitious climate action and have led by example for decades. In 2023, our leaders aspired to a Fossil Fuel Free Pacific. We embedded the language of phase-out and transition in our leaders’ declaration.   

Bonn talks on climate finance goal end in stalemate on numbers

We have felt the impacts of climate change more acutely than most and have consistently called for comprehensive and equitable global action for the very survival of our nations and for the good of all people and species.  

For Pacific Island nations, the transition to clean and renewable energy is not just a goal but a necessity for survival. We call upon the G7 to reflect the highest possible ambition. These countries must acknowledge and support our aspiration for a fossil fuel-free future, setting an example for sustainable development that prioritizes the well-being of people and planet over profit – and ensure that the fossil fuel companies responsible for the climate crisis bear the cost of their actions. 

The time for action is now. The fate of our planet hangs in the balance, and the decisions made by the G7 nations will shape our collective future. We implore them to heed the call of the Pacific Island nations and rise to the challenge of the climate crisis with boldness, ambition and urgency. Our shared future depends on it. 

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Thousands of country representatives have spent the last two weeks in Germany at the UN Bonn Climate Conference, marking the mid-year point to the biggest climate summit of the year: COP29. 

But despite being a core milestone each year for global climate discussions, there is troublingly little to show for it. And with less than six months before COP29 – and after years of negotiations – there has been a shameful lack of commitment on delivering for those on the frontline of the climate crisis.   

Climate finance and adaptation play imperative roles in ensuring communities are able to thrive in the face of unpredictable and unforgiving weather patterns. And while both topics have been heavy on the Bonn agenda, finance negotiations so far have failed to really consider those living with climate uncertainty right now. 

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WaterAid has been on the ground at the Bonn talks, calling for robust water, sanitation and hygiene indicators to flow directly through key climate adaptation frameworks, especially the Global Goal on Adaptation and the Loss and Damage Fund – both of which will change the course of the future for those living on the frontlines of the climate crisis. 

Support lacking for those on the frontline

Yet countries at Bonn have hit a roadblock on the Global Goal on Adaptation (GGA), with discussions struggling to go beyond a shared acknowledgement of the value of including the support of experts to progress on areas of concern. Progress on GGA targets remains stagnant as parties grapple over country-specific concerns instead of coming to a collective outcome, with less than two days left of the conference. 

Meanwhile, the most recent talks on the Loss and Damage Fund failed to consider the urgency of the escalating climate crisis at hand and the scale of financing needed to ensure frontline nations can recover and rebuild from impacts of climate change. 

North Africa’s disappearing nomads: Why my community needs climate finance

The new collective quantified goal on climate finance (NCQG) – a new and larger target that is expected to replace the current $100bn climate finance goal – is also high on the Bonn agenda. Many core elements of this new climate fund goal are yet to be agreed.

WaterAid is calling for the NCQG to have sub-goals for adaptation and loss and damage, as well as for the finance pot to have a direct channel to vulnerable communities so they can be involved in ensuring the funds go to where the support is most needed.  

Too much or too little water

Whilst conversations at Bonn have been lukewarm, the climate crisis has remained red hot. Right now, countries around the world are watching it unfold in real time. From flooding and cyclones to drought and deadly heatwaves, communities are dealing with the terrifying reality of living with too much or too little water.  

Southern Asia is being exposed in particular to a dangerous and chaotic cocktail of unpredictable weather, making life unbearable for those on the climate frontline. 

In late May, Cyclone Remal hit coastal parts of southern Bangladesh with gale speeds of up to 110km/h causing devastation across the country for 8.4 million people, leaving many without power, damaging crops and making tube wells and latrines unusable.  

Meanwhile, record temperatures were recorded in Bangladesh through April and May where temperatures soared above 43 degrees Celsius, scorching 80% of the country and leaving thousands without power. 

At the same time, Pakistan witnessed its wettest April since 1961, with the south-western province of Punjab experiencing a staggering 437 percent more rainfall than usual, fuelling the malnourishment of 1.5 million children and damaging 3,500 homes.  

Water infrastructure key to adaptation

Water, sanitation and hygiene equip communities like those across South Asia with the ability to adapt to climate change, protecting livelihoods and farms. These basic essentials ensure people are not subject to the spread of waterborne diseases while preventing families from being forced to migrate due to sea level rises.  

From flood defences to drought resistance, water also acts as a guiding light as to where donors should direct climate finance, ensuring long-term support reaches the people who need it most. Investment in water-related infrastructure in low and middle-income countries is expected to deliver at least $500 billion a year in economic value, protecting countless lives and boosting economic prosperity. 

Bonn talks on climate finance goal end in stalemate on numbers

Now is the time for global leaders to put pen to paper and set plans in motion to ensure that we see real progress on how we achieve the GGA targets at the grassroots and that the necessary level of climate funding reaches those who need it most, without further delay.  

This truly is a matter of life and death – and prioritising action on water, sanitation and hygiene across global adaptation goals may be our only hope to prevent climate change from washing away people’s futures.  

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As discussions wrapped up on Tuesday, representatives of countries on both sides expressed disappointment with the process that is intended to result in an agreement on a new collective quantified goal (NCQG) at COP29 in Baku in November.

They will leave the German city with a 35-page informal “input paper” stuffed with wildly divergent views and repeatedly described as “unbalanced” by negotiators during the final session of the talks.

“It is time we get down to serious business,” said a negotiator from Barbados, pleading with colleagues to accelerate discussions before “more and more SIDS [small island developing states] and LDCs [least-developed countries] disappear from this gathering because we disappear from this planet”.

Show us the money

For most developing countries, the sticking point is the lack of negotiations on the size of the new goal – known as the “quantum” in technical language. Governments have already agreed that the new target should be set “from a floor of $100 billion per year” – the existing commitment – and should take into account “the needs and priorities of developing countries”.

Developing countries suggest rich nations tax arms, fashion and tech firms for climate

The Arab and the African groups landed their proposals for a new dollar amount on the table in Bonn – between $1.1 trillion and $1.3 trillion a year for the five years from 2025. Meanwhile, they accused rich states of failing to do the same and refusing to talk about numbers.

“We haven’t heard anything from them on their vision for the quantum,” said Egypt’s negotiator. “Every time there’s been [one] excuse or another why we couldn’t discuss quantum,” reiterated Saudi Arabia’s delegate.

Egypt’s negotiator Mohamed Nasr (middle) speaking with other delegates in Bonn. Photo: IISD/ENB – Kiara Worth

China echoed the same sentiment, but went further in its tirade against some developed countries. “We have been dealing with [a] few insincere and self-serving nations that have no intention of honoring international treaties,” the country’s negotiator said, referring to the 2015 Paris Agreement.

“We have no intention to make your number look good or be part of your responsibility as we are doing all we can to save the world,” he added, hinting at rich countries’ long-standing attempts to broaden the list of finance contributors to developing countries that are wealthier and more polluting.

‘A long way to go’

Developed countries accused their counterparts of entrenching their established positions instead of looking for areas of common ground.

Australia’s representative said the current document – which is not a negotiating text – shows “how much we disagree”. She added that there won’t be an agreement in Baku “if we engage in a game of striking out each other’s texts […] or a tug-of war”.

She expressed her government’s view that a numerical dollar target is “the star on the top of the Christmas tree” and should only be decided once the structure of the goal has been settled.

The UK’s negotiator noted that “we have a long way to go”, as “we are not in a process that will help us get to a final text”.

A delegate from the United States called for a “step change” in the process. “I feel most of what we’ve been doing is repeating views and not going into details on what folks mean,” he added.

No shortage of public money to pay for a just energy transition

Following the comments from developed nations, Saudi Arabia’s negotiator took to the floor again for the Arab Group. “I have to defend members of my group,” he said. “We are being gas-lit”.

It is now be up to the co-chairs of the talks to prepare a new informal document laying out a path forward based on the divergent views. The new paper will be sent to governments ahead of the next round of talks, which are yet to be scheduled.

“We encourage you to reach out to others using the inter-sessional period [between meetings] to discuss areas where you see fertile common ground,” said co-chair Zaheer Fakir in closing remarks. “Up until now we have not seen concrete efforts to reach out to your partners.”

(Reporting by Matteo Civillini and Joe Lo; editing by Megan Rowling)

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Rich countries have a bill to pay. A study in the journal Nature says they will owe low- and middle-income countries an estimated $100 trillion-$200 trillion by 2050 since they have caused the climate crisis with their outsized emissions, while developing nations bear the brunt of the impacts. 

As negotiators gather in Bonn this week to prepare for November’s COP29 climate summit, wealthy governments have to face the music and pay their fair share of climate finance. With low-income countries struggling with rising seas and spiralling unjust debts, the stakes have never been higher. The good news? Rich countries can deliver the funds needed for climate action. What is lacking is the political will, as usual. But we can change this.

Bonn bulletin: Crunch time for climate finance

At last year’s COP negotiations, world leaders recognised for the first time that all countries must “transition away from fossil fuels” in energy systems. This year they must agree on a new climate finance goal for 2025, which will set a new benchmark for the quantity and terms of the money owed.

Year after year, wealthy countries have failed to pay up. While transitioning away from fossil fuels is technically possible and relatively low-cost, the failure to finance transformative climate solutions like 100% renewable-ready grids, energy access, and programs to support workers and community transitions is one of the key remaining obstacles to tackling the climate crisis. Meanwhile, the lack of funding to adapt and respond to climate impacts means fires, droughts and floods are already bringing devastating consequences.

As UN Climate Change Executive Secretary Simon Stiell has said, “A quantum leap this year in climate finance is both essential and entirely achievable.” But, as negotiations have begun to establish a new global climate finance target, wealthy countries are once again trying to shirk their responsibilities.

Loans and ‘private-sector first’

They have come to the table with only tiny amounts of money. Worse, they argue it should be delivered mostly as loans, investments and guarantees – which they profit from, while climate vulnerable ‘recipient’ countries rack up debt. The US, Canada, UK and their peers claim that there is not enough public money to do anything else. Yet we know they can come up with enormous sums, like for COVID stimulus plans and for bailing out the banks.

Wealthy countries say the private sector can cover most of the costs instead. This ‘private sector first’ approach is particularly emphasized for energy finance. The idea is that all that is needed is a bit of public finance to ‘de-risk’ energy investments and attract much greater sums of private finance.

But as a former World Bank Director has argued, this approach has consistently delivered far less money than promised and “has injustice and inequality built in,” while reducing the role of government action for creating the right market conditions to deliver profits to investors. We need much more public funding to be delivered as grants for a fair energy transition.

Developing countries suggest rich nations tax arms, fashion and tech firms for climate

Rather than relying on the private sector, rich countries can afford the grants and highly concessional finance required for a fast, fair and full phase-out of fossil fuels, which societies and communities want. There is no shortage of public money available to fund climate action at home and abroad. Rather, a lot of it is currently going to the wrong things, like dirty fossil fuels, wars and the super-rich.

The lack of progress is also a symptom of a larger global financial system where a handful of Global North governments and corporations have near-full control. This unjust architecture results in a net $2 trillion a year outflow from low-income countries to high-income countries, historic levels of inequality and food insecurity, and record profits for oil and gas companies.

Make polluters pay

To raise the funds, wealthy governments can start by cutting off the flow of public money to fossil fuels and making polluters pay. The science is clear that there is no room for any new investments in oil, gas or coal infrastructure if we want to secure a liveable planet. And yet governments continue to pour more fuel on the fire, using public money to fund continued fossil fuel expansion to the tune of $1.7 trillion in 2022. 

There is already momentum to stop a particularly influential form of fossil fuel support. At the COP26 global climate conference in Glasgow, 41 countries and institutions joined the Clean Energy Transition Partnership (CETP). They pledged to end all direct international public finance for unabated fossil fuels by the end of 2022 and instead prioritise their international public finance for the clean energy transition.

Rich nations meet $100bn climate finance goal – two years late

With the passing of the end of the 2022 deadline, eight out of the sixteen CETP signatories with significant amounts of international energy finance have adopted policies that end fossil fuel support – and we see international fossil finance figures dropping by billions as a result.

Making fossil fuel companies pay for their pollution through a ‘windfall’ tax on fossil fuel companies in the richest countries could raise an estimated $900 billion by 2030. Alongside taxing windfall profits, a progressive tax on extreme wealth starting at 2% would raise $2.5 trillion to 3.6 trillion a year. Brazil currently has a proposal to tax the super-rich globally, which is gaining momentum at the G20. 

Canceling illegitimate debts in the Global South can free up even more.

The public money is there for a liveable future for all. As leaders negotiate on the next climate target, we must ensure those most responsible for the climate crisis finally pay up.

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Frontline communities around the world are shouldering the deleterious injustices of climate change, especially in Africa despite it emitting only around 4% of total global carbon emissions. 

A case in point is the nomadic Amazigh tribes in the southeastern reaches of Morocco. The Amazighs are the oldest known inhabitants of Northern Africa. Their ancestral lifestyle is threatened by climate change, manifest in consecutive years of drought, relentlessly eroding their rights, including access to water and education, and their heritage. 

The story is personal to me, as I am from this region, and these are my people. My father was a nomad but was forced to give up nomadic life and settle in a village due to drought in the early 1980s. 

Among our tribe, “we’ve gone from nearly 600 tents in 1961 to just a few dozen today”, my father declares. According to the national census, Morocco’s total nomadic population in 2014 stood at just 25,274, a 63% drop from 2004. 

“Great enabler of climate action” – UN urges Bonn progress on new finance goal

As pastoralists reliant on livestock, particularly sheep and goats, nomadic families depend on suitable pastures, but drought increasingly has rendered pastures and water sources barren. “This is the eighth consecutive year of drought, this situation is unprecedented,” a 91-year-old nomad told me. 

This is also a story of loss and damage to the nomads’ very culture and way of life. As someone familiar with the experience of displacement, I have witnessed how climate change strikes at the heart of our culture and identity. It’s not just about losing homes or livelihoods — it’s about losing the very essence of who we are.  

Each drought-induced exodus undermines our traditions, leaving us adrift in a world that seems less and less familiar.  

This is an existential crisis for my community. 

In search of water 

In Morocco, the frequency of droughts has increased fivefold, from one dry year in 15 between 1930-1990 to one dry year in three over the last two decades. Now, the Intergovernmental Panel on Climate Change predicts a doubling of drought frequency in North Africa to come.  

Water is being lost, and much is lost with it. As Moha Oufane, another nomad, said to me: “Water is everything. It’s the most important thing for us. We can buy food and feed livestock with what’s left in the mountains or by going into debt, but water can’t be bought. It’s priceless.”

Water shortages are disrupting traditional pastoral routes, forcing families to give up nomadism or put themselves at risk. In the past, the year would be structured around a well-defined nomadic pattern: summer months were devoted to Agdal-to-Imilchil, while winter months were spent on the Errachidia side, with a return to Assoul (a village in Tinghir) and the surrounding area when the cold set in.  

Today, this traditional route no longer exists. Nomads go where little water remains, to preserve their livelihoods and the lives of their livestock. 

Only one new water point exists on this traditional route, a project led by the Moroccan state. “This project is extremely beneficial for us,” Moha says. “Similar projects in other nearby areas would be of immense help to us.”

Loss and damage sub-goal

Many nomads are forced to go into debt to feed their livestock, their main source of income, which worsens their situation. According to Moha, some accumulated debts of nearly 30,000 dh ($3,000) between October 2023 and January 2024”. Debt has long been used by these communities, but this was when nomads were confident of being able to pay it back after good rainfall seasons, which is no longer the case. 

Conflicts over territory and diminishing water-dependent resources, once unthinkable, now disrupt the social cohesion and hospitality for which nomadic communities are renowned. 

The plight of Morocco’s nomads illustrates the need for international support for climate-affected communities. Rich historic-emitter countries must honour their obligations to provide climate finance under the United Nations Framework Convention on Climate Change (UNFCCC).  

Quality – not just quantity – matters in the new climate finance goal

Economic costs of loss and damage in developing countries are estimated to reach $290-580bn/year by 2030. Grant finance, not debt, must be provided for communities to repair and recover. Developing countries should not have to spend a penny to cope with loss and damage they did not cause. However, despite the celebrations, the new UN Loss and Damage Fund has only received $725 million in pledges. 

We need a sub-goal for loss and damage in the New Collective Quantified Goal (“NCQG”) on climate finance, to be debated over the coming days at the mid-year UN climate negotiations in Bonn and the agreed at COP29 in Baku. It is immoral for developed countries to be blocking such a sub-goal. 

It is outrageous that nomads and frontline communities should be left to fend for themselves and see their ancestral lifestyles, identities and cultures eroded, while some wealthy nations prosper from investment in fossil fuels and find public finance for their own purposes but not for climate finance. We refuse to be collateral damage in a game of power and profit. 

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With climate negotiators gathered at mid-year UN talks in Bonn, Germany, to prepare for COP29, a critical question hangs in the air: how can we ensure that the money mobilized to address the climate crisis is not only sufficient in quantity, but also effective in quality? 

Negotiators have been tasked to set a new collective quantified goal, or NCQG, on climate finance, which rapidly scales the amount of money we need globally for climate action. In the face of stark needs, the NCQG must be ambitious.  

Experts estimate that by 2030, $2.4 trillion will be required annually to support the needs of developing countries alone. 

“Great enabler of climate action” – UN urges Bonn progress on new finance goal

With just five months before the goal is on the decision-making table at COP29, it is also critical that negotiators consider the issue of quality – such as the type of financing, the ways money is accessed, alignment with national priorities, the predictability of funds, and their impact. 

High-quality climate finance should not create additional burdens and has clear pathways to access for countries and communities in need. However, many developing countries have expressed concern that the current quality of finance is far from where it needs to be. 

Concessional and accessible 

An important signal of quality in climate finance is the degree of concessionality – or how favorable the terms of financing are. Concessional finance includes grants and loans with low interest rates and longer repayment periods, which are easier for recipient countries to manage.  

Concessional tools also have potential to scale action by mobilizing private finance. These ‘blended finance’ approaches can often do far more than a traditional grant or loan. For example, to build a solar plant in Uzbekistan, the World Bank utilized concessional loans to mitigate financial risk and incentivize private-sector participation. 

However, in recent years, more than 70% of public climate finance has been delivered through loans, most of which have been non-concessional. This poses a challenge as many developing countries face burgeoning debt crises, and non-concessional loans risk further indebting these vulnerable states.  

Yet, countries in debt distress like Ghana and Zambia still received 17% of their climate finance through loans in 2021. Without proper concessionality, climate finance meant to build resilience can paradoxically make things worse. 

Rich nations meet $100bn climate finance goal – two years late 

Another measure of quality is the accessibility of finance. Increased climate finance must come with clear channels of access for developing countries, but bureaucratic hurdles, limited transparency, and rigid funding terms can hinder governments from accessing international funding streams.  

For example, small island states have struggled to access resources from climate funds due to capacity constraints in navigating the finance landscape. Access to private finance is also lacking as private funders perceive high risks of investing in emerging markets. If climate finance flows remain unavailable or inaccessible to developing countries, it will be impossible to meaningfully address their needs and priorities. 

Multi-layered goal 

The structure of the NCQG can incorporate elements of impact, concessionality and access. Negotiators should pursue a goal with multiple layers – setting a support target for providing public finance to developing countries, alongside an investment target for mobilizing all sources of finance globally. 

The support goal should be underpinned by concessional finance, targeting the national priorities of developing countries through grant and other non-debt financial instruments fit for purpose. These layers can foster blended approaches that scale available finance and enable greater access without creating new debt burdens. 

Lastly, for public finance to more effectively open new channels of access, we need steady reform in the broader financial system, including the multilateral development banks (MDBs). The MDBs are undertaking reforms to simplify access and increase lending capacity, and made new announcements at the World Bank’s Spring Meetings in April, which will allow public financing from MDBs to catalyze greater private finance flows and mitigate risks of debt distress. 

Pairing quantitative and qualitative elements should be at the top of the agenda in Bonn. Many countries have already called for qualitative elements to be incorporated into the goal. Now, delivering this quality – via greater concessionality, accessibility, and innovation – will be vital to ensure that climate finance can play a transformative role in addressing the complex challenges posed by climate change. 

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After three decades of negotiations to establish the fund for climate loss and damage, its inaugural board meeting just concluded in Abu Dhabi. The establishment of this fund is a monumental milestone. We are still some way off, but equally historic are seismic shifts underway in how we may finance it.  

The first meeting was a modest success. The fourteen members chosen by developing country constituencies and twelve from developed countries demonstrated unity of purpose. Two impressive and committed co-chairs – Jean Christophe Donnellier of France and South African Richard Sherman – were elected. The new board agreed on processes to select an executive director and a host country.

Mistrust eased between some members of the board and the World Bank, which negotiators had previously chosen, with conditions, to be the secretariat of the fund. This unity and commitment are seeds of hope for the fund’s future.  

Loss and damage board speeds up work to allow countries direct access to funds

These seeds will need money to grow. The only long-run solution to the escalating climate crisis is accelerating the energy transition from fossil fuels. However, due to the lack of progress, we now face losses and damages that require financing of over $150bn per year – according to the IHLEG Report for COP26 and 27.

These losses disproportionately affect the most vulnerable, exacerbating poverty and inequality. Adding injustice to a bleak situation is that the wealthiest countries are most responsible for the stock of greenhouse gases that cause global warming.  

The OECD estimates that total development assistance is $200bn per year, and even though this is half of the commitments made five decades ago, the politics of the day suggest aid money is more likely to be re-channelled for domestic purposes than increased substantially. So where could $100bn plus come from?

Some developed countries promoted the idea that they would initially pay the insurance premiums for a small number of small countries. Twinning insurance to disaster seems natural –  especially if you want to minimise using tax-payers money. But with insurers pulling out of California, Louisiana and Florida because of climate risks, those living in other climate-vulnerable countries – 40% of the world’s population – felt this was at best not scalable and at worse disingenuous.

Climate, like a preexisting medical condition, has become uninsurable. It is now a risk of substantial loss that is growing – and increasingly certain, frequent, and correlated – and so insurance’s spreading and pooling qualities don’t work. If the annual known climate loss is $150bn and rising, yearly premiums cannot be much less without direct or cross-subsidies that no one is budgeting. It’s insurance, not magic. 

Time to test new taxes

For the climate-vulnerable today, the only real insurance against future loss and damage is investing massively in resilience which would generate future savings several times their cost.

One idea mooted by the Inter-American Development Bank is that the multilateral banks lend for a resilience project in a climate-vulnerable country at little more than the banks’ preferential borrowing rates, and donors separately contribute to a substantial reduction in the interest rate once an independent assessment has certified that the investment has achieved the intended resilience.

Countries can borrow for resilience if the repayment period is sufficiently long to capture the savings, but not for current loss and damage. Without grants to fund that, vulnerable countries will drown in debt long before sea levels rise. 

The global financial crisis and COVID showed the promise of long-dismissed ideas. Over the past twenty-four months, 140 countries have agreed an internationally minimum corporate income tax, and the EU has put on an extraterritorial carbon border adjustment tax. The International Maritime Organisation is debating an international levy to fund the shipping industry’s decarbonisation.

Southern Africa drought flags dilemma for loss and damage fund

The fund’s board will want to hear proposals from the new taskforce established by Barbados, France, and Kenya to consider international taxes to pay for global public goods.

They will also be interested in the just-published proposal for a Climate Damages Tax on the production of fossil fuels by an amount related to the damage they will cause. One dollar per barrel of oil produced, and its equivalent for coal and gas – an amount easily lost in the monthly volatility of prices – could finance both the loss and damage fund and rebates for the poorest consumers. There are enforcement mechanisms. Oil producers could be required to show they have paid the tax before their shipping insurance is legally enforceable. 

Knowledge that scalable solutions exist is vital because some use their absence to stall progress. However, what we do is not about the how, but how much it matters to us. G7 central bankers purchased $24 trillion of government bonds to stave off recession during COVID and the global financial crisis. It was unprecedented and heroic.

With hindsight, if they had bought bonds that financed climate mitigation, the recovery would have been stronger and quicker, and inflation – heavily driven by fossil fuels – would have been weaker. They would have saved the economy and progressed halfway to ending climate change and limiting loss and damage. Viable financing solutions exist. We have to decide to use them. 

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As the 26-member board held its first three-day meeting in Abu Dhabi this week, discussions centered on the administrative steps needed to get the fund up and running, and giving out money as soon as possible.

Selecting the host country for the board is a priority because only then will it be able to take up legal responsibility and enter into formal arrangements with the World Bank, which governments have asked to host the loss and damage fund “on an interim basis” despite the initial reluctance of developing countries.

The World Bank has until mid-June to confirm it is willing and able to take on this role. The decision rests largely on the bank’s ability to meet 11 conditions, including allowing developing-country governments and organisations working with vulnerable communities to receive money directly without going through intermediaries like multilateral development banks or UN agencies.

“Too many cooks”

Daniel Lund, a loss and damage board member from Fiji, said that overhead costs and management fees from multiple layers of middlemen swallow up a high proportion of development funding in general.

“For small island developing states, it is always too many cooks and not enough ingredients,” he told Climate Home. “A lack of direct access is a particularly unacceptable scenario when it comes to finance for addressing loss and damage because much of what we need to do is direct support [to] the individuals and communities that bear the burden [of climate change]”.

Southern Africa drought flags dilemma for loss and damage fund

Concerns have been fuelled by the World Bank’s lack of experience in working with direct access to communities in its other operations, climate finance experts said. But during the meeting in Abu Dhabi, the bank sought to provide reassurances, indicating its willingness to be flexible on this matter and find a solution.

Renaud Seligmann, the World Bank representative at the meeting, told board members the bank is looking into a model that would “break new ground” and that it is “prepared to innovate and design with you to make it work”.

Host selection fast-tracked

For the World Bank, a primary concern lies with the risks attached to giving money to hundreds of small entities that may have less strict compliance processes. For that reason, it wants the board of the loss and damage fund to take on legal responsibility in case funds are misused. And as that legal personality can only be obtained from the host country, the selection process is being fast-tracked.

Interested countries have until early June to submit their candidacy – Barbados, Antigua and Barbuda, Bahamas and the Philippines have already thrown their hats in the ring. The board is expected to make a final decision at the next board meeting scheduled for July 9-12.

The board is picking up the pace of its work after its first meeting was delayed by three months as a result of developed countries’ failure to appoint their members on time.

A person moves their belongings at a flooded residential complex following heavy rainfall, in Dubai, United Arab Emirates, April 18, 2024. REUTERS/Amr Alfiky

The board was forced to tackle logistical challenges on the final day when stormy weather in Abu Dhabi moved the deliberations online. Scientists have warned that the Arabian peninsula will suffer more heavy rain at 1.5C of global warming than it did in pre-industrial times, and recent floods in the neighbouring city of Dubai shut down the airport and caused major economic damage.

Lund said the progress made at the first meeting “in some respects was surprising”, but there is still a long way to go before money reaches climate-vulnerable communities. “We have clear instructions, but translating that blueprint into contracts, roles, policies, locations, jobs and structures is going to be a shared headache for all board members over the course of this year and beyond,” he added.

Civil society at the table

Civil society representatives argued there is a need to broaden the direct participation of frontline communities struggling with climate impacts in the fund’s operations. The first board meeting limited participation to two people per UN stakeholder group – some of which represent millions, even billions, of people – such as Indigenous Peoples, youth, and women and girls.

“This fund must be different to fulfill the expectation – people-centered, human rights-based, gender-responsive – from the start, with meaningful participation and engagement throughout,” said Liane Schalatek, associate director of the Heinrich Böll Foundation in Washington who attended the board meeting.

G7 offers tepid response to appeal for “bolder” climate action

“Board members all stressed the importance of civil society observer and communities engagement and welcomed it,” she added. “Now that verbal support needs to be operationalised, including through dedicated financial support.”

After sorting through all of its procedural matters, the board will start addressing thornier issues such as how to disburse money and how to fill its coffers with more cash. So far, it has garnered about $660 million in pledges.

While board members hope to have the fund’s structure in place by COP29 this November, it is not expected to start handing out money until 2025.

(Reporting by Matteo Civillini; editing by Joe Lo and Megan Rowling)

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Last month, from Bangladesh to Kenya to Washington DC, over 40,000 activists in nearly 20 countries hit the streets calling on banks, governments and financial institutions to “#FixTheFinance” pushing the planet to the brink. 

It’s clear that we can’t address the climate crisis unless we fix the finance flows that are failing the planet. When we know that we have hardly any time left to avoid runaway climate breakdown, it’s absurd that so much of the world’s money is still being poured into fuelling climate change, while barely any is going to the solutions. 

Let’s face it – the climate crisis is really about money, and our choices to use it and make it in really stupid ways.  

G7 offers tepid response to appeal for “bolder” climate action

Many of the world’s most powerful private banks are holding their Annual General Meetings over the next weeks. Banks like Barclays, HSBC and Citibank are pumping billions into fossil fuel expansion, knowing full well that their decisions directly lead to climate chaos and devastating local pollution, particularly for communities in Africa, Asia and Latin America. At their AGMs they will undoubtedly celebrate their profits, self-congratulate on miniscule policy tweaks, and try to ignore the clamour of climate criticism.   

ActionAid research last year showed that these banks are financing an astonishing amount of fossil-fuel and industrial agriculture activities in the Global South, causing land grabs, deforestation, water and soil pollution and loss of livelihoods – all compounding the injustice to communities also getting routinely hit by droughts, floods and cyclones thanks to climate change.  

HSBC, for example, is the largest European financer of fossil fuels and agribusiness in the Global South. Barclays is the largest European bank financier to fossil fuels around the world. And Citibank is the largest US financier of fossil fuels in the Global South. The banks have so much power, and so much culpability, much more than most people realise. But they want us to forget the fact that they are working hand in hand with, and profiting from, the industries that are wrecking the planet.  

The banks can actually turn off the taps. They can end the finance flows that are fuelling the climate crisis. So to avert catastrophic climate change, the fossil-financing banks must start saying no to the corporations destroying the planet.  

But it’s not only private finance that is flawed – public funds are being misused as well. Governments are using far more of their public funds to provide subsidies or tax breaks for fossil fuels and industrial agriculture corporations, than they are for climate action. This is ridiculous – it’s hurting the planet, and its hurting people.  

Public funds instead need to be redirected towards just transitions that address climate change and inequality.  

There is growing appetite for climate action. But this just isn’t yet matched by willingness to pay for it. Or even to stop profiting from climate destruction. 

COP29 finance goal

This year’s COP29 climate talks will be a critical test of rich countries’ commitment to securing a liveable planet. The world’s poorest countries are already bearing the spiralling costs of a warming planet. So far they have only received begrudging, tokenistic pennies from the rich polluting countries to help them cope. The offer of loans instead of grants in the name of climate finance is just rubbing salt into the wounds. 

If we want to unleash climate action on a scale to save the planet, rich countries at COP29 will need to agree a far more ambitious new climate finance goal based on grants, not loans. 

Because if we want to save our planet, we will actually need to cover the costs. 

Tensions rise over who will contribute to new climate finance goal

Last month the International Monetary Fund and the World Bank held their Spring meetings in Washington DC. These institutions are powerful symbols of the planet’s dysfunctional finance systems which urgently need fixing. The World Bank is financing fossil fuels yet being extremely secretive about it. The IMF is pushing climate-devastated countries deeper into debt that often requires further fossil extraction for repayment.

Even as they brand themselves as responsible channels for climate finance, the world’s most powerful financial institutions are pushing our planet to the brink. Their stated aim to get “bigger and better” really amounts to all-out push to get “bigger” but only token tweaks to get “better”.  The Spring meetings ended with business-as-usual backslapping. But if they were taking climate change and its consequences seriously, at the very least, the IMF and World Bank would stop financing fossil fuels and cancel the debts that are pushing climate-vulnerable countries into a vicious cycle.  

Will blossom of reform bear fruit? Spring Meetings leave too much to do

All of these finance flows need fixing. At the moment, the global financial system is better designed to escalate – rather than address – climate change, vulnerability and inequality. The activists, youth and frontline communities who filled the streets last month hope that their calls to stop financing destruction will be heard in the boardrooms and conferences on the other side of the world. 

They say that money talks. This is the year that the climate movement is going to make sure it listens.  

The post How to fix the finance flows that are pushing our planet to the brink appeared first on Climate Home News.

Imagine losing your home to catastrophic floods, your loved ones to unprecedented hurricanes, your livelihood to raging wildfires, or your ancestors’ graves to rising sea levels.  

Then, to add insult to injury, imagine losing your voice and rights in the very UN institution mandated to alleviate the costs of these climate-related harms for the hardest hit in communities such as yours.  

Technocrats talking about you, without you; decisions made – including, ironically, on participation and stakeholder engagement – while you have no meaningful say. Justice denied from the outset.   

This could be the dire reality when the new board of the Loss and Damage Fund (LDF) convenes for the first time in Abu Dhabi (UAE) next week (April 30 – May 2). Designed to provide long-awaited justice for those suffering the most from climate impacts, the fund risks failing right from the start by limiting access for those it claims to support. 

Expectations mount as loss and damage fund staggers to its feet

Those most affected by the climate crisis know all too well the losses and damages they are suffering and how to repair these harms. Their involvement in the LDF is essential not only for its effectiveness but for its legitimacy and for justice. Even more than any other, this fund needs to be driven by people, to respect their rights, and hear their voices. 

Let’s start with the basics: public participation and access to information are human rights. Accountability, transparency and participation in decision-making are the hallmarks of democratic governance – and their importance for the LDF’s ability to meet local needs and priorities cannot be overstated.  

These fundamental rights are rooted in the understanding that people should hold power over decisions that concern their lives and communities. Science and experience show that such participation also leads to more effective and sustainable outcomes. Getting participation right from the start is essential to the LDF’s legitimacy, equity, effectiveness and potential for transformative change.  

Sidelined in planning 

The LDF would not exist if it were not for the decades-long relentless calls for justice and affirmative action by communities, civil society and Indigenous Peoples, which escalated to an impossible-to-ignore volume over the last few years.  

Despite these loud calls, rightsholders’ representatives were sidelined during the fund’s planning stages last year. While a small group of countries in a Transitional Committee debated the fund’s scope and aims, civil society consistently had to put up a fight merely to be let into the room. 

And history is repeating itself. The LDF’s Governing Instrument (adopted at COP28) reinforces the need to support local communities and recognition of their participation. Yet the first board meeting limits participation to two people per UNFCCC stakeholder group – some of which represent millions, even billions, of people – such as Indigenous Peoples, youth, and women and girls.  

Such overly restrictive numbers do not allow for the representation of the diversity of voices, groups and organisations under the umbrellas of these groups, and will lead to the exclusion of critical voices. 

As donors dither, Indigenous funds seek to decolonise green finance

These limitations are in stark contrast with participation at another UN fund, the Green Climate Fund (GCF), which – while it still has a long way to go to enable effective participation – does not limit board meeting observer attendance either in number or by stakeholder groups. The GCF had a significantly higher attendance than the LDF at its first meetings.  

Restricted seating in the actual room will further limit direct interaction with LDF board members making the decisions. The claimed ‘space constraints’ behind the restrictions are particularly unconvincing, coming from a country that organised the biggest climate talks in history just a few months ago.  

Climate justice requires inclusion  

The LDF has the potential to set a new precedent for climate finance – one that values human dignity and amplifies the voices of its beneficiaries. This requires more than a token dialogue with a handful of stakeholders in the first meeting; it necessitates a broad, inclusive consultation process that genuinely influences the fund’s policies.  

By explicitly endorsing the principles of inclusion, non-discrimination, transparency, access to information, empowerment, collaboration, and accountability, and proactively enabling active participation at all stages – from designing board policies and assessing community-level needs to implementation and decision-making – the LDF could live up to expectations and deliver climate justice.  

Tensions rise over who will contribute to new climate finance goal

If the Board does not explicitly and meaningfully include the diverse voices of the rightsholders who are meant to be the LDF’s main beneficiaries, the fund risks becoming another bureaucratic relic, preserving the status quo of climate injustice.  

During its first meeting next week, the board has a chance to overcome business-as-usual, as decision-makers will discuss procedures for the participation of observers and stakeholders. It must radically choose to enable and support meaningful participation by the diverse range of groups involved.  

The time to act is now. At its inaugural meeting, the board must choose to champion transformative change and genuine justice, setting a course that will define the fund’s legacy. The lives and livelihoods of far too many are on the line.

The post Limiting frontline voices in the Loss and Damage Fund is a recipe for disaster appeared first on Climate Home News.

With spring in full bloom, the world’s finance ministers, development and financial leaders, and philanthropists met for the World Bank and International Monetary Fund (IMF) Spring Meetings in Washington, DC last week.  

In their midst, Brazil, the current president of the G20, insisted on a balanced focus between ending poverty and food insecurity and combating climate change. President Lula makes no secret of his desire for a new international financial architecture, designed for different challenges, in a different century with new emerging powers at the table. 

2023 was the year leaders agreed the current architecture was no longer fit for purpose. 2024 needs to be the year the IMF, multilateral development banks (MDBs), and their shareholders rapidly implement reforms and begin the process for increasing capital. 

In Washington, the presidents of the MDBs held their first-ever “summit” – a direct response to insistence by G20 leaders and expert groups that the system must work more effectively together as one, in addition to individual bank reforms. 

Since G20 leaders last September called for a better, bolder and bigger MDB system, and the World Bank responded with its own roadmap of reform, changes are underway, especially in areas where the MDB managements have authority. Where progress is less clear is on issues requiring their shareholders to take the lead.  

Peak COP? UN looks to shrink Baku and Belém climate summits

Last week, coalitions of countries met with private finance, think tanks, philanthropy and civil society to discuss the key problems of debt, reversals on global development goals and lagging climate action. The policy proposals on what to do are manifold, and there is a deep well of goodwill to help with the current system’s obvious failures. But all eyes must be on governments.  

In one gathering of finance ministers, IMF Managing Director Kristalina Georgieva boiled down the climate change to-do list to the two things only they can do: price carbon effectively and remove harmful subsidies in the fuel, food and fisheries sectors. So how do we move from rhetoric to action? 

Geopolitical pressure and debt distress 

We cannot ignore the worsening context. Wars in Ukraine and Israel-Gaza, and their costs, threaten progress. Famine and conflict are taking their toll in many other countries too. Climate impacts are severe and intensifying, with crippling extreme heat stretching across India and closing school systems from the Philippines to Sudan.  

Many countries are suffering from debt distress and many more are channeling all available funds to service their debt at the expense of basic services, a serious impediment to investing in their much-needed climate resilience. Even more countries are suffering a crisis of liquidity.  

Whether it’s debt, debt service, or liquidity, it’s a crisis. Yet, at the Spring Meetings, the crisis response still lacked urgency. 

Protesters gather outside the IMF and World Bank’s 2024 Spring Meeting in Washington D.C., on April 19, 2024. (Photo: Andrew Thomas/Sipa USA)

Debt rescheduling was called out by the World Bank chief economist as inadequate. The details of how MDBs can use reflows of Special Drawing Rights as hybrid capital continues to be debated by the very same countries that urge climate action, and who themselves face fiscal pressure on their development and climate budgets.  

While shareholders, creditors and the institutional leadership played pass the parcel, the finance ministers of Small Island Developing States (SIDS) – whose cumulative debt is around $40bn, and who have no tools to dig out of their growing indebtedness and climate crisis – were despairing. As the urgency of a lack of inclusion coupled with climate stress grows, is it time not to tweak the system but to break it in places? 

For example, we could write off the debt of SIDS, while we begin new resource mobilization schemes from targeted forms of taxation to moral payments. If SIDS could face their short-term and existential challenges on a sounder footing, the international system could then expedite work on the problems of the next groups of vulnerable countries to mobilise investment in their resilience at scale.

Global billionaires tax to fight climate change, hunger rises up political agenda

To underline the bind countries find themselves in, during the time that MDB reform has become mainstream and Mia Mottley of Barbados and other leaders from emerging market and developing economies have called for a system reset under the banner of the Bridgetown Initiative, net flows of finance away from emerging and developing economies have grown. 

If we were grading reform mid-terms, we would be looking at Bs for management making in-roads on better and bolder, but an F for shareholders stuck on the bigger. How do they get straight As by the end of the year? 

IMF and World Bank at a crossroads 

First, we need radical collaboration among MDBs and between MDBs and development finance institutions, national development banks and private finance on the processes needed to get loans and guarantees disbursed faster. Some MDBs have moved to cooperate on procurement, and there are many suggestions on how to make country platforms work. But radical collaboration involves much deeper streamlining, due diligence, term sheets, analysis, talent, and pooled capital.  

Second, pressure must now be focused on the MDBs’ major shareholders: the G7, other OECD countries and the G20. While they work out how to mobilize more funds and endorse a US proposal for a framework for capital increases, there is room to de-fragment the many pockets of resources stuck in trust funds and facilities with too many strings attached to scale their impact. 

As donors dither, Indigenous funds seek to decolonise green finance

Thirdly, we must preserve the collaboration within the MDBs that, despite growing tension, means that the US, China, Europe and other large emerging economies are working together and can zero in on solutions to debt, growth of carbon markets, the evolution of the trade system, harmful subsidy removal, and shifting the development and climate finance systems to a world where all development is supporting adaptation and resilience.  

Shareholders could start by strengthening the quality of governance and ensuring that the ambition leaders show when they meet at the G20 is echoed in the way MDB board members articulate interests. This would support management to act more boldly and thwart push-back against the reform agenda among senior officials. 

In their 80th anniversary year, the IMF, the World Bank, and their owners and borrowers, are at a crossroads. The analysis of the last two years has confirmed they are necessary institutions. Yet, if they are to retain their relevance – and not face competition from new institutions and capital pools as frustration at the system’s inertia grows – reform must go deeper and faster to rise to the challenges of tomorrow, starting today. 

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The finance ministers of Brazil and France pushed this week for a tax on US-dollar billionaires of at least 2% of their wealth each year, with the $250 billion it could raise going to tackle poverty, hunger and climate change.

Brazil’s Fernando Haddad and France’s Bruno Le Maire promoted their proposal at the Spring Meetings of the World Bank and International Monetary Fund (IMF) in Washington, alongside IMF head Kristalina Georgieva and Kenyan finance minister Njuguna Ndung’u.

“In a world where economic activities are increasingly transnational, we have to find new and creative ways to tax these activities [and] thus direct the revenues to common global endeavours such as ending hunger and poverty and fighting climate change,” said Haddad.

He called on world leaders to show “political courage”, embrace “innovative solutions based on evidence” and give their people “hope”. “Without courage, there’s no good politics that can be done,” he said.

Speaking next at a briefing in Washington, Le Maire said overhauling the taxation system was “a matter of efficiency and a matter of justice”, and that a levy on the super-rich should follow already-agreed measures for a digital tax and global minimum corporation tax. “Everybody has to pay his fair share of taxation,” he added.

Canadian minister vows to fight attempts to weaken plastic pollution treaty

French economist Gabriel Zucman is drawing up a proposal for a billionaires tax that will be presented to G20 finance ministers and central bankers when they meet in the Brazilian city of Rio De Janeiro in July.

Haddad, whose government will host that meeting as G20 chair, said he wanted the Group of 20 big economies to issue a statement of support. Le Maire said he hoped the wealth tax would be in place by 2027, ten years after reform of the international taxation system began.

But at a separate press conference in Washington this week, Germany’s finance minister Christian Lindner rejected the proposal. “We do not think it is suitable,” he said. “We have an appropriate taxation of income.” Lindner is from the free-market Free Democratic Party, part of Germany’s governing coalition with the centre-left and Greens.

Who will spend it?

Zucman said not all countries needed to agree to a measure for it to be implemented. If some countries don’t tax billionaires, others can tax them more to make up for it, he said, adding that is how the global minimum corporation tax rate of 15% – which went into effect this year – works.

While Haddad spoke of tackling hunger and climate change, it is not yet clear who would be in charge of spending the money raised from billionaires or what it would be spent on.

Esther Duflo in 2009 (Photos: PopTech)

Esther Duflo, another French economist who addressed G20 ministers this week, told journalists the money should be given to developing countries to deal with climate change.

The best use, she said, is for the money to go to poor people before a climate shock like a heatwave hits, for their communities to protect them through measures like air-conditioned public spaces, and to governments for reinsurance against climate disasters.

From academia to politics

A billionaires tax has long been pushed by progressive economists like Zucman and Joseph Stiglitz. But it has been taken from academia onto the political agenda by the G20 presidency of Brazil’s left-wing government led by President Luiz Inácio Lula da Silva and Haddad.

Zucman presented the proposal at a G20 finance ministers meeting in  Sao Paulo in February. It was the “first time these issues of inequality, progressive taxation [and] extreme wealth concentration were discussed in such a forum”, he said, adding that the “vast majority praised Brazil for putting those issues on the agenda”.

The main barrier, he said, is that billionaires will fight back against it. “They have a particular hatred for any kind of tax based on wealth. Why? Because that’s the one tax that really works for them,” he said.

Gabriel Zucman speaks at the World Economic Forum in Davos last year (Photos: World Economic Forum)

But E3G analyst Sima Kammourieh, a former economic adviser to the French government, was more pessimistic about the prospect of a billionaires tax being implemented. She “wouldn’t completely rule it out, but it’s something which could take many many years to come to fruition”, she said.

Although Zucman insisted the tax could go ahead without the US on board, Kammourieh warned that a Donald Trump victory in the US elections in November would be damaging. Joe Biden has called for higher taxes on billionaires, while Trump is one of the world’s nearly 3,000 billionaires.

Elsewhere at the Spring Meetings in Washington this week, France, Kenya and Barbados launched a taskforce to examine how to fill the gap in climate finance for developing and vulnerable countries – excluding China – which will need investment of $2.4 trillion per year by 2030, according to economists Vera Songwe and Nicholas Stern.

The taskforce will consider taxes on wealthy people, plane tickets, financial transactions, shipping fuel, fossil fuel production and fossil fuel firms’ windfall profits. It will also mull redirecting state fossil fuel subsidies to a new global loss and damage fund and windfall taxes on fossil fuel producers when prices are exceptionally high.

The plan is for one or more proposals to be presented to governments with the aim of securing international agreement at the COP30 UN climate summit in Brazil in late 2025.

(Reporting by Joe Lo; editing by Megan Rowling)

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Now frustrated Indigenous rights groups are trying a new tactic to speed up change: creating their own funds in a push to boost the flow of money to frontline communities and shift away from what some see as an outdated colonial-style model driven by donors in the Global North. 

Since 2020 – and especially last year – more than half a dozen new Indigenous-led funds have sprung up, largely in forest-rich Brazil but also in developing countries from Indonesia to Mexico.  

Many are still in a start-up phase, but a few have already begun pushing money to frontline communities. They include the Mesoamerican Territorial Fund (MTF), which invested $1.3 million in 32 projects – from chocolate production to tourism and protecting traditional knowledge – in communities from Mexico to Panama last year. 

“We are aiming not only to make the funds reach the real guardians of the forest and the real guardians of mitigating and adapting to climate change, but also to support sustainability, democracy and good governance of all these territories,” said María Pía Hernández, a lawyer and regional manager for the MTF. 

World Bank climate funding greens African hotels while fishermen sink

Multilateral funds can take years to approve projects and often struggle to funnel big pots of nature and climate finance into the smaller-scale projects communities need, Indigenous leaders said.  

The new funds aim to fill the gap by gathering large amounts of money, distributing it nimbly and leap-frogging the barriers faced by forest communities in dealing with traditional funds, such as onerous paperwork. 

“We aim to improve not just the condition of the territories and people who live there but also promote global climatic justice,” Hernández said on the sidelines of last week’s Skoll World Forum, a gathering of social innovators.  

Bypassing the giants 

As the World Bank and International Monetary Fund hold their Spring Meetings in Washington this week, focused in part on reshaping lending for climate action, Indigenous communities are already rethinking how to better access the resources they need to protect nature and the climate – and to ensure those on the frontline benefit from changes such as new clean energy infrastructure. 

Along the way, they are setting up new rules and structures in line with their own traditions and beliefs, after years of chafing against constraints imposed by big donors, some of them former colonial powers. 

Fossil fuel debts are illegitimate and must be cancelled

In Canada, for instance, many Indigenous governing bodies now run their own renewable energy utilities, providing a fifth of Canada’s renewables, said Joan Carling, executive director of Indigenous Peoples Rights International. 

“If we transform the business-as-usual and create the enabling environment and conditions to put Indigenous people at the centre of this, then we can have a truly just, equitable renewable energy for all,” she said. 

A new dashboard released last week by the Rights and Resources Initiative and the Rainforest Foundation Norway shows climate finance for indigenous and local communities rose between 2020 and 2023 to about $517 million per year, a 36 percent increase over the previous four years. 

That increase comes after governments and charitable donors promised $1.7 billion back in 2021 to Indigenous and local communities by 2025 for their role in protecting land and forests, which are considered key to protecting both the climate and biodiversity. 

Yet with much new funding still moving through big international environment organisations and other intermediary agencies, rather than directly to communities, “there is no evidence yet indicating a systematic change in funding modalities,” the groups noted in a report.

Connecting communities with cash 

Solange Bandiaky-Badji, coordinator of the Rights and Resources Initiative, said improving direct access to funding is the key issue. At least $10 billion in finance for Indigenous and local communities will be needed to meet a global pledge to protect at least 30 percent of the planet’s land and oceans by 2030, she added. 

Indigenous-led funds believe they can be pivotal to achieving that ramp-up. 

Shandia, established by the Global Alliance of Territorial Communities uniting 35 million people from 24 countries, is still in a start-up phase but aims to serve as a conduit for much larger-scale finance to Indigenous and other frontline groups. 

“Millions of dollars are moving in the world. We want to connect claims on the ground to those millions,” said Juan Carlos Jintiach, a Shuar indigenous leader from Ecuador and the alliance’s executive secretary, who was shortlisted for the Nobel Peace Prize last year for his work on behalf of Indigenous communities. 

Indonesia’s main Indigenous alliance similarly in 2023 helped establish the Nusantara Fund, while in Brazil a range of Indigenous-led vehicles, including the Podáali Indigenous Amazonian Fund, were launched last year.

Guardians of the forest – and finance?  

Anthony Bebbington, who runs the Ford Foundation’s international natural resources and change change programmes, said the last few years had seen the emergence of substantial new funds, with the potential to grow, that are challenging the traditional ways donors have worked.  

“Funds are saying to us, ‘If you trust us to be guardians of the forest – a role for which we are often harassed and sometimes killed – then there is no justification for you to also not trust us to be guardians of the finance’,” he told an event on the sidelines of the Skoll World Forum. 

In projects backed by the Mesoamerican Territorial Fund, for instance, indicators of success are changing from a simple focus on hectares of forest replanted to include things like whether more water is flowing through key rivers, said Hernández, whose fund so far gets 80 percent of its support from philanthropies. 

An Indigenous Ramas man lifts a crayfish trap in the Rio Indio river, San Juan de Nicaragua, Nicaragua on February 16, 2022.(Photo: Reuters/Antoine Boureau/Hans Lucas)

The MTF also actively seeks out and helps prepare applications from Indigenous and local communities that could benefit from its support rather than just accepting grant proposals, as traditional donors often do.  

David Rothschild, senior director of partnerships for Nia Tero, a US non-profit that works with Indigenous groups, said avoiding heavy paperwork was key to enabling the new funds take off. 

“What they don’t want is to become another entity in the system operating in a colonial way. How do they not fall into the same patterns that have been destructive, while still reporting to donors?” he asked. 

Hernández said new ways of working are developing, if sometimes too slowly. “We are not asking for blank cheques,” she emphasised. “But we deserve a little bit of consideration.”

(Reporting by Laurie Goering; editing by Megan Rowling)

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Just a few kilometres further south, however, local fishermen in Mbour, the country’s second-largest fishing port, are struggling. The beaches where they keep their boats are being progressively eaten away by rising seas that also threaten their homes.

The stark contrast between the neighbouring coastal areas highlights how global funding for climate projects – largely taxpayers’ money from rich countries – often fails to help those shouldering the burden of warming impacts, especially when it is being used to mobilise more private investment for green aims.

“They prioritise Saly because the hotels are wealthy,” said Saliou Diouf, a retired fisherman who lost his house in Mbour to encroaching waves. “The World Bank should help the most vulnerable.” 

Map showing the location of the neighbouring communities of Saly and Mbour on Senegal’s coast (Graphic: Fanis Kollias)

Le Lamantin is one of a dozen upscale hotels in sub-Saharan Africa acquired by Mauritius-based Kasada Hospitality Fund LP – whose investors are Qatar’s sovereign wealth fund and multinational hotel giant Accor – which it is revamping in accordance with EDGE, a green building certification created by the World Bank.

Kasada was granted over $190 million in guarantees by the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA), and loans of up to $160 million by its private-sector lender, the International Finance Corporation, to help it snap up hotels across Kenya, Nigeria, Ivory Coast, Rwanda, Namibia and Senegal, and spruce them up as Accor brands like Mövenpick.

The Mövenpick Resort Lamantin Saly, where a standard hotel room costs about £220 a night (Photo: Jack Thompson)

MIGA, the little-known insurance arm of the World Bank Group, has counted its backing for the hotels as part of its climate efforts for the past three years, according to annual sustainability reports.

The five-star resort in the West African nation of Senegal, where rooms cost at least £220 a night ($270), is being refurbished to consume at least 20% less energy and water than other comparable buildings by its owner Kasada, which expects it to obtain EDGE certification this year.

Teresa Anderson, global lead on climate justice for ActionAid International, told Climate Home it is “shocking that what little funds there are for climate action are benefiting luxury hotels”.

 

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Una publicación compartida de Mövenpick Resort Lamantin Saly (@movenpicklamantinsaly)

“Climate finance must be used to help those most vulnerable – not to help the world’s wealthiest add a climate hashtag to their Instagram posts by the pool,” she said.

MIGA told Climate Home its support for Kasada is primarily aimed at developing Senegal’s tourism sector and creating jobs, adding that refurbishing hotels can also have beneficial climate impacts and play an important role in decarbonising the hospitality industry.

Mbour, just a few miles from the pristine beaches of Saly, is the second-largest fishing hub in Senegal with 11,000 fishers. (Photo: Jack Thompson)

‘The money is missing’

In nearby Mbour, however, the fishing community feels left behind.

“I was born here, I grew up here – when I was a child, the sea only came up to the last pole,” Diouf told Climate Home, pointing to the remnants of a Portuguese-built pontoon used to moor colonial ships in the 1800s. 

In just one generation, he said, the sea has gobbled up more than 100 metres of beach in Mbour, forcing 30 families to abandon their houses and threatening hundreds more. A quarter of the Senegalese coastline – home to 60% of the population – is at high risk of erosion.

Mbour’s fast-disappearing shore is a crisis for its 11,000 fishers as big swells destroy their boats, crammed into the remaining patch of sand.

But in Saly, it’s a different story. Here, between 2017 and 2022, under a separate project, the World Bank invested $74 million in beach protection, building 19 stone walls, groynes and breakwaters to reclaim 8-9 kilometres of hotel-lined beachfront, popular with tourists.

The World Bank Group said the project helped preserve around 15,000 direct and indirect jobs by saving tourism infrastructure, while also protecting two fishing villages in Saly.

Satellite data shows the changing coastline in Saly (north), where protective infrastructure was developed, and Mbour (south), which has none. (Photo: Modified Copernicus Sentinel data [2024]/Sentinel Hub)

The World Bank Group (WBG) said its units work together to avoid trade-offs. “It’s not to either support hotels and the tourism sector as a driver of development, or to enhance the resilience of local communities – the WBG does both,” it said in a written response to Climate Home.

But fishermen in Mbour – which was outside the scope of the Saly coastal protection infrastructure project – are not benefiting from that approach, and even say the works in Saly have exacerbated erosion in their area. The Mbour artisanal fisheries council has devised a climate adaptation strategy to address the problem. 

One of its coordinators, Moustapha Senghor, said seawalls and breakwaters are needed, but there are no funds for what would amount to “a colossal investment”. “We know exactly what we need to do, but the money is missing,” he said.

Sea level rise is threatening beach-side homes and swallowing coconut trees that protect the coastline in Mbour, Senegal. (Photo: Jack Thompson)

Private-sector trillions

Governments and climate justice activists are putting pressure on the World Bank to significantly step up its role in funding climate projects, especially to help the most vulnerable countries and communities. 

For the past three years, a group of countries led by Barbados’ Prime Minister Mia Mottley has called for reforms so that the bank can better address climate change.

At the same time, wealthy nations have been reluctant to inject more capital into its coffers, while attempts at tinkering with the balance sheet to squeeze out more climate cash only go so far. 

For World Bank Group President Ajay Banga, the real solution lies in greater private-sector involvement, using scarce public money as a lever to help mobilise huge dollar sums for climate and development goals this decade.

“We know that governments and multilateral institutions and philanthropies all working together will still fall short of providing the trillions that we will require annually for climate, for fragility, for inequality in the world. We therefore need the private sector,” Banga told media ahead of this week’s annual Spring Meetings of the World Bank and the International Monetary Fund.

MIGA’s guarantees can be a key driver of climate investments in developing countries. (Graphic: Fanis Kollias)

Following suggestions from a group of CEOs convened by Banga, the World Bank Group announced in February a major overhaul of its guarantee business to enable “improved access and faster execution”. The goal is to triple issuances, including those from MIGA, to $20 billion by 2030, with a significant proportion of that expected to support green projects.

MIGA – as a provider of guarantees aimed at encouraging private capital into developing countries – may not be the obvious choice to help low-income communities like Mbour’s fishers. 

But, in its 2023 sustainability report, the agency wrote: “because the poorest are the most vulnerable to climate change, MIGA is working to mobilize more private finance to scale up climate adaptation, resilience and preparedness”.

Last year, less than one percent of MIGA’s total guarantees directly supported climate adaptation measures, according to its annual report.  

The guarantees generally act as a form of political risk insurance, making an investment less risky and giving companies access to cheaper loans as a result.

MIGA’s 2023 sustainability report showcases the Kasada-owned hotels as an example of its efforts to “rapidly ramp up” private capital for climate action, with the agency providing its highest volume of climate finance last year.

Struggle to fund adaptation

But some experts argue the World Bank Group should be targeting its efforts more closely on communities who are struggling to survive as global warming exacerbates extreme weather and rising seas. 

Vijaya Ramachandran, a director at the Breakthrough Institute, a California-based environmental research centre, said projects like the Kasada-backed hotels are “not where the dollars are best spent from a climate perspective”.

Ramachandran, a former World Bank economist, co-authored a study last year analysing the climate portfolio of the bank’s public-sector lending arms, which exclude MIGA. It found a lack of clarity over what constitutes a climate project and showed that hundreds of projects had been tagged as climate finance despite having little to do with emissions-reduction efforts or adaptation.

Ramachandran told Climate Home that, in the case of MIGA’s backing for the African hotels, Kasada “should just be doing the energy saving itself as part of its own efforts to address climate change”. 

Holidaymakers enjoy a spacious, ocean-side pool at the five-star Le Lamantin resort in Saly, Senegal. (Photo: Jack Thompson)

Olivier Granet and David Damiba, managing partners of Kasada Capital Management, told Climate Home the hotel investment fund had always planned to be “a leader in energy and water efficiency in its properties”. 

But, they added, the financial and technical support of MIGA and the IFC had helped them implement their strategy “further and more easily”, especially during the COVID-19 pandemic. Eight Kasada-owned hotels have already been certified under EDGE and the rest are expected to achieve the standard this year, they noted.

Ramachandran said making hotels energy-efficient is a good thing – “but from a public finance perspective, for poorer African countries the focus should be on adaptation and making them more resilient”.

Developing countries need an estimated $387 billion a year to carry out their current adaptation plans, but in 2021 they received only $24.6 billion in international adaptation finance, according to the latest figures published by the Organisation for Economic Co-operation and Development.

MIGA to miss climate target?

Once regarded by campaigners as the “World Bank’s dirtiest wing” for its support of fossil fuels, MIGA has come under mounting pressure to shift its subsidies in a greener direction, in line with broader institutional goals.

In response, the agency has committed to throw more of its financial weight behind projects that aim to cut greenhouse gas emissions or alleviate the impacts of climate change. 

In 2020, it revealed a plan to dedicate at least 35% of its guarantees to climate projects on average from fiscal year 2021 through 2025, embracing a target set by the wider World Bank Group. 

MIGA conceded at the time this would be “a challenge” – and it now looks likely to fall short of the goal. In 2023, climate finance represented 28% of its guaranteed investments.

According to the agency’s 2023 sustainability report, 31 out of 40 projects it supported with guarantees last year had a climate mitigation or adaptation component, but it did not disclose what percentage of each was counted as climate finance.

Meanwhile, over the last three years, MIGA has backed three gas-fired power plants in Mozambique and Bangladesh, while it is also planning to support an additional one in Togo. 

In monetary terms, MIGA’s annual provision of climate guarantees has risen from just over $1 billion in 2019 to $1.5 billion in 2023, pushing up the total size of its climate portfolio to $8.4 billion. But the headline numbers only paint a partial picture, clouded by a lack of transparency in the data.

MIGA’s portfolio of climate investments has grown in the past six years. (Photo: MIGA Climate Change)

In response to Climate Home’s request for a full list of MIGA’s climate projects, the agency said it could not disclose the information for confidentiality reasons. 

“Our clients are private-sector investors or financiers, and we do not have agreement to release disaggregated information about their investments and financing,” a MIGA spokesperson said.

The only clues about the make-up of MIGA’s climate portfolio come in its glossy annual sustainability reports, which highlight a handful of initiatives. 

Climate Home News reviewed these reports from the last three available years – 2021, 2022 and 2023 – and tracked highlighted projects, which are framed as positive examples of climate finance. 

Motorways and elite universities 

They show that support for renewable energy made up a quarter of MIGA’s climate guarantees in 2023. 

But its track record of climate investments raises questions about the agency’s criteria for designating projects as climate finance and how it allocates those resources to help people most in need, experts said. 

Karen Mathiasen, a former director of the multilateral development bank office in the US Treasury, said MIGA should not be using its resources to expand investment in things like luxury hotels and then counting them as climate finance. 

“There is a real problem in the World Bank Group with greenwashing,” added Mathiasen, who is now a project director with the Center for Global Development.

World Bank approves green reforms, appeals for more money

MIGA said it calculates the climate co-benefits from its projects using the same methodologies as other multilateral development banks, and applies them consistently according to a “rigorous internal consultation and review process”. 

Large infrastructure projects feature heavily in MIGA’s climate portfolio. 

For example, a group of international banks, including JP Morgan, Banco Santander and Credit Agricole, have received a total of €1.4 billion in guarantees to bankroll the construction of a new motorway in Serbia, in an area prone to severe flooding. 

The 112-km dual-carriageway, in the West Morava river valley, is implementing measures to reduce flood risk, including river regulation – and so was counted as climate finance.  

In 2022, MIGA’s largest climate guarantee – worth €570 million ($615 million) – helped finance the construction of a new campus in Morocco’s capital Rabat for the Mohammed VI Polytechnic, a private university owned by mining and fertiliser company OCP Group and frequented by the country’s elite.

According to MIGA, the project would seek to obtain LEED (Leadership in Energy and Environmental Design) green-building certification “for key facilities”, and include hydraulic structures to enhance the climate resilience of the campus.

Similarly, support for a new hospital in Gaziantep, Turkey, was tagged as 100% climate finance because it features energy efficiency measures and flood drainage works. 

In 2023, just under half of MIGA’s climate guarantees went towards “greening” the financial sector in mainly middle-income countries like Argentina, Colombia, Hungary, Algeria and Botswana. 

These guarantees are intended to help local banks free up more capital and boost loans to climate projects, although in some cases they are only expected to do so on a “best effort basis” involving no strict obligation, according to MIGA’s annual reports.

MIGA said this clause is included for regulatory reasons and requires banks to “take all necessary actions to provide climate loan commitments” as far as is “commercially reasonable”.

UN climate chief calls for “quantum leap in climate finance”

Call for clarity 

Ramachandran of the Breakthrough Institute said MIGA should demonstrate the outcomes of its climate finance projects “in terms of reduced emissions or of improved resilience, (and) what the overarching strategy is to make sure the money is best spent”. 

“Instead the focus is simply on dollar amounts,” she added – a criticism rejected by the World Bank Group. 

MIGA said it supports projects in all sectors that contribute to development and enables the inclusion of emissions-cutting and climate adaptation measures in their design and operation. 

Former U.S. official Mathiasen believes MIGA could be a powerful engine to mobilise more private money for climate action, but said it needs a cultural change to focus more on results rather than numerical targets which give staff an incentive to “pump up the numbers”. 

“A little bit of an add-on – that is not a climate project. There needs to be clear, transparent criteria of what constitutes a climate project,” she said. 

(Reporting by Jack Thompson in Senegal and Matteo Civillini in London; additional reporting by Sebastian Rodriguez; editing by Megan Rowling, Sebastian Rodriguez and Joe Lo; graphics by Fanis Kollias)

This article was amended on April 17 to clarify that the Qatar Investment Authority and Accor are investors in the Kasada Hospitality Fund. It is run by Kasada Capital Management.

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But holding only countries accountable for the damage done to our planet lets other polluters, often much larger than some major economies, off the hook.

We have a unique opportunity to rethink the whole approach, and set an important precedent where a major emitting industry – for the first time ever – pays for its greenhouse gas (GHG) emissions at the global level.

This industry is international shipping, whose global climate regulator, the UN’s International Maritime Organization (IMO), is meeting on March 11-22 to negotiate on policies to achieve its climate commitments and cut GHG emissions from ships.

This includes putting a price on shipping emissions, which the IMO has agreed to adopt in 2025.

Pacific “mixed feelings” after compromise on shipping’s climate goals 

A multi-billion dollar sector powered by cheap fossil fuels, shipping has reached the point of emitting more pollution than all but the top five emitting countries worldwide. This is roughly the same amount as Germany or Japan in a year, and yet it remains almost tax-free.

Last year, the IMO reached a historic agreement to cut emissions 30% by 2030 and 80% by 2040, in order to reach net-zero by mid-century. This was in great part due to the valiant efforts of the Pacific Island delegations, who have for years now led the push for the highest ambition possible at the IMO.

Even though these targets fall short of what climate scientists say is necessary to limit global temperature rise to the Paris Agreement’s 1.5°C goal, it is in of itself the first deal of its kind. If achieved, it will help avoid over 10 billion tonnes of emissions cumulatively from now to 2050.

Polluters must pay their fair share

A growing number of governments and industry players back putting a price on international shipping emissions, so that polluters pay their fair share for the transition through a levy.

But the devil is in the details, and all eyes must be on the IMO, where the final decisions will be taken.

A well-designed levy will speed up the phase out of GHG emissions, help close the price gap between fossil and sustainable alternative fuels, and send a strong market signal to move towards zero emission solutions. But this must be done in a way that is just and equitable,  particularly for those in the developing countries most impacted by the climate crisis.

Dozens of oil & industry lobbyists attended secretive shipping emissions talks

Crucially, a good levy will also generate significant revenues – between $1 trillion to $3.7 trillion could be raised by 2050. As called for by the Pacific islands at IMO, and supported by analysis from the World Bank, these funds ought to be allocated first and foremost towards supporting climate-vulnerable countries.

These revenues are new and additional, and completely separate from developed countries’ climate finance commitments negotiated at the COP summits. This is of paramount importance – otherwise we would be shifting the historic responsibility for climate change from developed countries, and their commitments under the UN climate convention, to industry.

These are two completely distinct and independent sources of funding.

The push for an ambitious levy

There are several levy proposals the IMO can choose from. The most ambitious one – which could secure a just and equitable transition – is a levy put forward by Belize, Fiji, Kiribati, the Marshall Islands, Nauru, the Solomon Islands, Tonga, Tuvalu and Vanuatu of $150/tonne of greenhouse emissions. A significant part of the revenues from this levy would go towards helping climate-vulnerable poorer countries fund shipping’s renewable energy transition, compensate for any rise in transport costs, and adapt to climate change.

The European Union has also recently reiterated its support for pricing GHG emissions, but is yet to support any specific proposal on the table. As the biggest negotiating bloc at the IMO, it is absolutely crucial that EU member states support a truly ambitious proposal, such as the one put forward by the Pacific Islands and Belize. Not doing so risks allowing momentum to grow around proposals that do not live up to the level of ambition we need at the IMO.

Other proposals currently on the table pose serious risks of incentivising the use of fossil fuels, such as LNG, and do not prioritise funds to support climate-vulnerable countries, which stand to lose the most from this transition without the right supportive measures in place.

We are at a crossroads – not just when it comes to shipping‘s climate action but also the way countries approach new and additional financial flows, and the March talks need to lead us in the right direction.

I urge governments not to miss this important opportunity, and make their voice heard at the IMO in support of an ambitious levy, such as the Pacific and Belize proposal, to get ships off fossil fuels and secure a globally just and equitable transition that leaves no country behind.

Ana Laranjeira is senior international shipping policy manager with Opportunity Green, an NGO working to unlock the opportunities from tackling climate change using law, economics, and policy. Since 2022, Opportunity Green has been working bilaterally with a number of ambitious climate-vulnerable IMO Member States towards building their capacity to actively participate in negotiations.

The post How to hold shipping financially accountable for its climate impacts appeared first on Climate Home News.

Last year ended with a historic outcome. After more than 30 years, the UN climate negotiations finally identified the core driver of the crisis – fossil fuels – and set out a series of steps to phase them out, which will require significant investment.

How significant? The high-level expert group on climate finance estimates that developing countries (excluding China) need $2.4 trillion annually in climate investment by 2030. Not an easy feat.

Renewables are the cheapest form of electricity generation in the majority of countries. They are projected to become even more affordable, as technology advancements and economies of scale drive down costs.

Witness bribing minister’s family own Congolese carbon credit company

They also offer greater price stability since they don’t rely on fuel purchases. However, the upfront capital investment needed is often higher than for fossil power plants. For many countries where market interest rates exceed 10 percent, this puts clean energy ambitions out of reach.

On top of this, mounting climate impacts are hitting the poorest and most vulnerable communities around the world. The cruel injustice of the climate crisis is that those who did the least to cause the problem are hit first and worst by its impacts, and have the least capacity to invest in their resilience.

New finance foundations

We know what needs to be delivered at Cop29 in Azerbaijan: all the way back in 2015 governments agreed to set a new climate finance goal, beyond the existing $100 billion per year target, before 2025.

But there are three foundations governments need to lay this year that can actually make an ambitious goal achievable: reforming multilateral development banks, addressing debt, and initiating innovative taxation.

Let’s start with the oldest of the multilateral development banks (MDBs). The World Bank turns 80 this year and is notorious for its overbearing and cumbersome bureaucracy.

Germany and US warn Brazil against using Amazon Fund to pave rainforest road

MDBs were created to provide financing to countries on more favourable terms than the market to invest in development, but have grown long in the tooth.

The ideas for what needs to change are all there: fully aligning with the Paris Agreement’s goals by ending financing for fossil fuels; reforming their blunt eligibility rules to allow middle-income countries to access cheaper financing for climate projects; and raising more capital through both conventional—government contributions and bond issuances—and unconventional means, such as rechanneling IMF Special Drawing Rights.

Debt debates

On debt, governments have finally recognised the link between countries’ fiscal space and their ability to undertake climate action, and emphasised the importance of low-cost financing to address this. The pandemic has turbocharged a sovereign debt crisis that was already brewing before 2020. The IMF has warned that 60 percent of low-income countries and 25 percent of emerging markets are in or near debt distress.

Underlying these countries’ fiscal situations are the fingerprints of climate change. Many developing countries face a climate investment trap: existing debts and high interest rates make it costly to borrow to invest in climate mitigation and adaptation.

As a result, they are more vulnerable when disasters hit, meaning higher recovery costs and a hit to credit ratings, making future investments even more expensive.

The United Nations Environment Programme estimates that climate change has raised average borrowing costs for vulnerable countries by 117 basis points, equating to an extra $40 billion in interest payments over the past decade. Countries need a way to break out of the climate investment trap if the world is to meet its climate goals.

“A la carte menu”: Saudi minister claims Cop28 fossil fuel agreement is only optional

The current multilateral process for dealing with sovereign debt, the G20 Common Framework, is not delivering; as a piecemeal approach, it is neither common nor a framework. Major economies in the G20 need to acknowledge this and develop a new fit-for-purpose strategy for dealing with debt.

A promising new initiative launched at Cop28 was the Expert Review on Debt, Nature and Climate. Led by Presidents Macron of France, Petro of Colombia and Ruto of Kenya, the review will bring together leading experts to independently examine how sovereign debt can hinder climate ambition and explore solutions.

Once debt crises are addressed, more sustainable financing options must be made available for countries, otherwise they are likely to fall back into crisis. Providers of climate finance must ensure that their finance is structured to best address country and project needs.

Too often it is the other way around: due to political constraints, contributors have preferences for debt-creating instruments and try to shape climate projects to fit these in ways that may not deliver the biggest benefits for people or the planet.

New taxes

Lastly, the most controversial words in a major election year are going to be unavoidable: new taxes. We know that current government contributions to climate funds have been a drop in the ocean until now.

Getting polluters to pay the costs of their actions—such as taxing the fossil fuel industry’s $4 trillion-a-year profits, a levy on the emissions of the shipping industry, and surcharges on business and first-class flights—offer much more equitable ways of raising revenues to finance the response to climate change.

Antigua and Barbuda, Barbados, France, Kenya and Spain have already come together to set up a Taskforce on International Taxation that will look into these and other measures and agree on specific proposals for raising additional climate finance by Cop30.

Progress on all of these fronts is essential to lay the groundwork for a successful finance outcome at Cop29. We have to learn from history: setting climate finance goals without the revenues and systems to deliver on them is a recipe for disappointment. This time must be different.

The post High stakes for climate finance in 2024 appeared first on Climate Home News.

The claim made by the Organisation for Economic Co-operation and Development (OECD), which carries out an annual assessment of the pledge, is based “on preliminary and as yet unverified data” that has not been made public.

Detailed figures have been made available for 2021, when developed nations gave $89.6 billion to developing countries – a slight increase from the amount of money provided the previous year.

“Symbolic” milestone

The figures pale in comparison with the trillions of dollars that vulnerable nations are estimated to need to cut emissions and better cope with the effects of climate change. But the “symbolic” $100 billion commitment, first made in 2009 in Copenhagen, has been a continuous source of diplomatic tensions since countries failed to hit the target by the 2020 deadline.

Germany’s climate minister Jennifer Morgan told reporters she hoped this sends “a reassuring signal to our partners”.

“It is a target that we had hoped to meet earlier”, she added. “We hope that this is a foundation to perhaps build some confidence in our commitment to work together with developing countries moving forward”.

Adaptation money falls

Despite the overall increase, specific funding for adaptation declined by $4 billion to $24.6 billion. The setback casts doubts over whether developed countries will be able to meet a pledge made at Cop26 to double their provision of adaptation finance to $40.6 billion by 2025.

Poor countries heavily rely on international public finance for things like early warning systems, flood barriers or drought-resistant agriculture that are less attractive to investors than renewables.

“We have seen a reduction in finance and a stalling of flows for adaptation initiatives,” UNEP’s chief scientist Dr. Andrea Hinwood told Climate Home earlier this month. “We really must act now. It’s only with fast, urgent, consolidated action with appropriate finance flows that we have a chance to address those issues.”

Loans fuel debt fears

Vulnerable countries have long called for a significant increase in the provision of grants over loans, which they argue push them further into debt. But loans continued to represent over two-thirds of the money provided in 2021, with grants making up 30% of the total.

Harjeet Singh, Climate Action Network’s head of global political strategy, said the prevalence of loans exacerbates financial disparities. “It is imperative that rich countries radically shift their approach, focusing on providing substantive support rather than resorting to symbolic gestures”, he added.

France, Kenya set to launch Cop28 coalition for global taxes to fund climate action

Canada’s climate minister Steven Guilbeault recognised more needs to be done, saying the $100 billion goal is “an important milestone, but it does not solve all of our problems”.

“We know the conversation needs to shift from mobilizing a hundred billion dollars to mobilizing 10-15 times that. That’s what our collective challenge is”, he added.

UK aid cuts leave Malawi vulnerable to droughts and cyclones

With significantly more money unlikely to be dished out of public purses, rich countries are increasingly looking at alternative solutions. Alongside reforms of multilateral development banks, like the World Bank, big hopes are pinned on contributions from the private sector.

But the latest OECD data risks dampening some of that enthusiasm. Private capital mobilised through public incentives, such as guarantees, has broadly stagnated since 2017, with only $14.4 billion made available to developing countries last year.

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And they matter in domestic politics too, as we found out when a hostile Republican Congressman asked US climate envoy John Kerry yesterday if he was “planning to commit America to climate reparations”.

Before the Republican could finish his sentence, Kerry had shot back “no, definitely not” and asked him to put an exclamation mark beside the answer.

That pleased the Trumpian congressman from Florida but it angered many climate campaigners, after it was reported in some quarters as a refusal to pay into the new loss and damage fund, which the US had reluctantly agreed not to block at Cop27.

But that’s not how it was interpreted by Avinash Persaud, Barbados’s representative on the loss and damage transitional committee, and the veteran, Washington-literate climate campaigner Alden Meyer.

The word “reparations” implies liability and links climate rhetorically to slavery, Meyer said. It was a political trap that Kerry’s been around long enough not to fall into.

A friendly Democrat later asked Kerry about his goals for Cop28 and one of them was the creation of a loss and damage fund.

But historically, the US has been the main blocker not just of “climate reparations” but of loss and damage – and nobody has been more personally associated with that than John Kerry.

Whether it’s now the word he objects to or the principle, we’ll find out when the time comes for rich governments to make their loss and damage pledges, which campaigners are calling for at Cop28.

This week’s news:

• Kerry rejects “climate reparations” but praises loss and damage fund
• UAE’s Cop28 president plans “brutally honest” climate summit
• EU to push for fossil fuel phaseout ‘well ahead of 2050’ at Cop28
• Canada pledges US$340m to UN’s Green Climate Fund
• IEA celebrates energy transition minerals investment, as fears of shortage lessen
• After “sleepless nights”, governments strike deal on Green Climate Fund strategy
• Green Climate Fund backs scheme financing farming corporations accused of destroying forests
• ‘Historic milestone’: Ecuador nears vote to keep Amazon oil in the ground

…and comment:

• With corporate climate cheats on the chopping block, net zero is growing up
• The EU lacks ambition on Cop28 renewable targets

And domestic politics impinges on climate finance north of the US border too. Announcing an allocation to the Green Climate Fund (GCF) on Wednesday, Canada’s climate minister came close to doing what all rich country climate ministers must long to do: blame their finance minister for an underwhelming climate finance pledge.

After announcing the US$340m over four years pledge, former Greenpeace activist Steven Guilbeault said: “Would I like Canada to put even more money on the table? I’m the environment and climate change minister, not the finance minister unfortunately. But I think we can always do better”.

Still, the GCF had a busy week approving millions of dollars in new climate change projects and gavelled a new 2024-2027 strategy.

But that didn’t kept the fund from making some controversial decisions. The GCF also approved a $190 million project for a Dutch investment fund with a history of financing deforestation in the Brazilian Amazon. The project “is paying the polluters instead of having them pay,” one campaigner said.

The post What’s in a word? – Climate Weekly appeared first on Climate Home News.

The Glasgow highpoint of our climate leadership has long since faded. So too have the heady days of the 2022 Conservative Party leadership elections, in which most candidates were content at least to hold the line on UK climate ambition, internationally and at home.

Our climate news now, insofar as it exists, is some combination of domestic nimby-ism, diplomatic disinterest, and new drilling.

Personally, I left the Cop26 President’s private office, where I worked as a speechwriter and private secretary, to continue the work from outside government at one of the UK’s largest philanthropic foundations.

Developing nations decry risk of UK breaking climate finance pledge

And it was my new role that took me to Paris last month, for the Macron-Mottley finance summit. More, of course, than can be said for the UK Prime Minister Rishi Sunak who choose instead to party with media mogul Rupert Murdoch.

The President of Kenya William Ruto has a reputation as an emerging voice on the international climate stage. That preceded him as he arrived at the Palais Brongniart in Paris.

So I was listening with interest as he spoke on what he believed to be the great collective failure in our attempts to tackle the climate crisis — our persistent belief that it could be done in a system built on national interest.

To paraphrase him, when global good competes with national interest, national interest wins before the morning’s out. In a somewhat indistinguishable flurry of panels and plenaries, it stuck out as a profound comment on our current state of play.

Governments set to fail to plot shipping industry course for 1.5C

But I think it’s worth all of us, and particularly those trying to make and influence climate policy in the UK, reflecting a little more on Ruto’s point.

At first glance, the current UK context seems to support the argument.

It would be an understatement to say that, in recent years, the going in the UK has got tough. My old thesis advisor, Adam Tooze, repopularised the idea of a global polycrisis.

And this has been felt keenly here in the UK in the interrelated cost of living and energy crises. What money the government has to spend overseas was first reduced in the face of domestic pressures, as the pandemic hit the economy, and has since been sucked towards Ukraine and the defence of democracy on not-so-distant shores.

Identifying loss and damage is tough – we need a pragmatic but science-based approach

Just, it seems, as Ruto warned. National interest winning before the morning is out.

A similar picture can be sketched across much of the Global North.

But I do not believe the UK’s stuttering leadership can truly be explained by Ruto’s global good versus national interest battle. The problem, instead, is a flawed and myopic understanding of one side of the equation.

We have to recognise that global climate leadership, backed by ambitious climate policy at home, is now fundamental to swathes of any governments agenda, whether in terms of geopolitical and diplomatic interests, security – economic and otherwise – or economics. The lines that could once be drawn between international policy and the domestic agenda, as far as I can see, no longer exist.

Threat of EU carbon tax prompts dubious “green aluminium” claims in Mozambique

In recognising this, it quickly follows that leadership on the global good of climate action is not in competition with national interest, it is central to it.

I saw this first-hand back when working for the Cop26 President, as we worked to drive forward the gains of the Glasgow Climate Pact and to build a coalition for ambitious and long-term climate action around the world.

I think back to one of the first working trips I joined having just started in the office. We spent three days in Turkiye, first spending a day a few hours’ drive from Ankara, visiting one of the world’s largest solar farms, before returning to the political capital to work with ministers and the First Lady, in support of their climate agenda.

Morocco’s centuries-old irrigation system under threat from climate change

From a position of serious climate credibility and a solid offer of support, relationships were deepened and connections were created.

There was a palpable level of trust running through each of the Cop President’s interactions. That not only moved our collective climate agenda forward, but also unlocked opportunities for UK renewable energy suppliers and manufacturers.

It also strengthened our Embassy’s position from which to engage across the whole suite of the UK-Turkiye agenda, including the tackling of cross-border crime. It was a trip in which global goods and national interests, on both sides, fit neatly hand in hand.

A few months later we were in Viet Nam, as the Cop26 President lent his support to the team of officials working to complete the final stages of negotiation on Viet Nam’s just energy transition partnership (JETP) – the deal whereby developed countries helped to finance the clean energy transition.

Our meeting with the Vietnamese Prime Minister, which was over an hour long and punctuated by three separate and warm embraces between the two politicians, similarly demonstrated the interaction of global climate cooperation and interests elsewhere.

Senegal shows African countries are not passive beneficiaries of climate finance

Of course each of the conversations on the JETP were ostensibly about coal and the energy transition. But they were equally, if oftentimes implicitly, laying the foundations for deep and continued cooperation on finance, manufacturing and the global value chain, and technical and policy exchange. It would perhaps be stating the obvious to underscore the importance of the UK and its friends on the JETP partner group – particularly the EU and G7 – having a strong and constructive presence in that particular region.

And then there were the multilateral fora. From the G20 to the United Nations General Assembly, and the World Bank and International Monetary Fund’s Annual Meetings to Cop27. At so many of the critical junctures and decision-points in each of these moments, I observed that it was the UK and the Cop26 President to which friends and allies turned.

Take, for example, the final hours of Cop27 in Sharm el-Sheikh. As old North-South acrimony deepened and debates intensified on 1.5C, fossil fuels, and loss and damage, the possibility of a full-scale Cop collapse grew increasingly real.

As the major players of global geopolitics came together against the dramatic backdrop of the UN Blue Zone’s bank of ticking clocks to hash out an acceptable compromise, it was once again the COP26 President playing the role of fair and trusted broker.

UK off course for net zero, its advisers say

That work was good for the global climate agenda, and it certainly did no harm to the UK’s standing on the international stage. These are the sort of moments – moments of fair brokering, competence and friendship – that are remembered in the world of international politics and diplomacy.

And as former environment minister Lord Zac Goldsmith pointed out in his explosive resignation letter on Friday, it is certainly in our national interest to have as many friends as possible as we look to navigate the fraught geopolitics that confronts us, not least in the one-country-one-vote system at the General Assembly.

So, Ruto was perhaps right that, in the current constitution of both concepts, global goods like climate action can’t compete against national interest. But he was not actually sketching an unsolvable problem. He was in fact shining a light on the extent to which our national interest has become far too narrow and inwardly-defined. Correcting that is where we must focus our efforts.

Norway approves oil and gas fields despite Cop fossil phase-out push

The UK’s political leaders, at the end of this parliament and the beginning of the next, must make the conscious move to lead once again. As a first step, that means taking the bold domestic decisions needed to protect and restore the UK’s credibility overseas.

And it means committing the necessary resources internationally, not least to honour the once-flagship but now at-risk climate finance pledge, at a minimum by committing to make up any shortfall over the next parliament.

If we can do the above swiftly, we might just be forgiven for our momentary post-Cop26 blip.

One no longer needs to be a scientist to know there is literally not a minute to waste.

Alex Urwin currently works in climate philanthropy. He was previously a staffer and speechwriter to the Cop26 President Alok Sharma and a researcher in the office of the UK prime minister.

The post The UK’s retreat from climate leadership is not in its national interest appeared first on Climate Home News.

What does a just energy transition mean for the world’s least developed countries where energy access, especially in rural areas, is a priority for national development?

Last week, a Just Energy Transition Partnership (JETP) between Senegal, France, Germany, and the EU was announced at the Summit for a New Global Financial Pact in Paris.

This means Senegal’s government has committed to reaching 40% of renewable energy in the electricity mix, in exchange for €2.5 billion ($2.7bn) from France, Germany, the UK, Canada and the EU.

As the director of the Senegalese think-tank ENDA Energie, my colleagues and I worked to ensure that this deal would not hinder Senegal’s national development goals and that energy access remains a priority of our country.

US ‘still on the fence’ as nations debate global shipping emission tax

First, let us address the elephant in the room – Senegal has been gearing up to become a major gas producer to help develop its economy.

It has been said that revenues from gas will help with the country’s investment in transport, electrification, health, and education. Other arguments for gas have asked whether Global North countries financing renewables in Senegal are merely dictating what we need to do, stopping us from being a prosperous country.

These arguments can be convincing but they are misleading. First, climate and development goals can be achieved together and second, we are changing the way international cooperation works. Our experience with JETP Senegal has given national actors the agency to actively participate in crafting an international deal with the Global North.

International cooperation between the Global North and the Global South is usually done with barely any inputs from the beneficiary countries. This must change if we want to see success in the implementation of such projects.

Public banks agree to check investments against countries’ climate plans

This is why we ensured that JETP Senegal is shaped by national actors. We led a process in Senegal that gathered a broad range of local stakeholders – from government, research, civil society, and the private sector – where we worked on a realistic vision for our country.

After a series of discussions we came to a consensus that 40% of renewable energy in the electricity mix is an ambitious yet achievable target, especially provided with international support.

This bottom-up approach has given us lessons on how international cooperation must be conducted. First, having a domestically inclusive and nationally-led process empowers countries like Senegal to achieve their vision for national development.

Instead of being treated merely as beneficiaries where climate targets are dictated to us, an inclusive process gives us the agency to decide, based on scientific data and the realities of our country, what can be realistically achieved without compromising on other national development goals. As a result, the JETP-Senegal has remained in line with our vision of universal energy access in the country.

Additionally, this bottom-up process creates buy-in into the vision from national stakeholders and given broader support, can help facilitate its implementation.

Given that the vision of the JETP was supported by different groups nationally through multi-actor dialogue, it ensures that the priorities remain the same over time, even through changes in government leadership. This is opposed to traditional top-down approaches that risk national and climate goals are abandoned as national leadership changes.

Unfinished paperwork is kneecapping solar’s potential in China

Second, aligning climate and development goals is crucial for developing and least developed countries. Exclusively focusing on climate targets is a lost opportunity for national development, especially when there is enough evidence to show that both can be achieved simultaneously.

Further, a narrow focus on climate targets is unlikely to garner support from domestic actors for the energy transition, especially in lower- and middle-income countries.

In Senegal, a country where 30% of households lack access to electricity (as of 2018), universal electricity access has been an important development goal. In this case, JETP aligns the target of 40% renewable energy with very ambitious targets for reaching universal electricity access by 2025

Third, we learned that while the focus on energy transformations is important to achieve national development, it is only one part of the solution. A clean, affordable and reliable supply of energy is a key driver of transformations in other sectors, including agriculture, industry and transport.

However, during the process of identifying Senegalese vision, we have also identified the need to transform agriculture, industry, and urban systems. JETPs are therefore not a one-stop solution and must be complemented by financial cooperation that will enable a low-greenhouse gas and resilient transformation of the whole economy. This is particularly so given that other sectors than energy experience even greater challenges in accessing adequate amounts of finance.

Our experience in leading the national process to achieve the best deal on energy transition in Senegal has been an opportunity to show how international cooperation should be conducted. Contrary to some arguments that the Senegalese have no say in international agreements like JETP, we were able to create an international agreement that was shaped by national actors. We are not just passive subjects, we will lead the way in shaping the future of our country.

Secou Sarr is the director of ENDA Energie

The post Senegal shows African countries are not passive beneficiaries of climate finance appeared first on Climate Home News.

But the real challenge that underpins almost all questions of climate action and ambition is that old and distasteful chestnut – money.

The Summit for a New Global Financial Pact hosted by French president Emmanuel Macron in Paris last week and the UN climate negotiations in Bonn earlier this month both underlined the unavoidable fact that there is a gaping hole in the funding needed to pay for climate action.

If we are to have a chance of meeting the Paris Agreement goal of limiting global warming to 1.5°C, we need to dream big.

Rich world’s leaders fail to commit to Paris global financing summit

We have to talk about a fair, equitable and funded phase-out of fossil fuels. We have to scale up a renewable energy transformation in solar, wind and energy efficiency, and address many countries’ and communities’ lack of access to energy.

We have to remove key blocks to climate action in all corners of the globe by ensuring real technology transfer and waivers of intellectual property rights on key technologies such as renewable energy. In addition, those who are suffering the real impacts of the climate crisis urgently need support to cope.

But ambitious goals require real money; this is where the planet’s climate plan is failing.

The fact is that the money promised to lower income countries so that they can implement their climate plans still hasn’t appeared.

What does “unabated” fossil fuels mean?

The hole in the planet’s climate finances put a massive damper on climate talks in Bonn, as developing countries were reluctant to make yet more commitments to action they fear they may never get the funds for.

After all these years of broken promises, developing countries no longer want to take that leap of faith.

Three years late

Rich countries are three years late in meeting the already-insufficient target of $100bn a year in climate finance. What they have provided has been mostly in the form of loans instead of grants. This is pushing climate vulnerable countries deeper into debt to pay for a climate crisis they did not cause.

ActionAid’s recent research shows that 93% of climate vulnerable countries (where data is available) are in or at significant risk of debt distress. The cost of recovering from cyclones, floods, droughts, rising sea levels and crop failures is pushing countries deeper into debt, and preventing many from paying for basic services such as education or healthcare, let alone climate action.

But the problem gets worse. To find the funds to repay their external debt, lower income countries are perversely forced to expand the fossil fuel, deforestation and industrial agriculture activities that are causing the climate crisis. And so the vicious cycle continues.

Even though many have paid back their original loans, a combination of rising interest rates, successive currency devaluations, fluctuating global commodity prices and the destructive impacts of climate change have kept the debt repayment finish line perpetually out of reach.

Unconditional debt cancellation and scaled-up climate finance in the form of grants are therefore urgently needed to help countries sinking deeper into climate-destructive debt, and to give the whole planet a real glimmer of climate hope.

World Bank to suspend debt repayments for disaster-hit countries

Last week’s summit – held in the same city that hosted the historic Paris Agreement – rightly diagnosed that the lack of climate finance is the single biggest threat to our planet’s survival.

What a disappointment, then, to see so many world leaders come together to pledge so very little.

Big dreams on climate action were met with tiny concessions on financing. Rich countries said there was a “good likelihood” they would meet their $100bn target this year, but most of that will still be in the form of loans not grants.

Future loans may be granted a brief two-year debt relief pause in repayments in the aftermath of climate disasters.

Rich nations pledge $2.7 billion for Senegal’s renewable rollout

We saw growing interest in new tax regimes on shipping and financial transactions, which, if implemented carefully to be progressive and avoid putting more burdens on the poorest, could make a real contribution in future. However, nothing was actually agreed, other than a roadmap of processes whose outcomes are still unclear.

The summit also failed to even discuss the need to scale down lending to fossil fuels.

The only real announcement of note was from the World Bank and the International Monetary Fund. Amid much fanfare about “unlocking funds for climate action,” the big announcement actually boiled down to the World Bank giving more loans to developing countries.

Unlocking real money

All this hoo-ha to tell countries on the frontlines of the climate crisis that they need to get deeper into debt to pay for the crisis they did not cause. The Bridgetown emphasis on “private finance” i.e. loans, not grants, means this isn’t justice, or even a handout; it’s a slap in the face.

Fossil fuels, planes, ships and shares – What will be taxed for climate funds?

It’s time for powerful governments to unlock real money rather than simply give out more loans. Global action on tax is urgently needed and could be transformative.

But more immediately, at the very least, they need to recognise debt cancellation as a key part of the climate solution. Because climate finance is not only about making climate action fair. It is about making climate action possible.

Teresa Anderson is global lead on climate justice for ActionAid International

The post Dreaming big on climate action means finding the money to pay for it appeared first on Climate Home News.

After surprising everyone by finally agreeing to a loss and damage fund at Cop27, developed countries were back to playing Scrooge in Bonn the last two weeks.

They wanted to talk about narrowing the gap to 1.5C but not if that also meant talking about paying more to help developing countries reduce that gap.

After nine days of debate and a desperate plea from the talks’ chair, they and a group of developing countries with Bolivia as their spokesperson made a compromise. It was the worst of both worlds: no formal emission cut talks and no talks on finance.

Small islands were “disappointed” while the chair of the world’s poorest countries (LDCs) said, “it doesn’t seem like everyone is ready to address this climate crisis with the urgency it requires”.

In Bonn, developed countries claimed their opposition was just procedural. But in Rotterdam last year, the EU’s climate lead Frans Timmermans was perhaps more honest when he claimed his citizens “will not buy” the argument that the historic polluters should pay to fix the climate crisis.

As they head to Paris for Thursday and Friday’s global financing summit, the supporters of Mia Mottley’s Bridgetown Agenda seem resigned to this.

They’ll talk about changes to equity-to-loan ratios, debt suspensions after climate disasters, renewable investment and shipping levies – any way to help developing countries finance climate action without actually taxing the citizens of developed countries.

This week’s news:

• After “difficult experience” at Cop27, Mexico leads anti-harassment push in Bonn
• Last-minute compromise avoids breaking point on adaptation goals
• UN head Guterres contradicts Cop28 host on fossil fuel phaseout
• Small islands “disappointed” as talking about emissions cuts proves too controversial for climate negotiators
• Bonn climate talks at risk of collapse, after 7-day agenda debate
• The Overshoot Commission is talking about solar geoengineering. Not everyone thinks it should

…and comment

• China is quick to combat social media’s climate lies – but not when they are about their critics

Another sign of how bad things are is the growing seriousness with which geoengineering is being treated.

A group of researchers who want to cool down the planet by blocking the sun has teamed up with a high-profile group of ex-politicians, scientists and youngsters to form the Overshoot Commission.

Several of these commissioners told Climate Home they are worried about the commission’s focus on techno-fixes to climate change.

But others, like the former president of the sinking islands of Kiribati feel the situation is so desperate that these risky measures can’t be ignored. “What other options do we have?” he asked.

The post Scrooges block progress in Bonn – Climate Weekly appeared first on Climate Home News.

 Some experts suggested that China has “only delivered 10%” of the China South-South Climate Cooperation fund since it was announced eight years ago, calling the pace “quite slow”.

Others said it would be “hard to tell” how much of the pledge has been fulfilled due to a lack of official updates. 

Li Shuo, senior global policy advisor at Greenpeace East Asia, described the fund’s details as “confusing” but believed that China “has not delivered as much as it promised”. 

In 2015, China’s President Xi Jinping announced the fund during a state visit to the USA, months before unprecedented US-Chinese climate cooperation helped the world agree to the Paris agreement.

Xi Jinping and Barack Obama in California in 2015

 At the time, Xi said that China would “make available” 20 billion yuan ($3.1 billion) to help other developing countries tackle climate change. But he did not set a deadline for the fund’s delivery. 

 Delivery ‘not as promising’ 

China’s climate envoy Xie Zhenhua said at Cop27 that China had provided 2 billion yuan ($310 million) to other developing countries, which are otherwise known as the Global South, to reduce their emissions and adapt to climate change.

Xie did not give more information about the figure. But E3G, a thinktank focused on climate change policy, interpreted Xie’s words as an update on the China South-South Climate Cooperation Fund. 

It said in a recent analysis that China’s climate finance to the Global South “falls short” of its own pledge because the nation has delivered just one-tenth in seven years. 

UAE appoints fossil fuels execs and climate campaigners as Cop28 advisers

Byford Tsang, senior policy advisor at E3G, told Climate Home News that “at the current pace, I think it would take quite a long time [for China] to fulfil its pledge”. But he acknowledged that, as a developing country, China is not obliged to provide any formal climate finance.

Although it is possible that Beijing would give “an injection” to the fund to accelerate its delivery, “based on what has been achieved so far, it was not as promising as people were thinking during the start”, Tsang continued. 

 Institutional challenges 

 Tsang of E3G pointed to “institutional challenges” as reasons for the fund’s sluggish progress because it is managed by different ministries, which makes it complicated to disperse.

According to a study  published by China’s National Centre for Climate Change Strategy and International Cooperation (NCSC), an affiliation to the Ministry of Ecology and Environment “multiple departments” are “involved” in China’s south-south cooperation on climate change. 

“Apart from the newly established Ministry of Ecology and Environment (established in 2018), it also involves China International Development Cooperation Agency, the ministries of commerce, finance and foreign affairs, as well as the National Development and Reform Commission,” the study said. 

It added that the China South-South Climate Cooperation had yet to be set up for various reasons, including lack of coordination – a fact that “had affected the progress of the south-south climate change cooperation and international reputation” of China. 

“A common understanding is that the promised amount would need to be distributed by the fund. If the fund has not been established, then its delivery is an open question,” Li of Greenpeace East Asia told Climate Home News. 

 He said the overall situation is “unclear” because China has not reported the fund’s progress regularly. “On the other hand, China is not obliged to give such reports internationally,” he added. 

Regulators crack down on corporate carbon neutrality claims

Duan Hongbo is a professor at the School of Economics and Management at the University of Chinese Academy of Sciences. He said that the politics and attitude of potential recipient countries – most of which are the least developed in the world – also play a role. For example, some countries constantly change their points of contact and others “are more interested in projects that would boost their economy than combat climate change.” The Covid-19 pandemic also delayed global cooperation, he said. 

But some observers urge China to make bigger strides. Belinda Schäpe, policy adviser at E3G, told Climate Home News: “China hasn’t put a timeline on the fund. But for it to actually have an impact, it should happen faster.” 

As China sees the south-south climate cooperation as a way to “portray itself as the responsible leader power”, to keep that leadership of the developing world and its credibility as the climate leader, accelerating the delivery of its climate fund is the “rational next step”, she added. 

Ten-hundred-thousand

The Chinese government has not specified how the fund would be spent, but experts from a Chinese state-affiliated thinktank NCSC said China has been funnelling it through the so-called “Ten-Hundred-Thousand” projects announced by President Xi at the opening ceremony of the 2015 Paris climate talks. 

Xi said that from 2016, China would “launch cooperation projects to set up 10 pilot low-carbon industrial parks and start 100 [emissions reduction] and [adapting to climate change] programs in other developing countries and provide them with 1,000 training opportunities on climate change”.  

UAE invites Syria’s Assad to Cop28 in latest rehabilitation push

Xi’s statement clarified the scope of the fund, wrote Li Yan, an NCSC analyst, in a 2020 report. 

China said in its most recent climate change “white paper” that by July 2022, it had signed 43 agreements on climate change cooperation with 38 developing countries, agreed to build low-carbon industrial parks in Laos, Cambodia and Seychelles, and carried out 40 emissions reduction and adaptating to climate change projects in more than 30 nations. 

The paper said China had allocated 1.2 billion yuan ($170 million) to the south-south climate change cooperation by last July but did not explain whether the money had been dispersed through the fund. It also remains unclear if Xie’s statement was an update for this figure. 

A fund ‘out of goodwill’ 

Developed countries – including the US, Canada, Australia, Japan and much of Western Europe — have been condemned for failing to live up to their long-standing promise of providing $100 billion a year to developing countries by 2020 to help the latter reduce and adapt to the impact of climate change. 

The pledge was made in 2009 to reflect wealthy nations’ historical responsibility for causing climate change during their industrialisation. They are responsible for half of all historical carbon dioxide (CO2) emissions globally despite always being a small minority of its population. 

As China is considered a developing country, it is not obliged to provide climate finance, according to the principle of the United Nations Framework Convention on Climate Change, the foundation of international climate negotiations which was set up in 1992.

In theory, it is also eligible to receive aid from developed countries. But at the Copenhagen climate talks in 2009, China said that small island states, the least developed countries and African nations should be “prioritised” in receiving financial support, indicating that it would not fight for climate finance shelled out by developed countries. 

Furthermore, China launched its South-South Cooperation on Climate Change mechanism in 2011 to support other developing countries. Since then, it has provided aid mainly through donating materials, sharing knowledge and offering training programmes. 

US backs Indonesian oil refinery despite pledge to end fossil fuel finance

Duan told Climate Home News that it was “crucial” for any evaluation of the fund to understand that China’s position and obligations are different from that of developed countries. 

“China is not responsible for providing any climate finance to developing countries,” Duan said. “Its commitment is completely voluntary and out of goodwill. Therefore, any contribution [from China] should be viewed as a positive impact.” 

Regarding the “confusing accounts” of climate finance, Duan said that “not only China, but the entire global climate community” is facing this problem. 

 “There are different ways to calculate climate finance depending on how a country defines its scope and how much pressure it is under to deliver it,” he explained.  

The post Confusion surrounds China’s pledged climate finance towards the Global South  appeared first on Climate Home News.

The UAE’s climate envoy Sultan Al Jaber has requested donor countries to provide a definitive assessment on the overdue delivery of the commitment before the climate summit in Dubai at the end of November.

“Expectations are very high. Trust is very low,” he told attendees of the Petersberg Climate Dialogues in Berlin.

In 2009 wealthy nations committed to collectively mobilise $100bn a year by 2020 to help developing countries cut their emissions and adapt to climate impacts.

Broken promise

But they have so far failed to respect that pledge. In 2020 rich nations mobilised $83.3 billion of climate finance, according to data published last year by the Organisation for Economic Co-operation and Development (OECD).

At the annual Petersberg Climate Dialogues in Berlin today, Al-Jaber contrasted rich countries’ failure to provide $100bn of climate finance with this year’s $100bn in military expenditure and pledges for the war in Ukraine and the $9,000bn that were mobilised to respond to Covid-19.

Speaking before Al-Jaber, German foreign minister Annalena Baerbock said that a meeting of rich countries in Berlin yesterday suggested they are “on a good track to finally make good on the promise” this year.

A plan drawn up by Germany and Canada ahead of Cop26 in 2021 indicated that the pledge would be met this year, three years later than the original deadline.

Reporting on climate adaptation is a mess – here’s how to fix it

For Jule Könneke, a policy advisor at E3G, meeting the pledge is one of the keys to changing course at Cop28.

“For donor countries, it is about proving to be a credible partner by delivering on commitments and ensuring that poorer countries have the means to meet climate and development goals,” she said.

US biggest culprit

The bulk of the climate finance gap can be attributed to just a handful of developed countries, according to analysis by the Overseas Development Institute (ODI).

The United States shoulders the biggest responsibility providing only 5% of its “fair share” under a calculation done by the ODI  that includes the size of its economy and historical emissions.

The US should have provided $43bn but sent just $2bn, the ODI said, making it “overwhelmingly responsibile for the climate finance gap.

Australia, Canada, Italy and Spain have also been singled out as laggards.

Underlying several times the importance of "trust", Sultan Al Jaber said meeting this obligation is "vital" to the political credibility of the UN's climate process.

Alpha Kaloga from the Africa Group of Negotiators told Climate Home the delay has been eroding trust. "Which credibility do developed countries have in requesting us for more climate action, while not providing the resources promised," he asked.

"Sowing division"

Sarah Colenbrander, climate programme leader at ODI, is critical of Al Jaber's statements. She told Climate Home that Al-Jaber should work with the biggest donors, like France, Germany and Japan, to raise ambition rather than sowing division.

"There are also important questions to be asked about when newly wealthy countries should assume responsibility for providing climate finance," said Colebrander. "The Cop28 presidency is shirking such questions."

Countries like the Cop28 host United Arab Emirates, Qatar and Singapore have per capita incomes that exceed those of some developed nations obliged to provide climate finance.

Just a "symbol"

Fourteen years after its inception, the $100 billion pledge may not even be enough for developing nations.

Avantika Goswami from the Delhi-based Centre for Science and Environment told Climate Home it is "more of a symbol" at this point. "Meeting the pledge this year might assuage wealthy countries' guilt, but the needs have now escalated and so must the financial reparations", she added.

Developing countries may need up to one trillion dollars every year for climate action, according to an estimate by the Cop27 and 26 hosts. That's ten times more than $100 billion.

Developing and vulnerable countries also want to see more grants and lower interest rates on loans so that climate finance does not add to debt piles.

The post Cop28 boss slams rich nations “dismal” $100bn finance failure appeared first on Climate Home News.

Joe Biden made the commitment as he hosted a virtual meeting of world leaders on Thursday to spur high-level leadership to limit global warming to 1.5C.

This is the first time since 2017 the US has pledged cash to the Green Climate Fund (GCF), which supports developing countries to cut emissions and adapt to climate impacts.

The move was part of a broad call to action to the Major Economies Forum on energy and climate, a group of more than 20 high-emitting developed and developing countries which account for around 80% of global greenhouse gases.

US brings cash

Biden promised to ask Congress to approve an additional $500m over five years for the Amazon Fund to end deforestation by 2030.

He pledged to raise $200m from public, private and philanthropy sources for cutting methane emissions in developing countries and urged nations to scale up carbon capture and removal technologies.

The US president called on leaders to join a collective pledge for half of all car sales and at least 30% of medium and heavy-duty vehicles to be zero emissions by 2030.

UN’s Green Climate Fund too scared of risk, finds official review

“It’s a really big deal,” Joe Thwaites, a climate finance campaigner at the Natural Resources Defense Council, told Climate Home News of Biden’s pledge to the GCF.

“Over the last few years, the fund has been right up against the limits of its resources. It has been approving money to projects as soon as it is receiving it from donors and has had to hold back projects because of a lack of money,” Thwaites explained.

“This $1bn is significant because it will allow the GCF to unlock more money for communities in need,” he added.

The move, he said, will boost US credibility at the fund, after its ability to provide climate finance had been put into doubt.

As I address the Major Economies Forum on our climate challenges, let me make a few things clear:

We are committed to following the science.
We are determined to strengthen our actions.
We will do what it takes to limit global warming to 1.5 degrees Celsius.

— President Biden (@POTUS) April 20, 2023

Climate finance laggard

However, as the GCF is calling on countries for a third round of funding pledges to replenish the fund, the US is yet to deliver on its first commitment.

The $1bn announcement only accounts for half of the $2bn the US owes the fund after Donald Trump reneged on a $3bn pledge made under Barack Obama almost a decade ago. Since then, European and other donors have doubled their pledges to the fund.

“The question is: can the US clear another billion dollars and finally deliver on the pledge?” Thwaites said. Other donor countries will closely watch what the US will bring to a GCF pledging conference in October, he added.

Keeping 1.5C within reach

The leaders’ meeting was framed by the findings of a report by the International Energy Agency which outlined steps to take to keep the 1.5C goal within reach.

It highlights four key pillars: decarbonising the energy sector, ending deforestation, tackling non-CO2 emissions such as methane, and accelerating the deployment of carbon capture and storage and removal technologies.

UN: World set to blow through 1.5C carbon budget in 10 years

Alden Meyer, senior associate at think tank E3G, told Climate Home that the US was seeking to create more coalitions of the willing to advance action in key sectors – a model which has proved successful in galvanising support to cut methane emissions under the Methane Pledge.

“There are some good pieces,” said Meyer, “but it’s not comprehensive,” citing the lack of initiatives to decarbonise the energy sector.

That’s a gap the EU intends to fill. EU Commission president Ursula von der Leyen proposed to launch an initiative for setting global targets for energy efficiency and renewable energy by Cop28. “These targets would complement other goals,” she said.

Betting on carbon capture

Biden called on countries to speed up the deployment of carbon capture and removal technologies by joining the ‘Carbon Management Challenge’.

This includes capturing carbon from specific polluting plants or directly from the atmosphere and storing it in geological formations, in the oceans or in products.

The White House said the initiative will develop a suite of announcements and goals that will be unveiled at Cop28.

US bets big on carbon-sucking machines

Meyer said US officials are considering setting a collective target for the amount of carbon being stored annually. The EU Commission has already proposed a binding target for the union to store 50 million tonnes of CO2 per year by 2030.

Scientists say carbon capture and removal technologies are needed to limit global warming to 1.5C by counter-balancing residual emissions from hard-to-abate sectors. How much of it is needed depends on how quickly countries reduce emissions and reach net zero.

The IEA estimates that projects are needed to capture around 1.2 billion tonnes of CO2 by 2030 to meet global climate goals – a 30 fold increase on 2021 levels.

However, such technologies remain underdeveloped and face technological, economic and environmental barriers. There’s also uncertainty on the risks of deploying carbon dioxide removal at large scale.

Saudi Arabia, Russia push for more World Bank money into carbon capture

Campaigners have warned that focusing on techno-fixes risks distracting from pressing carbon-cutting action and impede the transition to clean energy sources.

Steven Feit, a senior attorney at the Center for International Environmental Law, told Climate Home it was “very concerning” that carbon capture was increasingly being used “to justify the construction and expansion of the fossil economy” ahead of Cop28 hosted by oil and gas producer UAE.

Feit cited a major scientific report showing that carbon capture was one of the most expensive technologies with little mitigation potential.

The post US pledges $1 billion to Green Climate Fund amid call to keep 1.5C in reach appeared first on Climate Home News.

Speaking at a meeting of the World Bank’s steering committee, Saudi Finance Minister Mohammed Al-Jadaan urged the World Bank to “take on a prominent role in promoting CCUS [carbon capture utilisation and storage]”.

At the same meeting in Washington DC, Russia’s deputy prime minister Alexey Overchuk said CCUS was “of utmost importance to the green agenda”.

The technology is meant to suck carbon out of the atmosphere, usually from a particularly polluting source like a fossil fuel power station’s smokestack, and either use it or put it back in the ground. But it remains very expensive and largely unproven at scale.

Brownen Tucker from the campaigning group Oil Change International said more World Bank support for carbon capture and storage would be “beyond ridiculous”.

“The World Bank prioritising carbon capture and storage would just be a way to greenwash its long-time role as a piggy bank for the fossil fuel industry,” she told Climate Home.

Saudi’s CCUS pitch

At this week’s spring meeting of the World Bank, Al-Jadaan said the bank’s support for CCUS has been “insignificant” so far.

He added that the technology has “great potential to serve the climate mitigation agenda while contributing to affordable universal energy access”.

At the World Bank Group Development Committee meeting in Washington DC, I stressed the importance of continuing the Group’s commitment to ending extreme poverty and boosting shared prosperity and the Sustainable Development Goals of the United Nations.#WorldBank #SpringMeetings

— محمد عبدالله عبدالعزيز الجدعان | Mohammed Aljadaan (@MAAljadaan) April 12, 2023

Saudi Arabia is a major proponent of CCUS and has a history of promoting it in international summits, including talks over the IPCC scientific reports and UN climate talks.

‘Costly distraction’

Carbon capture and storage remains expensive and unproven at large scale.

According to the IPCC’s scientists, stopping a tonne of carbon dioxide with CCUS costs between $50 and $200. Replacing fossil fuels with renewables usually saves money.

There are currently only 35 commercial facilities applying CCUS with a total annual capture capacity of 45 Mt CO2, according to the International Energy Agency (IEA). Most are in North America and in the gas processing industry.

Many climate campaigners have called it a “distraction” that gives fossil fuel companies a licence to keep extracting more climate-harming coal, oil and gas.

But the IEA’s head Fatih Birol disagrees, calling it “critical for ensuring our transitions to clean energy are secure and sustainable”.

‘Absolutely essential’

In its current climate change action plan, the World Bank says CCUS “may be an important lever for decarbonization”.

In 2009 the World Bank set up a dedicated trust fund looking to support developing countries exploring CCUS potential.

Supported by the UK and Norwegian governments, the fund has provided grants worth a few million dollars.

It has supported technical assistance for the development of technology in Mexico, South Africa, Botswana, and, most recently, Nigeria.

Developing countries call for new government funds for World Bank

Speaking at a seminar last year, World Bank specialist Natalia Kulichenko said the trust fund would be closed in December 2023.

But she added the support was “absolutely essential to continue” in other forms, as the World Bank had been receiving more interest on CCUS from developing countries.

Kulichenko talked about the possibility of providing loans to governments and guarantees to the private sector as part of existing programs.

Russian backing

Alongside CCUS, Russia’s Overchuk listed gas, nuclear energy and measures to reduce the burning of gas as a by-product of pumping it up, known as flaring, as important green projects.

Russia is the second world’s largest gas producer, accounting for 18% of the world’s gas output in 2021.

Following Russia’s invasion of Ukraine, countries, especially in the European Union, have dramatically cut imports of Russian gas.

A gas field in the Yamal Peninsula in Russia. Photo: Russian Government

Russia is also the eighth biggest shareholder of the World Bank, where voting rights are linked to financial contributions.

The World Bank has provided over $1.5 billion in support for gas projects since 2020, according to an analysis from the campaigning group Oil Change International.

Gas commitments

In 2017, the bank said it would end its financial support for oil and gas extraction within the following two years.

But at Cop26 in Glasgow, it did not join five fellow development banks and 20 countries in signing up to a commitment to halt any new financing for oil and gas projects internationally by the end of 2022.

Green hydrogen rush risks energy ‘cannibalisation’ in Africa, analysts say

Russian Deputy prime minister Overchuk also urged the international community, including the World Bank, to find a common solution to ensure energy access and tackle poverty in Africa.

“Developing natural gas projects in African countries, abundant with natural gas, is a part of this solution,” he said. Several African leaders have said the same, criticising the West for stopping gas finance.

Overchuk opposed “additional reiteration and redistribution of resources” towards tackling climate change. Those efforts, he believes, are already well funded by the World Bank.

World Bank’s private sector arm to stop supporting new coal

The World Bank has committed to aligning all its operations with the Paris Agreement by July 2023.

However, the draft methodology to be used for this process indicates that some support for Paris-unaligned oil and gas projects will continue, according to the National Resources Defence Council.

The lender claims to be the world’s largest provider of climate finance to developing countries. It says in 2022 it delivered $31.7 billion for climate-related investments, taking up 36% of its overall lending.

The post Saudi Arabia, Russia push for more World Bank money into carbon capture appeared first on Climate Home News.

Yellen hosted talks with global finance officials to discuss an initial spate of balance sheet changes that will allow the World Bank to lend an additional $50 billion over 10 years while maintaining its top-tier AAA credit rating, and how to deepen those efforts with it and other multilateral development banks.

Yellen said the changes already approved had sharpened the mission of the World Bank, but more “bold action” was needed to ensure it could work to end extreme poverty, boost shared prosperity and better meet 21st century challenges like climate change, fragility and pandemics.

What’s at stake for climate at the World Bank’s spring meeting?

“We should use the rest of the year to undertake additional reforms through a staged implementation approach that can be agreed upon by the Board and implemented on a rolling basis.”

Climate change demonstrators carry a mock oil pipeline during a “Stop Fossil Gas” protest outside of the 2023 IMF-World Bank meetings in Washington, D.C. on April 12, 2023. (Photo: Reuters/Bryan Olin Dozier/NurPhoto)

Major milestones

The bank’s steering committee – officially known as the Development Committee – met later in the day, where members welcomed the bank’s “Evolution Roadmap” and said they looked forward to additional efforts aimed at achieving “major milestones” by the October annual meetings of the World Bank and International Monetary Fund.

“They expect the Board of Executive Directors and World Bank Group management to finalize a work plan with detailed actions to be taken,” the committee’s chair said in a statement.

Members underscored their commitment to “ensuring that the World Bank Group has adequate financial capacity to respond to development challenges and support its expanded mission.”

World Bank’s private sector arm to stop supporting new coal

They called for ambitious approaches to increasing private capital, facilitating investment and leveraging the public sector.

The members also looked forward to exploring additional recommendations made by an independent panel last year, including making the bank’s emerging markets database more accessible to private investors, optimizing the balance sheet for the low-income lending arm, and exploring a voluntary channeling of IMF Special Drawing Rights.

Momentum ahead

Yellen said upcoming events could be leveraged to keep momentum strong for the evolution of the World Bank. Those included the Summit for a New Global Financial Pact to be hosted by France in June, the Group of 20 Leaders’ Summit in India in September, the annual meetings of the World Bank and IMF in Morocco in October, and the United Nations COP28 climate conference to be held in Dubai in November and December.

“We’ve all seen how threats to global health can disrupt entire societies and economies, and how fragility and conflict can lead to significant displacement and migrant flows,” she said.

She said Ajay Banga, the U.S. nominee to replace World Bank President David Malpass, who will step down on June 1, was “the right leader to take the baton from President Malpass and accelerate our work to evolve this institution.”

Malpass told the committee he felt the bank had responded with “vigor and speed” to Yellen’s call for reforms.

“There was … wide recognition that progress toward these goals requires a sharper focus on sustainability, resilience, and inclusiveness as part of our mission,” he said.

Development Committee members thanked Malpass for his leadership of the WBG during a historically challenging period, including an unprecedented surge in financing in response to multiple crises.

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The process for doing this was also agreed by setting up a Transitional Committee (TC) on funding loss and damage with 24 members representing different geographical and other constituencies which would meet three times before Cop28 in Dubai in December.

The TC has just been formed with some eminent people as members and will have its first meeting in March in Egypt. They will have to come up with ways in which the fund can be set up and managed for a decision at COP28.

As a veteran of the UN climate change process and having engaged on the topic on behalf of the most vulnerable developing countries and communities, I have some recommendations for the newly set up TC.

Loss and damage committee ready to start talks following Asian nominations

1. Do not operate on ‘unfccc time’

My first recommendation is the need for urgency.

In the last few days alone, hundreds of victims of human induced climate change have lost their lives and livelihoods in Vanuatu from two successive cyclones.

In Mozambique and Malawi, Cyclone Freddy hit both countries twice within a few days. They need help today, not tomorrow.

So please do not operate in ‘UNFCCC time’ which would mean talking and talking for years before a penny is available in the fund. Please try your best to get something up and operational by Cop28 rather than Cop29 or Cop30.

Do not make ‘perfect’ the enemy of ‘good enough’! An imperfect fund that starts to operate quickly is better than waiting years for the first dollar to be delivered.

Vulnerable nations set up alliance to prepare loss and damage action plans

2. Partner with experienced actors

The second message is on how to deliver funds and to whom. The existing funds under the UN climate process, such as the Adaptation Fund (AF) and the Green Climate Fund (GCF), take a long time to evaluate and approve. That money doesn’t start flowing for many years.

For the victims of a flood or cyclone that is absolutely unfit for purpose. The global humanitarian actors have a much better and fast delivery system to respond rapidly to such rapid onset weather events.

It is worth engaging with the UN Office for the Coordination of Humanitarian Affairs (OCHA), the Red Cross, the Red Crescent and the World Food Programme (WFP), among others, who have in fact developed methods of pre-positioning materials, as well as providing anticipatory funds.

However, not all climate change impacts manifest themselves as rapid onset extreme weather events. A major impact of human induced climate change is from sea level rise, which is quietly displacing thousands of people living in low lying coastal zones of islands and deltas.

Hence, this should be a very high priority for the TC under the UNFCCC, as it cannot be fobbed off on to other agencies.

3. Become a formative voice

My third and final message for the TC is to become the main voice and explainer of what loss and damage entails. This is still a highly confusing topic and needs to be explained to a wide variety of decision-makers very rapidly.

My request to the TC and UNFCCC Secretariat is to invest in a very robust and effective communication strategy for all your work on a rapid and regular basis.

This also means making your own deliberations as transparent as possible.  I hope that you will welcome and facilitate the engagement of observers to each of your meetings and meet with us after each meeting to share what you are working on and be open to engagement from us.

Let me end by wishing every success to the TC and hoping that it can be the first Committee set up under the UNFCCC that can operate in ‘reality time’, rather than ‘UNFCCC time’.

Saleemul Huq is the director of the International Centre for Climate Change and Development

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“Current global financial flows for adaptation are insufficient for, and constrain implementation of, adaptation options, especially in developing countries”, the scientists report says.

Wealthy governments have failed to provide $100 billion of climate finance a year they promised to developing countries by 2020, with the US responsible for the vast majority of the shortfall.

Finance for adapting to climate change – rather than cutting emissions – has been particularly low.

At Cop26 in 2021, all countries agreed that developed nations would double their adaptation finance by 2025 on 2019 levels and a group of self-proclaimed “champions” has been set up to try to implement this.

Adaptation becomes harder

The IPCC’s scientists warned time for adaptation action is rapidly running out because measures will increasingly become ‘constrained and less effective’ as temperatures rise.

When countries can no longer adapt to climate change, they will suffer devastating loss and damage as a consequence of escalating climate-related hazards like heatwaves, droughts and storms.

The United Nations Environment Programme (Unep) estimates $340 billion will be needed every year for adaptation, but only about 7% of climate finance flows are currently spent in that direction.

‘A huge injustice’

Aditi Mukherji, one of the authors of the report, told Climate Home that the lack of funding forces low-income countries into further debt.

Seventy-one percent of public climate finance was provided through loans in 2020, with grants having much smaller role, according to the latest assessment by the OECD.

IMF approves first batch of climate resilience loans

“It is a huge injustice”, Mukherji said. “Least developed countries and coastal communities who have not caused the problem are now having to take loans to solve the problem. It makes hardly any sense.”

The IPCC report summarises the state of knowledge of climate change science, its impacts and risks and the progress made on mitigation and adaptation. The text was approved by all member governments after a week-long session in Switzerland.

Insufficient climate action

Scientists say the pace and scale of what has been done so far, and current plans, are insufficient to tackle climate change.

While highlighting the lack of money for adaptation, the report also says climate finance also needs to increase ‘many-fold’ for emissions-cutting measures in order to achieve climate goals.

World Bank proposes freeing up $4bn by loosening lending rules

Despite absorbing the overwhelming majority of the money pot, funding for measures to cut emissions still falls short of the levels needed to limit warming to 1.5°C across all sectors and regions.

“Adaptation and mitigation are closely interlinked,” Mukherji said. “Unless we reduce our emissions now we are locked in a cycle of irreversible impacts”.

“We cannot think we can continue to emit, make the planet warmer and those who are affected will continue to adapt. That is not going to happen. Adaptation will always have some limits.”

Adaptation limits reached

The report says some tropical, coastal, polar and mountain ecosystems have already reached hard adaptation limits. That means any action becomes unfeasible to avoid risks. An example is when a small island becomes uninhabitable due to sea level rises and lack of freshwater.

The IPCC has also found ‘increased evidence’ of maladaption, which occurs when measures backfire and increase vulnerabilities.

Mukherji says there is a need for a less technocratic approach. “The most appropriate actions need to be decided by those who are most affected. You cannot go from outside and impose views on the communities,” she said.

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In June 2021, a coalition of local groups and international NGOs complained to the fund about a $117 million project to reduce deforestation in the Unesco-designated Bosawás and Rio San Juan biosphere reserves in the Caribbean Region of Nicaragua.  

The project, which was approved in 2020, aims to reduce extensive grazing and introduce agroforestry systems such as cocoa. 

The region is home to 80% of Nicaragua’s forests and most of its indigenous populations. But it is gripped by increasingly violent conflict between indigenous communities and settlers, who are grabbing land to exploit the forest’s resources and farm cattle. 

Over the past week, the Center for Legal Assistance to Indigenous Peoples reported two attacks against communities in the project area that led to the death of at least five people.

The complainants claimed the project would exacerbate the violence. They argue it was approved without proper due diligence or their free, prior and informed consent. 

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This is the first time a complaint case reaches the board of the UN’s flagship climate fund. Civil society observers argue the board’s handling of the case will set a precedent for future complaints.

Behind closed doors

The findings of the investigation have not been made public because of the sensitive nature of the case and complainants have remained anonymous because of the risk of retaliation.

However, excerpts from a draft report, seen by Climate Home News, shows that the redress body found the project clearly violated several GCF safeguards and procedures, including the lack of consultation with indigenous groups. It agreed that the project may exacerbate conflict.

Board members discussed the report behind closed doors this week during a meeting in Songdo, South Korea. The meeting closed on Thursday without a public update on the case.

Liane Schalatek, a civil society observer at the GCF, told Climate Home the closed door discussion was meant to protect the complainants and the integrity of the process. “It is now used to divert the latter and harm the former…and that is a tragedy,” she said.

Escalating violence

Florencia Ortúzar, a Chilean lawyer at the Interamerican Association for Environmental Defense (Aida), a regional NGO, supported the complainants to bring their case to the GCF. 

Ortúzar said it was “unfortunate and infuriating” that the issue had not be given priority during the four-day long meeting. A delayed outcome means affected communities may have to wait until the next meeting in July for a decision – nearly a year after the investigation’s findings were finalised.

“And in the meantime violence escalates,” Ortúzar told Climate Home.

In a letter to the GCF board, and writing on behalf of 15 indigenous communities, the Center for Justice and International Law said the recent attacks were carried out by a group of 60 armed settlers who burnt down 50 homes. It urged the GCF to publish the final report on the case.

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In its draft recommendations, the redress body urged the board to implement robust due diligence on human rights and independent monitoring as a condition for the project to go ahead.

While the body hasn’t got the power to advise the cancellation of the project, board members could decide to scrap it – the complainants’ preferred outcome.

Credibility test

Amaru Ruiz, director of Nicaraguan organisation Fundación del Río, who supports the affected communities, said the GCF’s credibility was on the line. 

He said the fund should “completely reassess the approval of the project” or risks “legitimising environmental destruction and the process of forest invasion”.

“What is at stake is not the credibility of the [Nicaragua] regime, but the credibility of the fund,” he said.

“This not just the first major grievance case, it is a test case – for the solidity and fairness of the fund’s complaints procedures, but also for the board’s compliance with guidelines it adopted for its own conduct in such cases,” said Schalatek.

“Unfortunately, it appears that the board is falling short in this first test,” she said, adding that indigenous groups still haven’t been able to see the final findings.

IMF approves first batch of climate resilience loans

Human rights abuses

Ortúzar, of Aida, said indigenous people have no confidence in the ability of the Nicaragua government and the Central American Bank for Economic Integration (Cabei), which is providing co-funding, to deliver the project under strict monitoring conditions.

She said the government had expelled UN staff and dissolved close to 200 NGOs to escape scrutiny and it was unlikely to accept monitoring from any third party.

Earlier this month, the UN Human Rights Council found that widespread human rights violations that amount to crimes against humanity are being committed against civilians by the Nicaragua government for political reasons. 

Human rights experts said this was a product of the deliberate dismantling of democratic institutions and the destruction of civic space.  

A report by the Heinrich Böll Foundation found that Cabei’s operations lacked transparency and that it was funding president Daniel Ortega’s authoritarian regime. 

A Green Climate Fund spokesman told Climate Home: “The GCF has robust procedures to address any complaints made in relation to projects, including safeguards to protect complainants. We cannot comment on this case since the matter remains confidential.”

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Nepal, Bangladesh, Senegal, Malawi, Jamaica, Trinidad and Tobago, Tonga and Vanuatu are exploring setting up national facilities to channel resources for climate disasters response and disburse money where it is most needed.

The initiative will help communities inform governments on how to respond to future climate shocks from a local perspective.

The alliance is being supported by the International Centre for Climate Change and Development (ICCCAD) in Bangladesh, and the International Institute for Environment and Development (IIED) in the UK.

Ritu Bharadwaj, a researcher at IIED, said the bottom-up approach would avoid “pre-conceived solutions” and ensure countries are “ready to deploy any additional funds which might be available in the future”.

World Bank backs mega dam threatening to displace thousands in Mozambique

Money for climate victims

In a breakthrough deal at the Cop27 climate talks in Egypt, countries agreed to set up a fund dedicated to support vulnerable countries address climate-related losses and damages.

But it could be a long time before money is mobilised. A transitional committee is due to work out how the fund would operate, who will pay, who will benefit and how it will be governed and make recommendations ahead of the next round of UN climate talks in the UAE.

The 24-people committee is due to hold its first meeting in Luxor, Egypt, on the 27-29 March despite the Asia Pacific group’s failure to nominate their two representatives. Several sources told Climate Home News this was because of several countries competing for the positions.

Mohamed Nasr, Egypt’s lead climate negotiator and one of the committee members, said: “This issue is of extreme importance to everybody, so everybody wants to be sitting at the table.”

Two sources told Climate Home that nominations from the group are expected soon.

Locally-led solutions

The alliance will help vulnerable countries prepare for the handling of loss and damage funds, said Saleemul Huq, director of the ICCAD.

“Money is not going to come for a while so part of the exercise is to know how to use it when it comes,” Huq told Climate Home. “So this is a knowledge-first approach.”

Huq said the alliance will support the development of locally-led solutions, co-created with communities, which are cost-effective.

“It’s about getting a better handle on what is needed to respond to unavoidable climate impacts so countries are ready to address them when they come. People can’t afford to wait until the world wakes up and starts filling the coffers of the loss and damage fund,” he said.

Pooling resources 

To make the most of the patchwork of existing but limited funds, the alliance urged countries to create a national facility that pools funding from the private sector, development aid, philanthropies, insurance, debt relief mechanisms, national budgets and new funding opportunities under the G7-backed Global Shield.

These national entities can act as a ready vehicles to disburse any future loss and damage cash in a cost-effective, accountable and transparent way, researchers say.

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Christopher Bartlett, a member of Vanuatu’s national advisory board on climate change and disaster, said the nation was “one of the strongest allies” of the initiative.

Vanuatu is reeling from the devastation caused by two cyclones which hit the small-island state within 24 hours of each other last week.

Lubna Yasmine, joint secretary on climate change at Bangladesh’s environment ministry, described the approach as “very good”.

“It’s very important to put people at the center of the action because if we can help communities directly, they can solve their own problems and come up with innovative solutions,” she said. “There is no time for delayed action, we need to get to work immediately.”

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The proposal is expected to be tabled at a G20 meeting this week at Nandi Hills summer retreat near India’s tech hub Bengaluru, where financial chiefs from the bloc have gathered for the first major event of India’s G20 presidency.

The development comes as World Bank President David Malpass held a discussion with Finance Minister Nirmala Sitharaman on Wednesday on addressing debt vulnerabilities, India’s finance ministry said.

“India is writing a proposal to form a group for reforms to World Bank,” one of the sources said, requesting anonymity as they are not authorised to speak to media.

“First step”: Reformers react to World Bank plan to free up climate spending

India’s finance and foreign ministries and the World Bank did not immediately respond to a Reuters’ request for comment.

“Democratisation of World Bank has been a long term line pursued by India and other countries. Differential financing terms for least developed and developing countries is desirable,” a second source said.

India’s chief economic adviser on Tuesday said reforms at multilateral development banks would be at the top of the agenda for discussion during the G20 financial chiefs meeting.

Sitharaman told Malpass on Wednesday that climate finance was a focus area during India’s G20 presidency and multilateral development banks “can play a major role in incentivising private capital, de-risking instruments, and providing greater concessional finance”.

World Bank chief to step down early after climate controversy

U.S. Treasury Secretary Janet Yellen is also expected to press for consensus on reforming multilateral development banks to vastly expand their lending to tackle pressing global challenges such as climate change and conflict.

The World Bank Group’s climate change action plan for 2021-2025 has set a target to deploy an average of 35% of the institution’s financing in support of climate action.

The Group said in September that it delivered a record $31.7 billion financing in fiscal year 2022 to help countries address climate change, a 19% increase from the $26.6 billion all-time high in the previous fiscal year.

The World Bank has proposed lowering the loan to equity ratio of its main bank from 20% to 19%, freeing up about $4 billion a year to lend.

Refromers from the governments of Barbados and Germany told Climate Home that this was a good start but did not go far enough.

Last week, Malpass announced he would quit by June, following criticism of his climate scepticism.

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