$100 Billion Climate Finance: A Broken Promise

Many low and middle income countries share Oxfam’s view. Or go further in their criticism: In 2015, India’s Ministry of Finance publicly denied the OECD’s estimate of $62 billion in climate finance for 2014. In fact, the correct value is closer to $1 billion. Diane Blackline also believes that rich countries have intentionally inflated their climate aid. Blackline is a climate change ambassador for Antigua and Barbuda and formerly the Alliance of Small Island States negotiator, behind a group of coastal and island nations just above sea level.

Who does not pay enough?

Rich countries may have agreed jointly on the $100 billion goal, but they have not reached a formal agreement on how much each country should pay. Instead, individual states make a financial commitment and hope that others will follow suit. In order to get an impression of aid distribution, experts divided the $100 billion into fictitious “fair shares” and compared it to the countries’ actual expenditures. The results are the same for all analyses: the United States in particular falls far short of its original promises.

So the United States should According to an October report by the World Resources Institute in Washington, 40 to 47 percent of the total amount, depending on whether the fair share calculation is based on prosperity, past emissions, or population. However, according to WRI estimates, its average annual contribution from 2016 to 2018 was only about $7.6 billion. Australia, Canada and Greece also lag far behind what they should have contributed. On the other hand, Japan and France paid more than their fair share – albeit almost entirely in the form of repayable loans rather than grants.

Adaptation to unavoidable climate impacts is hardly encouraged

The next point relates to the question of why. Most of the climate finance went to projects to reduce greenhouse gas emissions. However, this contradicts the original agreement, which stipulated that only half of the funds be allocated to such measures and the other half to projects aimed at adapting to the effects of climate change. Well it had to be Define the Organization for Economic Co-operation and DevelopmentThat in 2019, only $20 billion flowed into adaptation projects, less than half of the money earmarked for climate protection projects (see graph ‘Barely any adaptation money’). According to United Nations estimates Developing countries already need $70 billion annually to cover adjustment costs, and by 2030 the amount is likely to rise to $140-300 billion.

Donor countries may prefer projects to contain climate change because success is clear and measurable — it can be measured, for example, by the amount of carbon dioxide saved or captured, says climate finance researcher Jessica Omokote. On the other hand, it is difficult to say what is a measure of successful adaptation, as the expert who teaches at Oxford University shows how the world can achieve net CO2 emissions in a fair way. “No person or group is fully adapting to climate change; new climate risks and vulnerabilities continue to emerge.” And spending money on carbon dioxide is more attractive to industrialized countries’ policies.₂Spend savings, because it is usually better received by voters, while adjustment assistance has a reputation for being used only in individual recipient countries.

Another reason for the imbalance between mitigation and adaptation is that funds are increasingly being provided in the form of loans rather than grants. “Almost the adjustment procedures are not financed through loans,” Haq says. “If you give the poor money to counteract the effects of climate change, no profits will be generated.”