The 28th session of the Conference of the Parties (COP28) to the UN Framework Convention on Climate Change (UNFCCC) is underway at Expo City, Dubai in the United Arab Emirates (UAE) under the themised under Technology & Innovation, Inclusion, Frontline Communities and Finance.However key among discussions in COP27 in Egypt was climate financing by developed countries to help developing countries mitigate the effects of climate change.
Developed countries committed to mobilizing $100 billion per year in climate finance for developing countries in 2009 at the 15th Conference of the Parties (COP15) of the UNFCCC in Copenhagen, Denmark. This commitment was reiterated in the Cancun Agreements adopted at COP16 in Cancun, Mexico in 2010. At COP21 in Paris in 2015, it was extended to 2025.
Despite this commitment, developed countries have not yet met the $100 billion goal. In 2020, developed countries provided $83.3 billion in climate finance, according to the OECD. This means that there is still a gap of $16.7 billion per year. In fact, the most recent report from the Organization for Economic Co-operation and Development (OECD) found that developed countries only provided $83.3 billion in climate finance in 2020.
There are a number of reasons that could explain this failure.
Ambiguity: One reason is that the definition of climate finance is broad and can include a variety of different types of investments, such as loans, grants, and equity investments. This can make it difficult to track how much climate finance is actually being provided and to assess whether the $100 billion target is being met.
Another reason for the failure is that developed countries have been slow to disburse climate finance. In many cases, countries have pledged to provide climate finance over a period of several years, but they have not yet released all of the pledged funds. This can make it difficult for developing countries to plan and implement climate action projects without the financing at hand.
Also, some developing countries have argued that the quality of climate finance is not always good enough. They say that too much of the climate finance that is provided is in the form of loans, which can add to their debt burden. They also say, too much of the climate finance is focused on mitigation projects, such as renewable energy and energy efficiency, and not enough is focused on adaptation projects, which help them to cope with the impacts of climate change.
Despite these challenges, some developed countries have met or exceeded their climate finance commitments. For example, Sweden has provided more than $1 billion in climate finance per year since 2010. Germany has also provided significant amounts of climate finance, and it has pledged to provide $6 billion per year by 2025.
However, other developed countries have fallen short of their commitments. For example, the United States has only provided about $3 billion per year in climate finance. The United Kingdom has also fallen short of its commitments, and it has pledged to provide $11.6 billion per year by 2025.
The failure by developed countries to meet the $100 billion climate finance goal is a major concern as developing countries need this finance to invest in climate action projects that will help them reduce their greenhouse gas emissions and to adapt to the impacts of climate change. Developed countries must do more to meet their commitments and to ensure that developing countries have the resources they need to address the climate crisis.