Vaishnavi Chandrashekhar
Much of climate finance has gone towards mitigation, mainly measures to reduce emissions, but communities also need money to help them adapt to changing climatic conditions
Net Zero Nuclear Event, at the United Nations Climate Change Conference UNCCC, held at the Expo City Dubai, United Arab Emirates. Rove Hotel, Blue Zone, 2 December 2023
IAEA Imagebank, <https://creativecommons.org/licenses/by/2.0>, via Wikimedia Commons
Hurricane Helene, one of the strongest storms to hit the southeastern United States, recently made headlines with television channels beaming images of flooded streets and flattened homes around the world. Around the same time, people on the other side of the world also faced extreme weather though they got less media attention. Heavy rains in September claimed a 1000 lives in west and central Africa. And in the north Indian state of Bihar, nearly two million people were displaced by unseasonal flooding.
Communities worldwide face the hazards of climate change, but some need more help than others to build their defenses against unpredictable weather or to pick up the pieces after a disaster. Whether they will get that help is the issue at stake at COP29, the United Nations climate summit scheduled to take place in a few weeks at Baku, the capital of Azerbaijan. The talks are expected to see 200 countries agree on a new goal for financing climate action, and the specifics on the amount and the donors look set to be hotly contested. Money talks are never easy, even in a petro-state.
The battle over climate finance has long been divided between, on the one hand, historically industrialised countries such as Germany and the United States, who have contributed the most to the greenhouse gases that cause global warming, and are obliged to provide climate finance; and, on the other hand, less wealthy nations focused on growing their economies or just getting by. Developing countries like India would like to see the current funding of $100 million a year turn into $1 trillion a year—a tenfold jump.
If past is prelude, that target will be difficult to achieve. The $100 million-a-year number was a goal set for 2020 but was only met by developed countries two years late, in 2022. Less than two weeks from the Baku summit, negotiators from the European Union and the United States have yet to throw out a number. The US position seems likely to depend on the outcome of its presidential elections, to be held just a week before the talks. And European countries have said they want emerging large economies like China, India, and Brazil—who are richer today than they were twenty years ago—to start contributing to the kitty. So far, China and others have baulked. (Experts note that some of these countries contribute to climate finance in other ways.)
From the perspective of vulnerable communities on the frontlines of climate change—whether they are coping with floods in Chad or record-breaking heatwaves in New Delhi—a question that’s as important as “how much” is: for what?
Much of climate finance has gone toward what’s known as mitigation—measures that help to reduce the emission of greenhouse gas into the atmosphere by transitioning economies from fossil fuels like oil, gas, and coal to renewable energy like solar and wind. Another popular mitigation effort is planting trees, which absorb greenhouse gases like carbon dioxide from the air. Mitigation is crucial, especially in the long run, to keep a lid on rising global temperatures. But communities also need money to help them adapt to changing climatic conditions—whether that’s helping coastal people build natural and artificial barriers against rising sea levels, providing farmers with drought-resistant seeds for their crops, or setting up early warning systems for storms.
Funding for this adaptation, however, has long fallen short of needs. Last year, the UN estimated that the cost of adaptation for developing countries ranged between $ 215–387 billion a year over the past decade—but the actual fundng was 10-18 times below this requirement. Communities in the least developed countries who need this aid the most are also the ones most affected by this “adaptation gap”.
No wonder, then, that developing countries want more money to be clearly allocated for adaptation as part of the new climate finance goal.
The cost of not adapting is significant. According to KPMG, economic losses from natural and climate-related disasters run to over $330 billion per year. Conversely, investing in adaptation helps the economy: every dollar spent on adaptation could generate twelve dollars of economic benefit, according to Standard Chartered. And the costs go beyond physical damages. Disasters displaced more people than conflict and war last year, according to a recent report by the Internal Displacement Monitoring Centre. In 2023, 26.4 million displacements were due to disasters in 148 countries and territories, compared with 20.5 million displaced due to conflict and violence in 45 countries and territories, it said. This displacement has global consequences, notes environmental journalist Omair Ahmed, as people affected by disaster flee to more prosperous regions. He points out that 12% of the migrants who died crossing the Mediterranean to get to Europe were from Bangladesh, a country that has been repeatedly struck by natural disasters.
Developing countries don’t just want more money for adaptation. They want more of that money in the form of grants—so far, much of climate finance has been in the form of loans, which increases the debt load of many poor countries. The African Group of Negotiators, a non-profit alliance of experts in the region, emphasised this at a recent pre-COP29 meeting. Baku must deliver an ambitious finance goal, they said, “that responds to the needs of developing countries, especially Africa, is consistent with 1.5C pathways for both mitigation and adaptation, and that does not exacerbate debt distress.”
Some also want the money to be better distributed across and within regions. For instance, in north Africa, countries like Morocco and Egypt have received more climate finance than conflict -roiled Yemen and Syria. Another report found that local communities received less than 20% of international adaptation finance, and that Indigenous communities get even less.
Where does that leave COP29? Last year’s climate talks scored a win with the launch of a Loss and Damage Fund to help developing countries, with an initial pledge of $700 million. (This is well short of the need, with one estimate suggesting up to $580 billion will be needed annually by 2030 to cover damage from climate-related disasters.) COP28 also advanced adaptation efforts with a new framework on “global climate resilience”. This year’s host, Azerbaijan, has floated several of its own initiatives including a Climate Finance Action Fund’ financed by voluntary contributions from fossil fuel-producing countries and companies. Presumably, the host nation will kick off the fund with its own contribution toward the initial target of $1 billion. (One might ask: why set up more new funds when old ones are still lagging?) COP29 president Mukthar Babayev has said that developing nations will need up to $6 trillion by 2050 to combat and adapt to climate change, and hopes to secure at least hundreds of billions at next month’s summit. For now, the numbers still don’t add up.
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