Rich countries scramble to hit $100bn climate finance target

Rich country leaders are scrambling to reach a $100bn climate finance target in the last week of COP26, despite growing divisions in the remaining last week of the Glasgow climate summit.

Boris Johnson, the UK prime minister and host of the summit, is seeking positive announcements given the chequered progress of the event, which has been notable for the absence of the presidents of several of the world’s biggest emitters, including China, Russia and Turkey.

Twelve years ago at the Copenhagen summit, wealthy nations committed to mobilising $100bn a year by 2020 to help poor countries cut their emissions and manage climate change.

Officials and some politicians believe the target figure could be reached in 2022, although the calculation may not be formally updated by the OECD before the end of the summit.

By 2019 the figure had only reached $80bn and, in theory, the target would not be reached until 2023, according to the latest comprehensive study.

Last month a report commissioned by the UK and based on OECD data by Germany and Canada, found that developed countries were expected to hit a figure close to $97bn in 2022.

The inability of developed nations to raise the targeted amount has been cited by developing countries as a “failure of trust” that threatens to undermine COP26 negotiations.

The announcement last week by Japan’s newly elected prime minister Fumio Kishida of an extra $2bn a year for the next five years, brought the target within reach. There were also fresh commitments from Italy, the UK and Denmark, although not all the funding will start to flow next year.

Officials were cautious last week over whether the $100bn figure has yet been reached or even whether it can be hit over the next week.

But John Kerry, the US climate envoy, is among those who believe the extra money pledged by Japan should enable the target to be hit in 2022. “We’re getting Japan at the table, the other day they promised to deliver $10bn, two a year for five years,” he said at the end of last week.

“That, when it’s used as a guarantee, which it will be, leverages $8bn at the World Bank. So we are over the $100bn for the year 2022, not just 23. So there is genuine progress here.”

One former COP negotiator privately predicted that the figure would be announced before the end of summit in order to give more momentum to the event.

Political leaders may also shift the goalposts by insisting that the target will have been met “on average” over the period 2020 to 2025.

If the target is reached it would give Johnson a chance to issue a positive announcement before the end of the summit, ticking off one of the four initial priority areas of “coal, cash, cars and trees”.

However, any such announcement would be treated with scepticism by the developing world. The calculation by the OECD on climate funding includes grants, loans and export finance credits from both public and private sources.

Many developing countries believe the definition is too generous and calculations from Oxfam suggest the true level of climate-specific grants is about one-fifth of the OECD “climate finance” numbers, once loans are taken out.

At COP26, negotiations are beginning to determine how to set a goal for the level of climate finance in 2025 and beyond.

Mohamed Adow, founder of Power Shift Africa, a Nairobi-based climate charity, said that the missed $100bn had “hugely damaged” trust in the UN climate summit process.

As the negotiations start to heat up during the second week of the COP, Adow said that “the general mood is very sour, because of the failure to honour these past promises.”

 “Instead of addressing these difficult issues, we have a presidency who prefers to make glitzy announcements outside the process,” he said. “There is no point promising the new stuff without honouring the old one.”

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here.

Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here

Source link

Related Articles

Back to top button