The burning question of climate finance

Will Glasgow fix broken climate finance promises?

Anis Chowdhury, Jomo Kwame Sundaram
Sin Chew Daily, Malaysia

Current climate mitigation plans will result in a calamitous 2.7 deg C world temperature rise. Up to US$3.8 trillion (S$5.1 trillion) is needed annually to avoid global warming exceeding 1.5 deg C.

Rich countries have long broken their 2009 Copenhagen COP16 pledge to mobilise "US$100 billion per year by 2020 to address the needs of developing countries".

The pandemic has worsened the situation, reducing available finance. Poor countries - many already caught in debt traps - struggle to cope.

While minuscule compared with the finance needed to adequately address climate change, it was considered a good start. But ambiguity has enabled double-counting, poor transparency and creative accounting. Developing countries expected the promised US$100 billion yearly to be largely public grants disbursed via the then new United Nations Framework Convention on Climate Change Green Climate Fund.

However, Oxfam estimates that public climate financing could be just US$19 billion to US$22.5 billion in 2017-18, with little effective coordination of public finance.

Developing countries believed their representatives would help decide disbursement, ensuring equity, efficacy and efficiency. But little is actually managed by such countries themselves.

Instead, climate finance is disbursed via many channels, including rich countries' aid and private banks. Several UN programmes also support climate action, including the UN Environment Programme, UN Development Programme and Global Environment Facility.

But all are underfunded, requiring frequent replenishment.

Uncertain financing and developing countries' lack of meaningful involvement in disbursements make planning all the more difficult.

The poorest countries desperately need to rebuild resilience and adapt human environments and livelihoods. Chasing profits, most climate finance goes to middle-income countries, not the most vulnerable.

Currently fragmented climate financing urgently needs more coherence and strategic prioritisation of support to those most distressed and vulnerable.

Developed countries should honour pledge

Editorial
The Daily Star, Bangladesh

At the 2021 United Nations Climate Change Conference or COP26, Bangladesh's Prime Minister Sheikh Hasina has said effective action plans to address climate change are not possible without adequate, sustained and flexible climate finance, and The Daily Star fully agrees with her.

This is what experts - along with leaders of vulnerable and developing countries - have been saying for nearly a decade.

Yet, the reality is that these rich countries are the biggest carbon emitters in the world - and have been for decades. Developing and climate-vulnerable countries have mostly been the sufferers of that, as their carbon footprint is much smaller in comparison.

Therefore, it is only fair - as even the rich countries have admitted - for them to provide the developing and vulnerable countries with some of the funds that they require to take action to both address climate change as well as mitigate the resulting losses.

Without the necessary finance, plans to address climate change cannot be put in motion.

Empower consumers via climate maths

Ajay Sagar
Philippine Daily Inquirer, Philippines

Consumers now need a strong grip on climate economics as part of their daily routine. The time is not far when net-zero carbon targets will also apply to individual consumers and not just to countries, companies and businesses. Ultimately, consumers would need to be at the forefront.

Financial prudence sans climate maths is becoming irrelevant. Abundant start-up opportunities are opening up in the climate change technology arena, and developing Asia must grab these.

Decarbonisation and net zero are new buzzwords. The days are not far when consumers will start seeing the importance of climate maths and glance at daily spending statements for carbon scores.

The commitment to decarbonise one's operations becomes more relevant than just passing the buck. Initially, there will be a tendency to favour carbon offsetting. Independent mechanisms are required to check decisions that favour carbon avoidance over carbon reduction.

Climate maths needs to feature in all school, college and university curricula. National policies need to prioritise climate-relevant curricula. Our spending, savings and investment aspirations need to be aligned with our climate aspirations. Our own paths to carbon neutrality and net zero must gain currency.

Financing climate transition

Ishrat Husain
Dawn, Pakistan

Economists now say non-execution of the climate change agenda would have catastrophic consequences for the global economy. Climate change is in fact a major opportunity for promoting sustainable economic growth.

Luckily, the private sector and, particularly, venture-capital funds for start-ups, and environmental, social and governance funds for green investment are beginning to fill the void.

Foundations and philanthropic organisations have also become active and begun to channel long-term patient capital for climate transition.

Pakistan is the fifth-most vulnerable country to climate change, although its carbon dioxide emissions are low. The biggest risk is to the water-food-energy nexus because the lifeline of Pakistan's sustenance is the Indus River, which is dependent for more than 65 per cent of its flows on snow and glacier melting. Floods, droughts and changes in rainfall pattern may affect water availability in the irrigation system, which feeds 18 million ha of farm land.

After a long hiatus, the present government has embarked upon an ambitious programme of constructing 10 reservoirs for water storage to be released in the winter months and also to generate clean hydroelectricity.

Public finances are not strong enough to provide funds for early completion of these projects. Multilateral development banks have provided debt financing but delays in completion will result in large cost overruns. Pakistan has not yet accessed or tapped other sources of private-sector financing, either from domestic or global investors. Each dam project can be transformed into a corporate entity in the public-private partnership mode and debt and equity financing can be obtained from domestic and international private markets.