PRESS RELEASE: Climate Finance Study Reveals Increased EU Action Required Ahead of COP29

Financing the transition

Bonn, 6 June 2024 –  Ahead of the forthcoming New Collective Quantified Goal (NCQG) decision under the United Nations Framework Convention on Climate Change (UNFCCC), CAN Europe today launches new research on the EU’s provision of international climate finance. 

Under the UNFCCC and the Paris Agreement, developed countries are obliged to assist developing countries to cope with climate change, with a current commitment to mobilise $100 billion per year over the 2020-2025 period. In 2022, the EU reported a total of €28.9 billion in climate finance.

“International climate finance is essential to strengthening climate security and protecting those on the front line of the climate crisis. The EU must be the driving force for agreeing a new, robust climate finance goal that is needs-based and centres around public finance, especially for the most vulnerable countries’ climate adaptation action and for addressing loss and damage’. – Emilia Runberg, Climate & Development Policy Coordinator at CAN Europe.

The research published by CAN Europe today reveals that while EU climate finance increased in 2022 compared to previous years, 52% of all climate finance from the EU and EU Member States combined was extended via non-grant instruments, mostly loans. The report recommends that climate finance from the EU and  Member States to developing countries, in particular for adaptation and loss and damage, should be primarily provided as grants, especially as many developing countries are facing a serious debt crisis. 

The study also highlights the lack of a clear definition for climate finance and the absence of a robust international accounting system, which has potentially led to overestimations of the climate relevance of projects and total finance provisions.

Setting a new goal for the provision of climate finance from developed countries to developing countries is the top line task for COP29 in November, where a decision on a New Collective Quantified Goal (NCQG) is set to be adopted. The Bonn Climate Conference this week is tasked with moving on from technical exchange, to reach substantive agreements to serve subsequent political negotiations. The size, structure – inclusion of thematic sub-goals for mitigation, adaptation and loss and damage – as well as the financial form (grants and loans) still remain to be decided. 

CAN Europe expects the EU to make clear and first moves towards supporting an ambitious agreement later this year at COP29 as a cornerstone of a much needed deep transformation of the current unjust financial system. 

“The ongoing election to the European parliament is an opportunity. I hope our new parliamentarians will read this report, and consider what they can do to ensure that the EU is scaling up climate finance, and deliver on its commitments“ said Mattias Söderberg, Global Climate Lead of DanChurchAid

“It remains an area of concern that more than half of financial support by the European Union comes in the form of loans that can worsen already crushing debt levels in many lower income countries – to confront a climate crisis they have not contributed to. This runs against fundamental principles of climate justice and needs to change when setting the new global climate finance goal later this year”, said Jan Kowalzig, Senior Policy Adviser Climate Change at Oxfam Germany

“The EU often labels itself as a climate leader, but this report shows how hollow this leadership is. The EU only provides peanuts in international climate finance. This simply isn’t fair to the billions of people in the global South who suffer from floods and heat waves and who are the innocent victims of global warming. The EU must change course, recognize responsibility for its high CO2 emissions and vastly increase true support to poor people and countries to cope with climate change”, said John Nordbo, Senior Climate Adviser at CARE Denmark.


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Press release

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