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PRESS RELEASE: EU’s financial commitments for COP28 lack ambition and practical steps for global climate justice

PRESS RELEASE: EU’s financial commitments for COP28 lack ambition and practical steps for global climate justice
Brussels, 17th October 2023. Today, the Economic and Financial Affairs Council configuration (Ecofin) decided on the EU’s climate finance priorities, following the Environment Council’s Conclusions setting out the EU’s overall position for COP28 yesterday. The EU failed to take a strong, sustainable stance on the $100 billion climate finance promise and to agree on the swift phaseout of all fossil fuel subsidies. Unless corrected, this will hamper the pathway to the net-zero targets and the EU’s new call for a global target to phase out all fossil fuels in the energy sector at COP28. Climate Action Network (CAN) Europe welcomes the EU Environment Ministers’ commitments to the operationalisation of the Loss and Damage Fund and finding new sources of finance, including from the fossil fuel sector, as well as to scale up adaptation finance provision with a specific focus on poor and vulnerable countries and communities, particularly the Least Developed Countries (LDCs) and Small Island Developing States (SIDS). However, the lack of detail and practical steps on how these commitments will be implemented continues to be alarming. This risks delivering only the bare minimum on climate finance and a poor faith interpretation of overdue commitments. Ahead of COP28, there is growing concern about the EU’s lack of ambition to scale up and improve climate finance in line with the Paris Agreement and the needs of climate-vulnerable countries and communities.  Rachel Simon, International Climate Finance Policy Coordinator at CAN Europe, said: “The EU Environment Ministers shared a welcome commitment to be at the forefront of increasing adaptation finance and reiterated their support for the Loss and Damage Fund. Ministers also highlighted the need for new sources of finance, including from the fossil fuel sector. However, Environment and Finance Ministers fell disappointingly short of providing an adequate or clear plan on how to put this into action and scale up equitable climate finance in line with global justice at COP28.“ The real impact of the commitments given today and yesterday will be in the details which are still unclear. For the COP28 ahead, the EU needs to clarify its position and ensure that the demands of Global South countries, climate-vulnerable communities and civil society will be heard while developing a more detailed implementation plan. “The EU needs to use the next weeks ahead of COP28 to get its house in order on climate finance, and to listen to climate-vulnerable countries and civil society. The EU needs to act as a leader amongst developed countries to drive forward ambition on increasing and improving public climate finance and the Loss and Damage Fund which can deliver adequately for the countries and communities who need it,“ Simon added.   Breakdown of the EU Finance Ministers’ Economic and Financial Affairs Conclusions on Climate Finance
  • The Loss and Damage Fund: The EU reiterated its commitment to the operationalisation of the Loss and Damage Fund and finding new sources of finance. As the transitional committee on Loss and Damage funding arrangements starts its final scheduled meeting today in Egypt, committee members need to recommend setting up the fund as the centrepiece of funding arrangements, as an Operating Entity under the UNFCCC, in order to ensure equitable governance, an exclusive focus on addressing loss and damage, and an independent Secretariat.
  • The $100 billion climate finance promise: The EU fell back to reaffirming commitments which developed countries have so far failed on. Even in the fourth year of the goal, it is unclear if it will be met. We need a clear plan for meeting and delivering on the shortfalls. Countries should also agree on an ambitious approach to the overall target of the new climate finance goal to replace it, answering to science and the needs of the developing countries. On this, the EU’s recognition of the role of public finance as an important component needs to be strengthened.
  • Adaptation finance: In COP28 Conclusions, Environment Ministers committed that the EU will be at the forefront of the collective effort to scale up adaptation finance provision and mobilization with a specific focus on poor and vulnerable countries and communities, particularly LDCs and SIDS. This commitment is welcome, and the EU needs to drive forward a clear and collective plan from all developed countries to deliver on it, to meet the COP26 commitment to double adaptation finance by 2025 based on 2019 levels. This should be seen as a stepping stone to balancing mitigation and adaptation finance, as set out in the Paris Agreement. Despite the commitment, the EU has not decided on a clear pathway for the implementation of the adaptation financing. CAN Europe calls for a detailed plan on how the commitment will be fulfilled. 
  • Shifting all financial flows: The EU failed to agree to phase out all fossil fuel subsidies. The Climate Finance Conclusions refer only to inefficient and environmentally harmful subsidies, although the Environment Council Conclusions go further, calling for a phaseout of all fossil fuel subsidies which are not contributing to a just transition or the eradication of energy poverty as soon as possible. More positively they invite Multilateral development banks (MDBs), Development finance institutions (DFIs), and Export Credit Agencies to phase out financing of fossil fuel energy sector projects as soon as possible. In terms of broader financial reform, the conclusions lack proposals on how to build a more equitable and democratic financial system or adequate and meaningful action on debt cancellation and global tax reform. This is needed to equip developing countries with the (fiscal) space they need to act on the climate crisis.

-ENDS-

For more information & interview requests, contact: Jani Savolainen, Communication Coordinator  jani.savolainen@caneurope.org / +358 504667831   Notes to the Editor: