Climate change is already affecting the world’s poorest people. From cyclones to droughts, to flooding, its impacts could set the clock back and erase the progress that has been made in the global fight against poverty and inequality.
Developed countries, including members of the EU, have a duty to provide financial support for developing countries to adapt to climate change, which they are least responsible for. They also have a collective interest in empowering poorer countries to develop in a less polluting way so that their emissions don’t add to the climate change problem.
What the developed countries will put on the negotiating table in terms of climate finance can be the make or break issue for the Paris climate agreement.
Reaching the $100 billion goal
In 2009, during the Climate Summit in Copenhagen developed countries agreed to provide $100 billion per year by 2020, to help developing countries cope with the devastating impacts of climate change, and to pursue development pathways that leapfrog the use of dirty and polluting energy.
The chance of a successful Paris climate deal depends on developed countries keeping these past commitments. While there has been progress made towards reaching this goal, there is still a long way to go. The EU needs to provide a concrete roadmap that spells out plans of the Member States to reach the climate finance target of $100 billion annually by 2020.
The pledges made by countries to date are a step forward, but unfortunately, not all that glitters is gold. Firstly, much of the pledged support is made up of loans, including non-concessional loans, which need to be repaid over time. Secondly, it includes funding that only partially addresses climate change. Thirdly, most of the public climate finance comes from existing, often stagnant, flows of development aid. Countries need to ensure that their commitments are not a mere smart accounting exercise.
Climate finance package after 2020
Poor countries call on the EU and other developed countries for scaling up financial support after 2020, with the goal of $100 billion annually in 2020 used as a starting point. They also advocate for setting five-year collective targets of support, which will provide more predictability and thus allow them to plan for most effective and timely use of the funds.
The needs of the developing world will continue to grow. Even if global warming is kept to 2 degrees Celsius, the costs of adapting to climate change in the developing countries could climb as high as $500 billion per year by 2050. Moreover, a lot of poor countries, which are not responsible for the climate crisis, are willing to contribute to emission cuts. Many have also offered to increase their efforts further if they receive international support. Developing countries need to empower them to join the transition to 100% renewables.
In order to cover the growing needs for climate finance in developing countries, the EU needs to tap into innovative sources of climate finance, including the EU ETS revenues, the Financial Transaction Tax or fuel levies on international transport. Moreover, governments need to redirect money they spend on subsidizing fossil fuels into climate finance.