Financing the Climate at COP21
Brittaney Warren, Researcher, G7 and G20 Research Groups
December 8, 2015
Key among the issues being negotiated at COP21 in Paris is climate finance. The expectation is that the final agreement will build upon the momentum started at Copenhagen in 2009, where developed countries agreed to mobilize $100 billion per year by 2020 to help developing countries mitigate against and adapt to climate change. The year 2009 was also significant in that it was the first time the G20 promised to rationalize and phase out inefficient fossil fuel subsidies.
How much progress have global leaders made? A joint report by the Organisation for Economic Co-operation and Development and the Climate Policy Initiative estimates that the total amount of climate finance from both public and private sources was $62 billion in 2014, leaving a $38 billion gap. Yet, even if this amount is mobilized, it may not be enough to keep the global average temperature below the precarious 2°C threshold. The International Energy Agency has estimated that $53 trillion is needed by 2035 in order to cool our current trajectory. It is thus critical that the treaty text being negotiated in Paris significantly increases the $100 billion per year targeted at Copenhagen.
The first week of COP21 has seen some countries place a higher priority on climate financing than others. First announced at the Commonwealth Summit in Malta, at Paris Canada reiterated its plan to double its climate financing to developing countries to $2.65 billion. Australia likewise announced that it would commit $800 million for developing countries over five years. However, Australia’s funds will be redirected from the country’s existing foreign aid budget, highlighting the problematic constraint of determining what constitutes “new and additional” climate financing.
Others have been more specific about where their newly pledged funds will be directed. The United States announced that it will provide $30 million in climate risk insurance for small island developing states — those most vulnerable to sea level rise. France and India launched the International Solar Energy Alliance to mobilise more than $1 billion to increase solar power accessibility for the world’s poorest. The United Kingdom, Germany and Norway announced a provision of up to $300 million for Colombia to prevent deforestation.
Additionally, the Breakthrough Energy Coalition consisting of 28 investors, including Bill Gates and Mark Zuckerberg, was created. It will invest in innovative and clean technologies and will support projects approved by Mission Innovation, a coalition of 19 countries whose objective is to accelerate the global clean energy revolution.
Yet, while these announcements are encouraging, none addresses the global community’s heavy dependency on burning dirty fuels to meet its rapidly increasing energy needs. A working paper by the International Monetary Fund published on May 18, 2015, found that coal, widely recognised as one of the dirtiest and deadliest sources of energy, is the most heavily subsidised fossil fuel today. This report is consistent with the recent findings of the G20 Research Group, whose final compliance report on the 2014 Brisbane Summit shows a low 30% compliance on the G20’s commitment to phase out fossil fuel subsidies.
Given that even the world’s largest oil and gas companies are urging world leaders to set a price on carbon and regulate the industry, lack of compliance is suggestive of lack of political will. Mitigation and adaptation financing should be scaled up, but it cannot work if it is not accompanied by a shift in fossil fuel subsidies. It may be that at Paris, the very countries that opened Pandora’s box also hold the key to locking black carbon emissions back in it again by ensuring that business does not go on as usual.
For further information, see Agenda Intelligence: Moblising Climate Finance, by John Kirton (Newsdesk Media)
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Brittaney Warren is a researcher with the G7 and G8 Research Group, the G20 Research Group and the BRICS Research Group, based at the Munk School of Global Affairs in Trinity College at the University of Toronto. She has worked in Spain and in Peru where she conducted field research on a sustainable development project with women living in extreme poverty. She has conducted research on the compliance of CARICOM members with their summit commitments on non-communicable diseases. Brittaney leads the social media strategy and marketing program for the G20 Research Group's books and works on climate change, and is the lead researcher on an e-book project on "Delivering Sustainable Energy Access."
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