Climate funding undershoots real needs, but hope grows for future

U.N. climate talks in Poland over the past two weeks failed to deliver enough new funding for poor countries that are already suffering as the world warms, but did take some steps towards narrowing the shortfall in the future, experts said.

About 10 national and regional governments, mainly in Europe, announced fresh contributions to key global climate funds.

Germany led the way in pledging an additional 1.5 billion euros for the Green Climate Fund (GCF), as it moves to refill its coffers next year.

Norway also promised to double its contribution to the GCF, while the U.N. Adaptation Fund - which backs projects to help developing nations adjust to climate extremes and rising seas –received about $129 million in new donations, its best year since it was launched in 2007.

But finance experts and officials said the cash, while welcome, fell far short of the amount needed for vulnerable states to adopt clean energy and keep their people safe from worsening floods, droughts, storms and other threats.

“Levels of climate finance must meet the actual costs for our countries to adapt and address the impacts of climate change, to protect our people and our communities,” said Gebru Jember Endalew of Ethiopia, chair of the Least Developed Countries (LDC) Group at the negotiations.

“Our countries also have ambitious plans to tackle climate change and develop sustainably, but we currently lack the resources to make those plans a reality,” he said in a statement after the talks ended on Saturday evening.

The LDC group has said that developing countries overall would require more than $4 trillion to put into practice the plans they have submitted to the United Nations under the 2015 Paris Agreement on climate change.

Such plans, by all countries, are jointly intended to hold global temperature rise to “well below” 2 degrees Celsius, and ideally under 1.5C, compared to pre-industrial times.

Joe Thwaites, a sustainable finance researcher with the World Resources Institute, said a decision in Poland to assess developing-country needs in implementing those plans every four years, starting from 2020, was a “significant breakthrough”.

That assessment, produced by an expert committee, could shape discussions on setting a new target for international funding for developing countries, above a floor of $100 billion a year for 2020-2025, he said.

The climate conference in the Polish city of Katowice agreed that the process to set a post-2025 goal would begin in late 2020 - something poorer nations had been pushing for.

“They don’t want a situation, as happened with the $100 billion, when it was figured out in a matter of hours,” Thwaites said, referring to a last-minute scramble in 2009.

A more measured approach should result in a new goal that better reflects real needs, focuses on closing gaps in funding, particularly for adaptation, and is far more specific in terms of what can be counted towards it, he added.

The ambiguity of what wealthy governments can report as climate finance for vulnerable countries - including loans and export credit guarantees - has been controversial.

The “rule book” hammered out in Katowice as the basis for implementing the Paris Agreement failed to rectify that, said Brandon Wu, policy director at ActionAid USA.

For example, the United States could offer a $10-million commercial loan to Uganda for a climate project that would have to be repaid with interest, but could still count it as financial support, he said.

Joe Thwaites, a sustainable finance researcher with the World Resources Institute, said a decision in Poland to assess developing-country needs in implementing those plans every four years, starting from 2020, was a “significant breakthrough”.

That assessment, produced by an expert committee, could shape discussions on setting a new target for international funding for developing countries, above a floor of $100 billion a year for 2020-2025, he said.

The climate conference in the Polish city of Katowice agreed that the process to set a post-2025 goal would begin in late 2020 - something poorer nations had been pushing for.

“They don’t want a situation, as happened with the $100 billion, when it was figured out in a matter of hours,” Thwaites said, referring to a last-minute scramble in 2009.

A more measured approach should result in a new goal that better reflects real needs, focuses on closing gaps in funding, particularly for adaptation, and is far more specific in terms of what can be counted towards it, he added.

The ambiguity of what wealthy governments can report as climate finance for vulnerable countries - including loans and export credit guarantees - has been controversial.

The “rule book” hammered out in Katowice as the basis for implementing the Paris Agreement failed to rectify that, said Brandon Wu, policy director at ActionAid USA.

For example, the United States could offer a $10-million commercial loan to Uganda for a climate project that would have to be repaid with interest, but could still count it as financial support, he said.

Agencies