US delays global plan to provide $100 billion in climate finance
The United States is delaying a process to determine how the world’s richest nations will provide billions of dollars to poorer countries to fight global warming, according to people familiar with the discussions.
One of the main sticking points is whether the United States and other countries should make up the shortfalls if they fail to provide $100 billion a year to developing countries. The United States has raised concerns over a proposal by other rich countries to commit $500 billion over the next five years.
Financing climate projects in vulnerable countries will be a key issue in global climate negotiations next month. The United States and other rich countries promised in 2009 to give developing countries 0 billion a year starting in 2020, but that hasn’t happened.
They missed $20 billion in 2019, according to a report of the Organization for Economic Co-operation and Development. It’s unclear how much finance was provided last year, but the target has likely been missed if trends that show a deceleration in climate finance continue. The shortfall increases each year when the objective is not reached.
“So the question becomes, ‘OK, they could hit $100 billion in 2025, that’s five years behind. What do you do with those years you failed?’” said Joe Thwaites, finance expert at the World Resources Institute “That’s a real sticking point.”
Canada and Germany have been working since July on a plan for how developed countries can collectively find the money.
But the plan has been delayed as countries negotiate what it should include and how much they should be responsible for.
“There is a process that we have to go through, not just with Germany, but with the UK (which is hosting COP 26) and others,” said Canadian Environment Minister Jonathan Wilkinson. local media Last week.
If the plan isn’t strong enough, it could damage the credibility of international efforts to tackle climate change, proponents say.
The delay by US negotiators comes two weeks before world leaders meet in Glasgow, Scotland, for climate talks known as COP 26.
The financing plan currently being negotiated aims to describe how each country will contribute annually and what form this financing will take. But if nations fail to collectively reach $100 billion, the United States and some other countries have expressed concern about their ability to reach an even higher target to fill in the gap, sources say.
Another sticking point is efforts to increase the amount of finance for adaptation, which represents a much smaller share of climate finance than mitigation.
The State Department declined to comment. A spokesperson for Wilkinson, the Canadian minister, said the plan will be released before COP 26.
The plan should also detail how poor countries will access the funds and how much of the money will be grants or loans.
Yesterday a group of nearly 50 least developed countries released a document outlining their priorities for Glasgow.
“Wealthy nations must embark on a big push to deliver this long-promised funding with a credible delivery plan to restore confidence,” he says. The new funding targets “should be based on realistic assessments of the needs of developing countries” and address loss and damage from climate change in the poorest countries.
“While this is not a legally binding commitment, it was a political commitment, and it would be nice if the report indicated that donor countries were going to do their best to achieve this collective goal” , said Alden Meyer, senior official. partner at E3G.
The United States has offered signals in recent weeks. Last month, President Biden announced that the United States would quadruple climate finance to about $11.4 billion per year by 2024. The Senate also increased the amount it spends on climate finance in its final appropriation bill for fiscal year 2022.
But all of that pales in comparison to the $100 billion pledge, largely because negotiations will begin in Glasgow for a new round of post-2025 funding targets. Developed countries will seek to expand the group of nations that can contribute to the total, but this may be more difficult to do if they have not met their current commitment.
“The best thing developed countries can do is go into the COP with a very clear, solid, good-faith plan on how they’re going to get to the goal as soon as possible and close the gap,” Thwaites said. from WRI.
“If they don’t – if they expect to be able to pivot to a new round of negotiations and make demands of other countries – I just don’t see how it’s going to go well for them” , he added.
Countries with major economies face the heat for not contributing their “fair share” based on the size of their gross national income.
The UK recently slashed its overseas aid budget and is considering further cuts, raising concerns that it is transferring money from one basket to another without adding more to the pot.
Eddy Perez, who works on international climate diplomacy at Climate Action Network Canada, said a credible plan would recognize any shortfall in the $100 billion pledge.
“The first test of cooperation for these developed countries is the delivery plan, and if they fail, they will send a very troubling message to the international community about their ability to close the financing gap,” he said.