2023-12-13 01:19:52
The Conference of the Parties on Climate Change (COP28) held in recent days in Dubai has had as its main purpose to make a balance global to know the degree of execution of the 2015 Paris Agreement and assess progress towards limiting global warming to 1.5°C.
Like in previous conferencesother issues such as fossil fuels, climate financing and the fund for losses and damages caused by climate change have also been raised.
Disasters that cost 4.3 trillion dollars
The issue of financing to address the problem of climate change is key. In 2023, the World Meteorological Organization published the report United in Sciencewhich indicates that, between 1970 and 2021, around 12,000 disasters were recorded due to extreme meteorological, climatic and hydrological phenomena.
In economic terms, these catastrophes cost around 4.3 trillion dollars and occurred mostly in developing countries.
Coinciding with COP28, the report has also been published Loss and damage today: how climate change is impacting production and capital prepared by J. Rising from the University of Delaware (USA).
The report includes estimates by country on the economic losses due to climate change. It is indicated that extreme weather events They represent losses of 1% of GDP. These losses are 10 times higher for low-income countries and regions tropical.
In addition to the economic impact, there is another humanitarian impact due to the impoverishment of the most vulnerable population, some 3.5 billion people, according to the Intergovernmental Group of Experts on Climate Change.
Among this population group, women and young people stand out. They are forced to migrate to other placesmortgaging the future of their communities and countries.
Evolution of climate finance
The climate crisis requires investments for mitigation and adaptation. Therefore, it is necessary to have financing that is not always available to developing countries.
This issue goes back a long way. Already in the COP15 of 2009, developed countries committed to mobilize about 100 billion dollars a year for climate action in 2020. This goal was reaffirmed in the COP16.
In the year 2011the Green Climate Fund. The objective was to finance actions for the mitigation and adaptation to climate change of the international community.
However, despite the commitments made, the Climate financing mobilized by developed countries is far from being achieved.
In the year 2022, the Organization for Economic Cooperation and Development presented a balance sheet on the funds mobilized. In 2020, only $83.3 billion had been contributed. Of this amount, 8% was allocated to low-income countries, most affected by climate change. The rest went to middle-income countries.
The loss and damage fund
The problem of financing was taken up again in the COP26. As a matter of urgency, it was included in the Glasgow Climate Pact. With it, developed countries committed to reaching the objective of 100 billion dollars annually in 2023.
One year later, in COP27a Loss and Damage Fund which was to begin operating on the day of the start of COP28.
This fund is based on a system of allocation of financial resources, according to available evidence. Contributions are voluntary and come from developed and emerging countries.
Provisionally, the fund will be managed for four years by the World Bank. It is not specified which countries will receive aid, but a minimum percentage of resources is guaranteed for less developed countries and small islands. To begin with, it already has a contribution of some 656 million dollars.
This quantity It is not even 1% of the total money committed for years. It is, furthermore, very far from the estimated annual costs generated by climate change, estimated for the year 2030 between 290,000 and 580,000 million dollars.
Other funding initiatives
Climate action is also about having access to energy that is affordable, sustainable, clean and inclusive, as well as adaptation measures. To do this, it is necessary to mobilize other financial resources.
In this sense, international organizations and multilateral development banks have launched a joint declaration where concrete and urgent actions are presented that allow increasing financing.
Some of the most innovative actions were discussed at COP28 in the finance day.
The agreement reached for the main international financial institutions and countries to offer climate resilient debt clauses in their loans stands out. These will allow countries to pause in paying their debt when they are affected by climate catastrophes, as announced United Kingdom to Senegal.
He Inter-American Development Bank announced that it had offered $1.2 billion in loans covered through resilient debt clauses.
For his part, the world Bank pledged to suspend debt and interest for two years in the event of a natural disaster.
Other institutions such as African Development Bankhe European Bank for Reconstruction and Development and the French Development Agency have announced plans for the integration of these clauses in the sovereign loan agreements.
Akinwumi Adesina, President of the African Development Bank, at the Adaptation Financing for Africa Summit during COP28 on December 1, 2023, in Dubai, United Arab Emirates. Flickr / COP28 / Christopher Edralin, CC BY-NC-SA
Another important innovation is the creation of a hybrid mechanism financingproposed by the African Development Bank and the Inter-American Development Bank.
This mechanism will allow take advantage of the Special drawing rights unused, in addition to reserves, as loan instruments to finance climate and development. This financing channel will be carried out through multilateral development banks.
Along with these measures, other investments aimed at climate change announced by the Development Bank of Latin America, the Asian Development Bank, the European Investment Bank and the Public Development Banks of the Green Coalition of the Amazon basin also stand out.
Regarding the contribution of private investment, the background Alterra, proposed by the United Arab Emirates in order for countries in the Global South to have better access to climate finance. The goal is to mobilize $250 billion worldwide by 2030.
This fund has been divided into two sections. One of them, Altérra Acceleration, with an endowment of 25 billion dollars, to allocate capital directly or through investment funds. The other, Altérra Transformation, with 5 billion dollars, for risk mitigation, thus contributing to promoting investment in the Global South.
It could be concluded that COP28 has begun to put words to the financing melody, although not completely. There are still countries like the African ones that They demand concrete actions to finance adaptation on the continent. All this without forgetting that financing must be more equitable and fair.
#Climate #finance #COP28