A breakthrough for climate finance at COP27

We have ample research on the adverse impacts of climate change to be well assured that we are dangerously close to reaching the deadline to reverse it. There is no dearth of agreements, treaties and targets set by international organisations or ambitious statements made by nations, but it doesn’t have the desired effect. We need to improve the collective implementation of our commitments to climate action. The recently concluded annual UN Climate Change Conference COP27, held in Sharm el Sheikh from November 6-20, was notable in this regard. This time the theme of the conference was “moving from negotiations and planning to implementation,” a call towards implementing the commitments of The Paris Agreement 2015. A crucial reason for the failure in implementation is financing. The developing nations of the world have been raising noise, asking those wealthy nations responsible for the majority of the climate change and historical emissions to compensate the vulnerable nations more susceptible to climate change. The developing nations banded together to pressurise the developed countries to deliver on their financial commitments.
After many complex negotiations which extended the conference by a day, it saw a breakthrough in establishing a “loss and damage” fund. The fund is dedicated to helping the developing and under-developed countries of the world to deal with and recover from Climate Change-induced disasters. An often-mentioned refrain in climate finance has been the $100 billion per year promised to developed countries which were never delivered. At COP15 held in Copenhagen, the developed countries’ Parties committed to jointly pay $100 billion per year through 2020 to the vulnerable countries to cover their climate action expenses. This goal was reiterated at COP16 and the historic COP21 in Paris. But they were far from reaching the goal by the end of 2020. It has now been extended to 2025.
There exists a need for more availability of sufficient capital to meet expected emissions in developing countries. And there are several challenges to this. Through global climate funds, getting international climate money is frequently a resource- and time-intensive process that lasts longer than election cycles. Several reports have noted the difficulty in mobilising private finance from public interventions. A UNFCCC report on mobilising USD 100 bn per year has stated that there is a need for ensuring a greater amount of grant finances to avoid developing countries incurring debt burdens. Some suggested alternative financial sources are improving local capital markets, increasing the annual commitment of $100 billion in climate finance, and utilising cross-border mechanisms like sovereign guarantees. A major drawback of COP27 and previous Climate conferences is a lack of an accountability framework to hold the developed countries accountable individually for failing to follow through with their commitments.
While the “loss and damage” fund is a ground-breaking achievement of COP27, we must remember that loss and damage only follow our inaction towards “mitigation.” We need to invest much more in mitigating and reducing carbon emissions to control climate change calamities.