Biden’s climate financing pledge is welcomed by the developing countries and campaigners in the 76th United Nations General Assembly session on Tuesday. However, increasing finance or allocating money to bring an end to climate catastrophe is synonymous to throwing money at symptoms and not ruling out the root issue.
Thus, rich countries needed to do more to ensure the poorest received the assistance they need along with building a staunch narrative on cutting back emissions and creating reliance on green energy production.
Biden’s climate financing pledge, a panacea to climate problem?
Biden, speaking to the UN general assembly in New York, said he would ask the US Congress to double to $11bn (£8m) a year by 2024 the financial assistance the US offers to developing countries to help them cut greenhouse gas emissions and cope with the impacts of extreme weather.
BIDEN at UN: The ‘Borderless Climate Crisis’ Has Caused ‘Widespread Death’ https://t.co/1UT6dyOVSK
— Sean Hannity 🇺🇸 (@seanhannity) September 21, 2021
Climate finance is one of the biggest issues that is to be discussed at the Cop26 UN climate talks, to be held in Glasgow this November, with developing countries at the conference anxious that a longstanding promise they would receive $100bn a year from 2020 has not yet been fulfilled.
Tina Stege, climate envoy for the Republic of the Marshall Islands, and chair of the High Ambition Coalition at the UN climate talks, said: “Watching Biden’s speech today I thought – this is the announcement we’ve been waiting for. Now we’re looking to Congress to work with Biden to deliver, and to the rest of the G20 to follow suit on finance ambition.”
Simon Stiell, environment minister of Grenada, said: “The announcement from president Biden is the wind in the sails that we needed en route to Cop26. We know that this is bringing us one step closer to the delivery of the $100bn promised by donor countries – and that it will make a tangible difference in countries like mine that rely on this funding to adapt to the impacts of climate change we already feel today.”
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Biden’s climate financing pledge, a road to US climate leadership?
But the US efforts were not likely to be enough, said John Nordbo, of Care International. Given that the US is the world’s biggest economy and second-biggest emitter of greenhouse gases, many hoped for more. “ Biden’s climate financing pledge of an additional $5.7bn is definitely a positive step and it sends a strong signal. Considering where the US was this time last year under the presidency of Donald Trump who iterated that the future is for the patriots not globalist, Biden’s climate financing pledge has taken a 360 degree from this rhetoric and is a leap forward in terms of US climate leadership. However, the reality is that we are still a long way from closing the gap on climate finance commitments,” he said.
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Bridging the climate finance gap is matter of global concern
Though some climate campaigners have called on the US to provide more than $40bn a year, it is undeniable that the climate finance gap is a matter of global concern where all the rich and affluent countries need to seriously commit.
He added: “The climate finance gap is not just an American problem, it is a global problem. Almost all rich countries, apart from Luxembourg, Norway and Sweden, need to commit more.”
Climate finance has been a key pertinent point at the UN talks for more than a decade. In 2009, at the fractious Cop – the conference of the parties to the UN Framework Convention on Climate Change, parent treaty to the 2015 Paris climate agreement – in Copenhagen, where the developed countries agreed that at least $100bn a year would flow in climate finance, from public and private sources, to the poor world by 2020.
However, that totemic target has yet to be reached. On Friday, a report from the Organization for Economic Co-operation and Development (OECD) found that climate finance in 2019, the latest year for which there is accurate data, had reached only about $80bn.
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Biden’s climate financing pledge sets the course for COP 26 negotiations
At Cop26, the developing countries want not only the reassurance that the $100bn target will be fulfilled, but also that negotiations will begin on a new finance regime from 2025, which would ensure they have access to the funds so that they can streamline their economies’ shift from carbon producing to a low-carbon footing and adapt to the impacts of the climate crisis.
For the poorest developing countries, there is a further complication. The bulk of the climate finance provided to date has gone to middle-income developing countries and has been poured into projects that reduce greenhouse gas emissions, such as renewable energy. But many of these projects are profitable and could have attracted finance in any case, from private sources.
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Climate financing or climate adaptation financing?
The priority for the poorest developing countries is to receive adaptation finance, which helps them build resilience and adapt their infrastructure to the effects of extreme weather that are already in evidence around the world.
But funding adaptation projects – such as sea walls, early warning systems, or better infrastructure – is expensive and usually does not produce a tangible financial return, so has been shunned by donors in favor of easy wins elsewhere.
Though Biden’s climate financing pledge appears lucrative, the big challenge is to help the developing countries to adapt their infrastructure to green energy production and new green projects. This is a more arduous and challenging task, campaigners say.
Some climate adaptation projects, such as restoring mangrove swamps or wetlands, can also reduce greenhouse gas emissions and protect nature, so many countries have been pinning their hopes on gaining finance for “nature-based solutions” at Cop26, but this too has been slow to arrive.
Stege, of the High Ambition Coalition, which brings together developed and developing countries in support of the Paris agreement goals, said: “Hearing the US recognize the importance of adaptation is heartening, given the calls we’ve heard from so many, including the UN secretary general, on the need for parity between [money for emissions reduction] and adaptation financing.”
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Climate financing, a loan or a grant?
There are also concerns that some of the climate finance provided has come in the form of loans rather than grants, which can push poor countries deeper into debt, and some of it has come from existing development aid budgets, which means countries are losing out on funds for education, health and other public goods. Thus, questions are raised whether Biden’s climate financing pledge will be a loan or a grant because the former will usher the poor countries into debt trap.
Nordbo said rich countries should come up with further pledges and clearer plans before Cop26. “We are inching forward on this issue, but the problem is that, meanwhile, thousands more people are being displaced or dying,” he said. “Considering how much money these [rich] countries have made from carbon emission-creating industries, not one of them is moving fast enough.”
Hadia Mukhtar is a Pakistani geopolitical analyst with a keen interest in international
relations. Currently she is working as an Sub-Editor at GVS magazine and collaborating
with the GVS International Desk. She holds a graduate degree in Literature in English from
the University of Karachi. She can be reached at hadia.mukhtar92@gmail.com.The views expressed in the article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.