Data indicates that wealthy nations have achieved their goal of providing $100 billion in climate finance, but it was accomplished two years after the initial target date.
After two years past the deadline, data released on Thursday reveals that the pledge made by wealthy nations to provide $100bn (£80bn) annually in climate finance to underdeveloped countries has been fulfilled.
In 2021, the Organisation for Economic Co-operation and Development reports that developing countries received approximately $89.6 billion. Based on preliminary data from the OECD, this amount is expected to have surpassed $100 billion in 2022.
The number for 2021 showed a growth of 8% compared to the $83 billion in 2020, which fell within the higher range of OECD predictions. This has instilled confidence in the organization that the figure for 2022 will exceed $100 billion (although not all of last year’s climate finance can currently be included).
The report predicts that the amount delivered this year will most likely exceed $100 billion.
In 2009, at the Copenhagen climate summit, wealthy nations pledged to provide $100 billion annually to assist underprivileged countries in reducing their greenhouse gas emissions and adapting to the consequences of the climate emergency. However, it became clear over the years that they would not be able to fulfill this promise by 2020.
The failure has caused stress in international discussions about climate change. Less affluent nations have accused wealthier nations of being unreliable, while the wealthier nations have cited challenges in obtaining and distributing funding.
Demonstrating the fulfillment of the promise will greatly benefit the Cop28 UN climate talks, scheduled to begin in Dubai two weeks from now.
Canada’s climate and environment minister, Steven Guilbeault, along with Germany, has been tasked by the UN with leading efforts on climate finance ahead of Cop28. Guilbeault stated that the previous failure to meet the target demonstrated a lack of seriousness from developed countries like Canada. However, with the recent news that the goal has been met, he sees it as a significant milestone that will help build momentum for a successful outcome in Dubai.
However, affluent nations also acknowledged that they must take further action.
Jennifer Morgan, a representative for Germany’s efforts on climate change, stated: “While this is a significant progress, it is evident that we cannot halt here. It will take collective action from various parties to secure more financial resources in the future.”
Ani Dasgupta, the leader of the World Resources Institute think tank, expressed that the inability of developed countries to meet the $100 billion target by 2020 has been a major hindrance in UN climate discussions, causing a lack of trust and impeding progress. The recent news that the long-awaited goal has likely been reached is a positive development. This achievement can help restore trust between developing and developed nations, which will greatly contribute to a successful outcome at Cop28.
Several nations will expect wealthier countries to cover the gaps in reaching the $100 billion target for 2020 and 2021, in the near future.
More importantly, the effects and urgency of the climate crisis have grown vastly since 2009 as greenhouse gas emissions have continued to rise, along with global temperatures, and climate impacts are being felt around the world in the form of extreme weather, heatwaves, floods, droughts and sea level rises.
Last year, economist Nicholas Stern’s research revealed that developing countries will require approximately $2 trillion annually by 2030 in order to transition their economies towards a low-carbon system, make necessary adjustments to their infrastructure for extreme weather events, and provide aid and recovery efforts for communities affected by climate disasters.
Guilbeault stated that at the Copenhagen conference, $100 billion was considered a significant amount of money. However, the focus now needs to be on mobilizing 10 to 15 times that amount. This is the collective challenge that we face, but it also demonstrates that progress has been made.
The trillions needed will not all come in the form of overseas aid from developed countries; most will come from the private sector. Most of the money required is already in play, in the form of investment from the private sector around the world, but it is directed at fossil fuels and high-carbon infrastructure, and needs to be redirected towards low-carbon ends.
Avinash Persaud, the climate envoy and negotiator for Barbados, expressed his lack of surprise regarding the issue. As the spotlight intensifies on the inability to fulfill this commitment, previously given grants and loans are now being labeled as climate finance. However, there has not been a $100 billion increase in overseas development assistance.
Furthermore, as we have gradually approached our goal, which is always slightly unpredictable, it has lost its significance. The lack of action from countries to reduce the effects of climate change has resulted in a yearly cost of over $500 billion for addressing loss and damage and building resilience – areas that are not typically funded by the private sector, unlike renewable energy projects. While it is a positive accomplishment that we have reached this point, it is unfortunate that it has taken so long that its primary relevance now lies in being a fulfilled promise.
Sultan Al Jaber, who will lead the Cop28 negotiations and is also the head of the United Arab Emirates’ national oil company, Adnoc, expressed optimism about the recent announcement. However, he believes there is still opportunity for even greater ambition. In order to regain trust, it is crucial for donor countries to fulfill their previous pledges. This includes a robust replenishment of the green climate fund and implementing financing arrangements for the loss and damage fund at Cop28.