Climate finance fiasco… Mirza Mujtaba Baig
All hopes for significant climate finance have been dashed. The Finance COP, touted as a lifeline for vulnerable nations, has proven to be a funding fiasco. From its inception, it was plagued by ominous signs, ultimately revealing the extent to which an internal decision of a superpower can undermine global efforts to avert a climate catastrophe.
While some may argue that something is better than nothing, this is not merely a matter of economic need. The survival of 8 billion people hangs in the balance. A climate catastrophe knows no borders and will indiscriminately wipe out everything in its path.
As delegates from across the globe converged on Baku, ominous clouds began to gather on the horizon. A research organisation exposed the host country’s insidious tactics: hiring social media activists to paint a rosy picture of the upcoming global congregation. The facade shattered further when a high-ranking summit official was caught red-handed, hawking fossil fuels to unsuspecting nations.
The audacity reached new heights when influential dignitaries, blinded by greed, dared to label fossil fuels a “divine gift”. This irreverent claim ignited a firestorm of protest from the most vulnerable and affected countries. Yet, their desperate cries, like those of the past, were met with deafening silence, dismissed as mere whispers in the wind. This time, however, the script was about to change.
As the story was winding down, a tense negotiation began between the victims and the emitters. Near the end, an abrupt figure of $250 billion was mentioned in the media. While many big powers were reluctant, citing various reasons, the overall consensus was to promise this amount towards the total climate pledges of over $5.7 trillion. This decision was met with harsh criticism from civil society and climate leaders in the Global South, who demanded at least $1.7 trillion to start implementing their national climate action plans.
Finally developed nations have agreed on a $300 billion New Collective Quantified Goal (NCQG), a not much widely acceptable figure to be provided as aid. This amount, however, is separate from the funds mobilised from private sectors and financial institutions. Compared to the Global South’s total Nationally Determined Contributions (NDCs), this pledge falls short by 90%. Furthermore, it represents nearly 20% of global fossil fuel subsidies. This meager commitment highlights the challenge of transitioning away from a deeply ingrained and economically crucial fossil fuel sector.
Proponents of the idea that climate change is a natural phenomenon often cite the adage of the glass half full instead of half empty. They argue that the new climate pledge of $300 billion is a significant increase from the previous $100 billion goal. However, it’s important to note that the previous pledge was not only missed by two years but its continuation also remains uncertain. Additionally, the new pledge lacks a concrete mechanism to ensure its regular fulfillment by 2030.
This lack of a robust implementation plan suggests that many affected nations may struggle to meet their Nationally Determined Contributions (NDCs). While some may view the increased pledge as a positive step, it’s crucial to recognise that the overall scale of the global climate crisis demands far more ambitious action.
Early on, the approval of carbon market quality standards marked a significant development. This move could be strategically beneficial for Global South leaders and their supporters, as it can be framed as a major support for the region. Proponents argue that well-regulated carbon markets have the potential to address the climate finance needs of vulnerable nations.
While this could indeed provide a valuable revenue source if implemented effectively, it also raises concerns. Critics argue that such markets allow major emitters to continue burning fossil fuels by purchasing carbon credits generated by the Global South. This means that the most affected regions may inadvertently grant permission to wealthier nations to further increase their greenhouse gas emissions, simply by offsetting them with payments derived from fossil fuel industries. The question remains: is this a truly equitable and sustainable arrangement?
The deadline for meeting the new climate pledge and the mechanism for releasing funds to the most vulnerable and affected countries remain unclear. Also, questions linger about the governance of the NCQG. Will it be jointly supervised or managed by the GCF and GEF, or will a new arrangement be implemented? Additionally, the criteria for categorising the most affected and vulnerable countries based on risk levels remains ambiguous.
There are widespread concerns that the Green Climate Fund (GCF) will continue to allocate small sums to mitigation and adaptation projects, while the distribution mechanism for larger amounts will remain slow and inefficient. This could have dire consequences for vulnerable countries heavily reliant on grants, rather than loans. Unfortunately, the list of such countries in the Global South is extensive, leading to fierce competition for limited new pledges that are insufficient to implement the NDCs of any single country. Moreover, climate finance mobilised through the private sector and financial institutions is less appealing to countries already burdened by heavy foreign debts.
Despite the gloomy conclusion of this eagerly awaited global event, it is quite encouraging that all the nations of the world participated in it. More significantly, civil society and the scientific community remained very vibrant. The huge number of young people present is another positive sign that the coming generation is not ready to inherit an unrepaired world. It is also worth noting that this is the only global forum that can ensure global action to combat climate change.
It’s not the forum or its administrative unit, the UNFCCC, that has any shortcomings. The problem lies with a club of a few global elements, including big powers and corporations, with deep-rooted interests in the global energy sector. They understand the high cost of retreating from fossil fuels to switch to renewable energy. That’s why they’re using every trick to slow down the mitigation process. However, they are well aware that no trick can halt the warming of the planet caused by burning fossil fuels.
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