Climate Finance Shadow Report 2023: Assessing the delivery of the ... - ReliefWeb

Climate Finance Shadow Report 2023: Assessing the delivery of the $100 billion commitment - World | ReliefWeb

SUMMARY

EVEN BY THEIR OWN GENEROUS ACCOUNTING STANDARDS, DEVELOPED COUNTRIES ARE THREE YEARS OVERDUE ON THE COMMITMENT TO MOBILIZE US$100BN PER YEAR. THIS HAS UNDERMINED TRUST IN THE CLIMATE TALKS AND COULD HAVE SERIOUS CONSEQUENCES FOR WHETHER WE ARE SUCCESSFUL IN AVOIDING THE WORST IMPACTS OF CLIMATE CHANGE.

The Sixth Assessment Report from the Intergovernmental Panel on Climate Change (IPCC) states plainly that we are not on track to keep warming below the 1.5o C limit set by the Paris Agreement, with emissions still rising. At the same time, the world is seriously unprepared to deal with the now unavoidable impacts of climate change. The consequences of this inaction manifest as climate change-induced loss and damage. East Africa is experiencing its worst drought in over 40 years, contributing to crisis levels of hunger. In the past three years, India, Pakistan, Central South America, Western North America, the UK, Australia and Siberia have all seen record heat waves and/or wildfires.

In 2022, Pakistan suffered a severe heat wave that was later followed by intense rainfall and flooding between June and August, affecting over 33 million people.

While Pakistan’s monsoon floods caused destruction that affected people of all backgrounds, women and girls bore the brunt of the impacts. These impacts included nearly 700,000 women deprived of maternal healthcare while pregnant. Similarly, in East Africa, six consecutive failed rainy seasons have seen women taking responsibility for survival tasks – from collecting scarce water and food to caring for children and people who are sick – while being excluded from essential decision making that affects their lives. In both cases, and during climateinduced extreme weather events in general, women and girls are at increased risk of gender-based violence, as well as being less likely to receive relief goods and more likely to experience a loss of livelihood compared with men. This contributes to higher rates of socioeconomic insecurity, physical vulnerability and death – death rates for women and children during these events can even be fourteen times higher than those of men. Women are also less likely to be involved in climate action planning, both for mitigation and adaptation, and as a consequence less likely to benefit, often to the detriment of the action’s effectiveness.

International climate finance offers essential support to communities and countries on the frontlines of climate change – to address climate damages, to adapt to unavoidable climate change and to advance low-carbon development pathways. It must be based on principles of local leadership, inclusion, gender equality and women’s empowerment if it is to be effective and leave no one behind.

This year, Parties to the Paris Agreement are carrying out a Global Stock Take on progress in achieving the Agreement’s goals. One element is already clear: the goal set by developed countries to deliver US$100 billion a year in climate finance by 2020 has been missed. Based on the current accounting and reporting practices applied by climate finance contributors, total climate finance was reported as $83.3bn in 2020. While this is a sizeable amount, it falls significantly short of the promise made in 2009, and it is based on accounting practices that do not reflect the actual level of support provided.

Oxfam estimates that in 2020 the real value of financial support specifically aimed at climate action was only around $21bn to $24.5bn – much less than officially reported figures suggest. Urgent action is needed to restore trust and provide much-needed finance, starting with immediately fulfilling the $100bn-ayear goal and making up for the shortfalls in years where it has not been met.

But meeting the goal on paper is nowhere near enough, because how climate finance is provided is as important as how much is provided. This report lays bare how an excessive number of loans, insufficient grants, inadequate funding for adaptation, and misleading accounting practices mean that climate finance is far from fulfilling its purpose. Only a small share of climate finance has gender equality as a principal objective, and only a small share is for locally led climate action. Even worse, in some cases this finance, which should be helping communities thrive despite climate change, is likely harming them in other ways, by increasing debt and taking money from shrinking Official Development Assistance (ODA) budgets.

The stark reality of climate change has strengthened the calls of developing countries for new financial support to recover from unavoidable losses and damages. This led to the agreement at COP27 in Egypt to establish a new fund to respond to loss and damage. Despite being many years overdue, this is an important step, and the fund should be quickly operationalized and adequately provided for. Importantly, the funding should be new and additional to existing ODA and climate finance commitments.

We do not need to wait for the Global Stock Take, which will set the agenda for near-term climate talks, to understand what needs to happen: hugely accelerated climate action. But acceleration will only happen at the scale needed, and in equitable ways, if we also accelerate the provision and mobilization of climate finance and ensure it gets to where it is needed. In line with the ‘polluter pays’ principle, options such as a shipping emissions levy, wealth taxes or an excess fossil-fuel profits tax should be developed as innovative finance sources, particularly for mobilizing finance to support adaptation and address loss and damage. More finance should also be mobilized through the issuance of additional Special Drawing Rights and transferring those to developing countries to support climate action, and through affordable borrowing to fund investment in adaptation and mitigation in low- and middle-income countries without adding to their debt burden.

Talks have started under the UN Framework Convention on Climate Change (UNFCCC) about the new finance goal for the period after 2025: the New Collective Quantified Goal (NCQG), which will take into account the needs and priorities of developing countries, from a floor of $100bn a year.14 This discussion is an opportunity to rebuild trust in the climate talks between developed and developing countries.

If those working on the new finance goal do not learn from the mistakes outlined in this report, they will have failed before they even start. Contributions must become far more transparent, building on clear commitments that allow for accountability. There needs to be a new global public finance goal specifically for adaptation and addressing loss and damage as a component of the NCQG. Public finance is a lifeline for communities on the frontlines of the climate crisis, especially for dealing with climate impacts, and this needs to be acknowledged.

All of this should be built on the foundation of a goal that is needs-based, and that allows for far more local ownership and responsiveness to the needs of communities it is supposed to reach. We are at a critical point for trust in multilateral processes, without which we will not be able to limit climate change, and this is an important step towards rebuilding it.