Developed nations must mobilise $100 bn for climate financing: OECD - Business Standard
Developed nations must mobilise $100 bn for climate financing: OECD
Climate finance provided and mobilised by developed countries for climate action in developing countries reached $ 89.6 billion in 2021, according to the OECD's sixth assessment of progress towards the goal for developed countries to provide and mobilise $ 100 billion of climate finance annually for climate action in developing countries under the UN Framework Convention on Climate Change.
This shows a positive trend, representing close to an 8% increase over 2020, which is significantly higher than the 2.1 per cent average annual growth observed from 2018 to 2020. However, one year after the 2020 target, developed countries remain just over $ 10 billion short of the goal to mobilise $ 100 billion a year.
Two years ago, ahead of COP26 in Glasgow, the OECD released forward-looking scenarios of climate finance for the period 2021-2025, which indicated the goal is likely to be reached as of 2023. The $ 89.6 billion total for 2021 is slightly higher than the upper-end scenario that was estimated for this year. On the basis of preliminary and as yet unverified data available to the OECD to date, the goal looks likely to have already been met as of 2022.
"The overall upward trend is positive and shows that countries are continuing to increase action to scale up and mobilise climate finance. The increase needed to reach the $ 100 billion goal that was set for 2020 has not yet been achieved, but preliminary data available to the OECD indicates that countries look likely to have met that objective ahead of 2023," OECD Secretary-General Mathias Cormann said. "Of course, developing countries urgently require these significant investments so climate finance providers need to continue to ramp up their efforts in line with their stated commitments."
Over 2016-2021, the share of climate finance targeting lower-middle-income countries (LMICs) and upper-middle-income countries (UMICs) remained stable, whereas the share targeting low-income countries (LICs) increased from 4 per cent in 2016 to 10 per cent in 2021. The share of climate finance targeting small island developing countries (SIDS) progressively increased from 2 per cent in 2016 to 4 per cent in 2021, and the share targeting least developed countries (LDCs) progressively increased from 12 per cent in 2016 to 25 per cent in 2020, dropping to 20 per cent in 2021.
These trends may indicate an increasing recognition by international climate finance providers of the growing needs and opportunities for climate action in poorer and more vulnerable regions.
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Public climate finance (bilateral and multilateral) almost doubled over the 2013-2021 period, from $ 38 billion to $ 73.1 billion, accounting for the vast majority of the total $ 89.6 billion in 2021. Within that amount, multilateral public climate finance grew the most, more than doubling since 2013 and overtaking bilateral public climate finance from 2019. Volumes of officially supported climate-related export credits increased by 28 per cent over 2013-2021 but remain small and relatively volatile year-on-year.
Mobilised private climate finance, for which comparable data are only available from 2016, amounted to $ 14.4 billion in 2021, thereby returning to its 2019 level after a dip in 2020. This component, however, displays an overall stagnating trend since 2017.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”