Rich countries missing $100bn climate finance commitment: Report

*Between 2013 and 2018, share of loans in total public finance provided grew from 52% to 74%, while share of grants saw a decline ─Organisation for Economic Cooperation and Development

Isola Moses | ConsumerConnect

Following slowdown in funding as a result of US President Donald Trump’s earlier threat to pull his country out of the global Paris deal, wealthy economies now risk missing their objective of providing $100 billion a year by 2020 to help poorer nations in combating climate change.

ConsumerConnect learnt that climate finance from developed countries reached $78.9 billion in 2018, said to be far short of the target agreed in 2015 by 197 countries as part of the Paris Agreement.

According to a recent Organisation for Economic Cooperation and Development (OECD) published study, even though climate finance rose 11% in 2018 from $71.2 billion in 2017, it was at a slower growth rate than seen in 2016 to 2017.

Angel Gurria, OECD Secretary-General, said: “Donors need to urgently step up their efforts to support developing countries to respond to the immediate effects of the pandemic and to integrate climate actions into each country’s recovery from the COVID-19 crisis to drive sustainable, resilient and inclusive economic growth.”

Likewise, genuine efforts were said to have also been derailed by Trump’s decision to stop $2 billion of payments to the United Nations’ Green Climate Fund, the world’s largest international finance effort dedicated to addressing climate change.

The US had previously been one of the biggest climate donors before Trump took office in 2016.

In terms of the key numbers from the research, report states that the level of private climate finance mobilised was virtually flat in 2018, at $14.6 billion.

Over a third of total climate funds from 2016-18 was for energy, whereas 14% went to transport and storage.

Asia also benefited from 43% the of total between 2016 and 2018, while Africa got 25% and the Americas 17 percent, according to report.

Early 2019 data from the European Union (EU) and its member states, who provide the biggest chunk of money, shows direct country-to-country climate finance may have continued to increase last year, the OECD said.

The organisation confirmed this development provides some signs that the target remains in sight.

Meanwhile, countries are increasingly choosing loans over grants to provide climate finance.

Specifically, between 2013 and 2018, the share of loans in total public finance provided grew from 52% to 74%, while the share of grants saw a decline, the report said.

However, that approach has been criticised by the charity Oxfam, because recipient countries end up having to pay significant amounts in loan repayments and interest.

The OECD report estimated that as a result, climate finance in 2017 was just a third of that reported by developed countries.

Tracy Carty, Senior Policy Adviser on Climate Change at Oxfam, stated that “it is particularly unjust that a paltry 14% of climate finance is going to the least developed nations and just 2% to small island developing states, which have done least to cause the climate crisis, but are being hit hardest.”