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Long-term climate finance -- still a long way to go

  • Published at 01:19 pm January 19th, 2020
Climate finance
Representational image Bigstock

While there is no climate action without climate finance, yet another Conference of Parties (COP) came to an end without assuring any concrete decisions on how developed nations intend on scaling up and mobilizing financial support to developing countries. After a rather lengthy and possibly unsatisfactory series of meetings at the 25th Conference of Parties (COP25) in Madrid, debates regarding issues of climate finance, especially surrounding long-term climate finance (LTF) and the pledge of $100 billion, still remain unresolved.

As we have already stepped into the new year, it is important to acknowledge that the year 2020 holds special significance for climate finance in international climate change negotiations. In this regard, one of the main issues to revisit is the pledge made by developed countries to jointly mobilise $100 billion per year by 2020 to address pressing mitigation and adaptation needs of developing countries. This was agreed upon at the meeting of the UNFCCC in Copenhagen in the year 2009, and since then has become one of the consistent elements of global climate negotiations. And when the Paris Agreement was adopted in 2015 the Parties confirmed this goal, called for a roadmap for achieving the goal by 2020 and agreed to set a new collective quantified goal from a floor of $100 billion per year before 2025.

In addition to this, 2020 is also an important year for the process of long-term climate finance (LTF). To understand LTF a little better we need to go back in time and enter the negotiation rooms of COP17 where talks about the launching of a work programme for long term climate finance were initiated. These conversations went on for another year, before the work programme on LTF was finally completed in the 19th Conference of Parties (COP19) held in Warsaw. Decision 3/CP.19, included activities on LTF for the period between 2014 to 2020. The idea behind the process of long term climate finance aimed at enhancing the mobilization of climate finance from a wide variety of sources, including public, private, bilateral and multilateral entities. The work programme listed a number of key items, such as biennial submissions by developed country Parties on their plans and approaches for scaling up climate finance from 2014 to 2020, in-session workshops to facilitate better discussions on long-term climate finance and biennial high level ministerial dialogues on the topic of climate finance. In addition, the work programme also includes an annual COP decision, where Parties get the chance to assess the progress of climate finance and its overall accessibility and effectiveness. 

"When it comes to climate finance, COP25 proved to be rather futile"

COP 25 was no exception to this. While most of the discussions surrounding climate finance were about mobilizing and scaling up financial support, the conference also touched upon the usual set of standing items on climate finance, including the LTF and the state of the $100 billion pledge. 

Considerable debate ensued around the future of LTF on whether to extend the work-programme beyond post-2020. Led by the G77 and China, a draft decision text supporting its extension was proposed, but it could not be adopted due to a lack of agreement between Parties. One of the reasons for this was that several mechanisms similar to LTF were replicated at the recent Katowice conference in 2018 and in light of that, continuing the LTF in parallel would seem like a redundant affair. Another idea put forward was to bring the LTF under the Paris Agreement going ahead. However, this was subject to dispute as it also its pitfalls. With the Trump-backed administration intent on leaving the Paris Agreement, retaining LTF as an ongoing agenda item at climate negotiations could help ensure that the US government still remains in discussions around climate finance. Without consensus on the matter, rule 16 of the UNFCCC Rules of Procedure was eventually applied, and it was decided that the matter of LTF will now be considered next year at COP 26 in Glasgow.

In regard to the $100 billion pledge, now that the deadline for 2020 is nearly here, there was some discussion about the creation of a new finance goal. Developing countries stressed on the need for scaling up adaptation finance and called on the Standing Committee on Finance (SCF) to assess the progress made by developed countries in mobilizing USD 100 billion annually. This request was opposed by developed countries, as they observed a duplication of the SCF’s work on biennial assessments. All in all, COP 25 did not reach any tangible decision on the issue of raising this pledged fund and securing it for the long-run. 

When it comes to climate finance, COP25 proved to be rather futile, as negotiators left the fate of some of the key agenda items in a state of limbo. The need to conclude unfinished business from the previous conference places a lot of burden on the upcoming climate summit. Especially considering this is the year when all countries will be required to submit their new long-term goals on climate action, which will justifiably be quite high on the agenda. The world now has its eyes firmly set on Glasgow, as it waits in anticipation with fingers crossed.

Shababa Haque is an environmental researcher working on climate change adaptation at the International Centre for Climate Change and Development (ICCCAD).

Riadadh Hossain is a researcher at the International Centre for Climate Change and Development (ICCCAD), primarily working on climate finance and tracking and measurement of adaptation interventions