Poor countries will need $2 trillion (€1.98 trillion) a year in funding by 2030 to cope with climate breakdown, a new report has warned, as financial issues came into sharper focus at Cop27.
The cash will be needed so climate-vulnerable states can switch away from fossil fuels, invest in renewable energy and other low-carbon technology, and cope with the impacts of extreme weather, according to the report.
Commissioned jointly by the UK and Egyptian governments, it was published at the UN climate talks at Sharm El-Sheikh on Tuesday.
Its projections detail the needs of all of the world’s developing economies except China, and has led to demands that wealthy countries move urgently to scale up international finance for climate front lines, and embark on big reforms to free up capital, especially for the Global South.
The authors, including climate economist Nicholas Stern, acknowledge their figures “are far higher than any climate finance that has yet been forthcoming to help poor countries”.
They conclude half of the money could come from local sources, but that “external finance, as well as the World Bank and other multilateral development banks, must also play a key role”.
The report comes after Barbados’s prime minister, Mia Mottley called on governments from the Global North to back proposals for a new climate mitigation trust that would allow climate-related projects to access the special drawing rights of the International Monetary Fund (IMF).
Climate justice campaigner Mary Robinson, who is chair of independent global leaders’ group the Elders, backed the Mottley proposals on Tuesday as a mechanism to deliver money at low interest levels to the least-developed countries and small island states. She told RTÉ Radio this “solidarity funding” could be part of the climate solidarity pact being proposed by UN secretary general António Guterres.
France is the first developed country to explicitly back the Mottley initiative.
A separate report by Christian Aid Africa due to be released on Wednesday details the devastating economic impact climate breakdown will inflict on the African continent. It concludes 50 of 54 African countries face “a 34 per cent GDP hit” even at 1.5 degrees of global heating – a scenario that is likely before 2050 based on current global emissions.
There has been some progress, however, under the contentious issue of loss and damage for developing countries, with Austria announcing $50 million for climate loss and damage, shortly after Scotland’s first minister Nicola Sturgeon pledged an additional £5 million to support developing countries with direct finance to cope with the impact of the climate emergency.
Five European countries – Austria, Scotland, Belgium, Denmark and Germany – have committed to fund the loss and damage finance mechanism that the US has indicated it wants to avoid.
In what has become the red line for climate-vulnerable countries and climate justice advocates, Harjeet Singh, senior adviser at the Climate Action Network, said: “The US has for decades acted in bad faith with regards to loss and damage, but the delays and deception have real-life consequences. We need to agree on a funding facility at this Cop so we can work on making it operational by 2024, and the US needs to change from being obstructive to constructive.”
Taoiseach Micheál Martin announced an allocation by Ireland of €10 million for a loss and damage initiative known as “Global Shield” to help countries hit by climate-related disasters, but Oxfam Ireland and Trócaire said it was not new or additional funding.
