In short COP26 - which ended on 13 November - has not delivered.  It was the first opportunity in two years for climate action negotiations to take place. Yet, it was mired in a lack of civil society access, too much access for the fossil fuel lobby, and not enough recognition of the needs of developing countries, which should have formed the backbone of the climate action negotiations. 

Historically, developed countries have contributed the most to climate change and therefore are the biggest contributors to ongoing climate impacts that are disproportionately felt by developing countries that also have the least resources to tackle them. This imbalance in the responsibility in generating the climate crisis has led to an accumulation of a climate debt that the wealthiest countries have with the global south. In this context, developed countries’ contributions to finance for climate is more than an institutional commitment, it is a moral obligation and a reparation for the enormous climate debt they owe. 

Yet, year after year, developed countries have missed the current global climate finance goal of US$100 billion per year. Indeed, developing countries need between US$5.8-5.9 trillion by 2030 just to carry out less than half of the climate activities identified in their nationally determined contributions (NDCs). It is a matter of urgency that global temperature rise is limited to 1.5°C, but this global climate financing gap is preventing developing countries from carrying out climate action. While there are calls to bring private finance in, that will not be the panacea that fills  in the financing gap, and will more than likely bring additional risks for already overwhelmed developing countries’ public purse. Despite this, no decision was taken on the current global climate finance goal of US$ 100 billion to either be reached immediately, or well ahead of 2025.

Furthermore, the same countries that failed to deliver on climate finance have also failed to facilitate solutions to the growing debt crisis in the global south and to effectively tackle corporate tax avoidance and illicit financial flows. Both increasing debt payments and tax dodging have a crucial impact in reducing the fiscal space and domestic revenues that, beyond climate finance, countries in the global south urgently need to tackle the climate emergency. 

The climate finance goal

In 2015, the current global climate finance goal of US$ 100 billion was extended to 2025. At COP26 countries met to agree a process to set a new collective quantified climate finance goal for the post-2025 period. The last climate finance goal was a political agreement amongst developed countries that was not based on the needs of developing countries. So it was imperative that at this COP a process was carved out that was based on transparency and included the most vulnerable. Ultimately, countries decided to establish an ad-hoc work programme to take this work forward, and will aim to set a new collective quantified climate finance goal by 2024. 

The Loss and Damage failure

Developing countries have been calling for loss and damage (L&D) finance for a very long time. These are climate impacts that go beyond what adaptation efforts can address. Encouragingly, COP26 saw the host country Scotland (United Kingdom) become the first country to pledge to provide finance to address losses and damages - In total, £2 million in new and additional finance for L&D was pledged by Scotland. This was followed by Wallonia (Belgium) pledging €1 million and a group of philanthropists also pledged US$ 3 million. 

However, whilst these are all welcome finance announcements, the former are two sub-national governments, and the latter a group of concerned philanthropic organisations. Plus, none of this financial support is part of a predictable, scalable stream of finance. When framed in this context, it is clear to see that once again, developed countries are not seriously thinking about how developing countries can address ongoing losses and damages. 

Adaptation finance

Developing countries also need finance to carry out adaptation measures, yet decisions taken at COP26 on adaptation finance are not strong. Developed countries are either requested to “consider[...] doubling adaptation finance with the aim of achieving a balance between mitigation and adaptation” finance; or merely urged to at least double their collective climate finance for adaptation from 2019 levels by 2025. 

However, 2019 Organisation for Economic Co-operation and Development (OECD) figures show that adaptation finance amounts to US$ 20.1 billion. So unless developed countries surpass the ‘at least doubling’ aim agreed at COP26, then a doubling would at best achieve $40.2 billion. This is much less than the $50bn minimum that developing countries have been calling for, for years. Additionally, 2025 is much too late, since climate vulnerable communities urgently need adaptation finance now. 

Looking to the future

COP27 will be held in Sharm El Sheikh (Egypt)  7-18 November 2022. This will be the first COP held physically in a developing country since COP22 in Marrakech, Morocco (2016). The Fijian (COP23) and Chilean (COP25) COPs were both held in Europe. So this is an opportunity for developing countries’ priorities to be front and center at a COP.  

If COP27 is to be a success, then developed countries must remember that climate finance is a matter of Equity, not Solidarity. This means that announcements where developed, richer nations frame themselves as ‘charitable donors’ are unacceptable, as many members of civil society have highlighted. Developing countries have contributed the least to climate change, yet disproportionately experience the worst impacts of it. Reparations for the climate debt must be provided to ensure that all countries are able to work to achieve the 1.5°C goal. Finance has to be put on the table for developing countries to adapt to climate change and undertake the just transition to a low carbon economy that is urgently needed.