Could this month’s UN climate conference be the catalyst to get the world back on track?
Climate action cannot stop, despite the cancellation of high-level climate meetings due to Covid-19. When the time comes to rebuild our economies, we must focus on achieving the goals set out in the Paris Agreement.
Could this month’s UN climate conference be the catalyst to get the world back on track? The national lockdowns caused by the Covid-19 pandemic led to many meetings on climate change being cancelled in 2020, including the UN COP26 climate conference and the June technical meetings ahead of that conference. Consequently, the opportunities to advance discussions on climate finance have reduced dramatically this year.
That is why the decision by the UN Framework Convention on Climate Change Secretariat (UNFCCC) to hold the June Momentum on Climate Change online at the beginning of this month was so welcomed. This was an eight-day event on climate action aimed at continuing cooperation throughout the pandemic, and advancing solutions to the climate crisis.
The rallying call from countries, the UNFCCC secretariat and climate activists alike was that climate action cannot stop, and that when the time comes to rebuild our economies we must all focus on achieving the goals of the Paris climate Agreement.
Country representatives made several compelling statements reminding each other to remember climate action when developing recovery plans. Developing countries made it clear that they are not in a position to accept market-rate loans, yet need climate finance to tackle ongoing climate impacts. Meanwhile, multilateral banks shared ideas on using long-term climate strategies as frameworks within which to make finance systems compatible with achieving the Paris Agreement’s goals.
Some developed countries reaffirmed their commitment to contribute their fair share of the $100bn USD global climate finance goal, for instance the UK and Germany. However, much of this finance is being provided as loans, the value of which is being over-reported and counted against other finance commitments, including official development assistance (ODA). Plus, not enough finance is going to adaptation activities or to least developed countries, which are particularly vulnerable to climate change.
But did the right people take part?
The UNFCCC estimates that a staggering 12,000+ people took part in this event. But the question remains - how many of those participants represented finance ministries or their cabinets? And if they were there, how many of them took part in the non-finance events?
It’s incredibly important for finance ministries to hear directly from vulnerable communities about why they urgently need financial support, what they use that support for, and when they need it. Yet too often we have seen finance ministries underrepresented in non-climate and/or sustainable finance specific events, and this event was probably no different.
It’s imperative that finance ministries start taking part as a matter of course. Not all of them do, and fewer still take part Doing so will allow them to acknowledge what the priorities of developing countries are, which should help drive home the importance of providing financial grants to adaptation measures and to address losses and damages caused by extreme climatic impacts.
This is especially relevant in 2020, when the first phase of the global climate finance goal is set to end. Whilst this goal was extended to 2025, many countries haven’t yet made it clear how they will implement this extension at a national level. Formal discussions on a new global climate finance goal (post-2025) were supposed to start at COP26 (November 2020), which has now been postponed to November 2021. Leaving many to question what the future of climate finance will be post-2020.
Where must we go from here?
Country representatives are expected to gather in Bonn this October for formal negotiations, after the annual summer UNFCCC technical and scientific bodies' meeting was postponed. Whilst this will likely be the first physical meeting in 2020, it won’t be the first time that country delegations discuss efforts to tackle climate change. Meetings are and will continue to take place virtually throughout the year to try and advance negotiations.
Going forward, developed countries and multilateral banks and funds can’t forget the calls from developing countries for increased, equitable, and predictable climate finance.
Given the importance of 2020 for achieving the existing US$ 100 billion international climate finance goal, developed countries’ recovery plans must include a climate finance support fund, and these countries must also outline how they will continue contributing to the goal at a national level between 2020 and 2025.
Frontline communities in developing countries are simultaneously experiencing two severe crises and so grants and concessional loans must be prioritised to reduce the risk of further debt stress.
Now more than ever, climate finance flows must be new and additional to existing finance commitments, and a greater amount must be channelled to adaptation activities and to address losses and damages. The last economic crisis (2007-2008) led to approximately US$ 500 billion being invested, largely in renewable energy, energy efficiency and sustainable transport. International finance for adaptation and to address loss and damage missed out on benefiting from this pot of investments. This cannot be allowed to happen again.
The pandemic also brings into question the ability of the global financial system to respond equitably, to global crises. As a matter of urgency, access to climate finance needs to be improved, particularly for regional and local authorities. Multilateral banks and funds must also be a part of this conversation on accessibility to finance. Options shared by multilateral banks to achieve this include delegation of authorisation within financial institutions to speed-up disbursements.
A better option would be to offer debt relief, ideally through cancellation of upcoming external debt payments, including to private creditors. This should be coupled with new and additional, concessional or grant financing. As a short-term option, this allows developing countries to free-up existing government resources and ensure access to urgent finance to use during crisis situations, by reducing their financial outflows. The UNFCCC showed the need to address the climate crisis remains urgent. Those in power must listen and act – now more than ever.