For a finance goal fit for 1.5°C, now is the time for pragmatism and courage

“To every thing there is a season and a time to every purpose under the heaven,” runs the ancient adage turned into anti-war lyrics by American singer and social activist Pete Seeger. “A time to laugh, a time to weep…”

When countries adopted the Paris Agreement in 2015, it was a time for tears of joy.

The moment was profound, establishing an aim — if governments remained committed — to limit global warming to 1.5 degrees Celsius. This was a necessary triumph for developing countries whose champions worked tirelessly to get others on board. For these nations, 1.5°C would already be a grave challenge, but their continued existence could be ended by a breach of this limit.

The target was set in the face of uncertainty. It was the right thing to do, despite it being uncertain that 1.5°C would be delivered. A five-year cycle would allow countries to progressively ratchet up ambition so that one day the collective commitments might meet the target.

The necessary finance for the target was not guaranteed in 2015 — neither were the requisite policies, technology, economics, or political will. Nevertheless, the Paris Agreement established a basis to build those necessary conditions over time. As such, in targeting 1.5°C, countries demonstrated a certain courage.

This year, while agreeing on the new climate finance goal, countries must embody a similar courage to help finance 1.5°C.

The finance goal must be set ambitiously, based on the needs of the 1.5°C target. It cannot be set on the basis of the low ambition shown under the $100 billion. Taking today’s scant political will as a constant is a surefire way to ensure that we will kill chances of limiting global warming to well below 2°C, let alone 1.5°C.

Rather, the target must be set by working back from what is necessary — with the expectation that, if given a goal, progressives can work to make delivery progressively more politically feasible over time.

Those in Paris understood the wisdom of setting a guiding star for ambition to journey toward.

Pragmatism necessitates a financial goal that is more ambitious, not less. Being pragmatic means recognising the world as it is. According to a recent study, servicing debt is absorbing 41.5 per cent of budget revenues, 41.6 per cent of spending and 8.4 per cent of gross domestic product (GDP) on average across 144 developing countries, where significant emissions reductions are needed and necessitate support.

We must see, therefore, there is limited space for further debt there. As we are reminded, for many finance ministries in the Global South these days, even multilateral development bank (MDB) lending rates are often too high — simply expanding MDB finance does not cut it.

What is required is the provision of large-scale, grant-equivalent finance, whether concessional or debt-free.

The developed countries are high-income economies responsible for over $50 trillion in GDP. However hard the developed countries may feel it is to do public spending, developing countries have it harder, by definition — which is why, to ensure 1.5°C, the former must step up.

Pragmatism is recognising that a climate emergency requires exceptional spending. A recent report by think tank Bruegel suggested that the G7 and European Union may have to spend around half a percent of their GDP per year just to support developing countries in a just transition away from coal to renewable energies — if other areas are included, financing needs taken together arguably call for multiples of this, reminiscent of the United States’ post-WWII Marshall Plan levels of spending

Continuing business as usual and proposing a weak climate finance goal would be tantamount to abandoning 1.5°C. And we are not ready to give up on 1.5°C — we cannot. Lives, communities and societies are at stake, as is intergenerational equity under international law.

What would developed countries’ decision-makers tell their grandchildren? That we could not set a climate finance goal commensurate with a safe climate future? That we gambled the future of the world on questionable assumptions about the ability of developing countries to absorb market-rate loans? That we were so fixated on blaming others that we neglected our own responsibilities?

Even if developed countries are concerned about countries not shouldering their fair shares of the financial burden, they must not let that stand in the way of obligations to agree to a new goal at the 29th Conference of Parties (COP29) to the United Nations Framework Convention on Climate Change. Spaces may be established for further dialogue after COP29.

Baku must recall the spirit of Paris, or it may go down in history as an even darker moment than Copenhagen, imperilling the future of climate commitments, the Paris Agreement and the multilateral regime.

A new climate finance goal of annual provision of over a trillion in public finance is needed, and the political constituencies recognising this must come together within developed countries post-COP29 to deliver the goal.

To paraphrase one American politician, we must believe in what can be, unburdened by what has been. COP29 must face the unknown and point the way toward the world we want. Now is the time to say not what is expedient but what is necessary — a time for courage.

Iskander Erzini Vernoit is director at the IMAL Initiative for Climate & Development; Alejandra Lopez is director at Transforma and Sindra Sharma is senior advisor at the Pacific Island Climate Action Network

Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth