Lengthy, complicated application process a major hurdle for many countries
Countries with the highest vulnerability to climate change have missed out on finance for adaptation through the Green Climate Fund (GFC), a new study showed. Most of them are in Africa, particularly in regions affected by conflict.
The lengthy and complicated processes to access funding are among factors behind this gap, the report published this month in the journal Global Environmental Change noted. The study was conducted by scholars at the Ludwig Maximilian University of Munich.
Climate finance has been a recurring theme in international climate policy discussions, and it stems from the premise of historical responsibility — that wealthy industrialised nations emitted a bulk of the greenhouse gas emissions currently accumulated in the atmosphere, and they are morally bound to fund poor nations’ efforts to achieve low-carbon development.
The chorus escalated last November at the 26th Conference of Parties (CoP 26) to the United Nations Framework Convention on Climate Change (UNFCCC) in Glasgow, United Kingdom. Developing countries called out wealthy nations on their failure to deliver the $100 billion goal promised over a decade ago.
In October 2021, just prior to CoP26, the environment ministries of Canada and Germany tasked with publishing an update on the goal reported that it would be met by 2023.
Beyond the conspicuous missed targets, climate finance has been plagued with problems of non-transparency, dubious categorisations of diverse funding under the ‘climate’ banner and a greater proportion of loans versus grants (that can catch a developing nation in a ‘climate debt trap’).
One of the largest vehicles for climate finance connected to the UNFCCC is GCF, which was born out of the Copenhagen Accord of 2009. It offers financing through “a flexible combination of grants, concessional debt, guarantees or equity instruments”.
And part of its mandate is “to invest 50 per cent of its resources to mitigation and 50 per cent to adaptation in grant equivalent”. At least half of its adaptation resources must be invested in the most climate vulnerable countries (small island developing states or SIDS, least developed countries or LDCs, and African States).
This makes 154 countries eligible for funding, of which 84 received $2.5 billion GCF adaptation funding between 2015 and 2019, according to the new study. Since 54 per cent of the funds went to countries who are LDC, SIDS and / or African countries, the GCF met its mandate.
However, deeper analysis revealed that categorisations like SIDS, LDC and others did not represent climate vulnerability adequately. The researchers ranked all GCF-eligible countries in terms of global vulnerability indices and found 16 of the 37 countries most vulnerable to climate change did not receive GCF funding. Many of these are countries facing violent conflicts like Afghanistan.
Institutional capacity is another factor. Countries compete for funding by submitting proposals in adherence to complicated sets of guidelines and criteria. But many of the vulnerable countries suffer from “poor governance, weak institutions and a lack of financial and human capacities in their administrations”.
Countries with higher government capacity to prepare strong proposals experienced greater success in the competition for funds, while countries like Eritrea, Somalia or Yemen with weaker capacity have not been able to access funding.
A combination of high vulnerability, poor governance and often violent conflict are major barriers, the researchers conclude, which can be addressed through a “simplified approval track”.
Charity organisation Oxfam found that only a fifth (20.5 per cent) of all climate financing went to LDCs overall in 2017-18, and just three per cent to SIDS.
The UN Environment Programme expects annual adaptation costs in developing countries to reach $140 to 300 billion per year by 2030, and $280-500 billion by 2050.
Complex and competitive application processes entrap vulnerable countries in a cycle where their inability to access funding deepens their conditions of poverty and poor development – a wider symptom of the predatory modern financial landscape that goes beyond multilateral funds.
Read our complete coverage of CoP26 here.
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