Report launched right before the international summit on New Global Financial Pact in Paris
The Global South needs additional and concessional finance flows for climate mitigation, adaptation and loss and damage, according to a new report by the New Delhi-based think tank Centre for Science and Environment. Climate finance is not going to the countries where it is needed the most.
These countries face the highest climate impact and need finance for climate transition to help them develop, without adding significantly to the stock of greenhouse emissions. The current climate finance is inadequate, and ‘additionality’ for funds is crucial — existing pools cannot be repackaged via creative accounting, said CSE’s latest report — Beyond Climate Finance.
The report was launched at a recent webinar on June 19, 2023 and was addressed by global experts. The report preceded a two-day summit for a New Global Financial Pact, which will kick off in Paris, France on June 22, 2023.
Losses and damage due to climate change are largely concentrated in the countries of the Global South. These are also the countries that need finance for climate transition to help them develop without adding significantly to the stock of greenhouse emissions, the report said.
However, the Global South countries face financial obstacles that hinder their climate ambitions, like a growing debt crisis. Many low and middle-income countries pay more in annual debt servicing costs than what they would need to spend annually to achieve their nationally determined contribution goals, CSE added.
CSE Director General Sunita Narain said at the webinar:
We agree that the $100 billion a year pledged in 2009 is too little, too late. But what we do not know and rarely discuss is that whatever is being given in the name of climate finance is not concessional — in the period 2011-20, only about 5 per cent was given as grants and the rest were loans or equity.
“Developing countries also face prohibitively high costs of capital, particularly for green technologies, which hinders the economic attractiveness of clean energy investment in these countries, even if they possess rich renewable resources,” said Avantika Goswami, programme manager, climate change, CSE and co-author for the report.
Only 16 per cent of total climate finance can be termed as concessional – money given on favourable terms such as grants or low interest loans. The money that is flowing towards climate projects is heavily concentrated in North America, Western EU and East Asia (predominantly China), said Goswami.
This is where most of the growth in clean energy investment has been concentrated as well. So, the money is not going to the poorest, most vulnerable countries. Emerging economies and developing countries (other than China) will need US $1 trillion in external finance by 2030, she added.
On June 22-23, France is hosting a summit for a New Global Financing Pact in Paris “to build a new contract between the countries of the North and the South to address climate change and the global crisis”.
This offers an opportunity for civil society and scholars to strongly put forward a case for the urgent systemic reforms that the Global South needs. Goswami will be covering the summit for Down To Earth.
We are a voice to you; you have been a support to us. Together we build journalism that is independent, credible and fearless. You can further help us by making a donation. This will mean a lot for our ability to bring you news, perspectives and analysis from the ground so that we can make change together.
In 2009, developed countries committed to mobilising $100 billion per year by 2020 to support climate action in developing countries. The goal has not been met yet. Photo: iStock.png)
Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.