Cash strapped and desperate? COP28 casts climate finance in sharp relief
As week two of the UN climate summit begins in Dubai delegates, hosts and analysts are weighing up the early achievements – but numbers still don’t add up.
Opening on 30th November, COP28 has courted scandalous headlines since the first guests arrived in the United Arab Emirates (UAE). But despite the negative press, there have already been several significant wins.
Last week, Environment Journal reported on the new loss and damage fund that had at last been finalised after years of negotiations. The idea being to ensure that countries bearing the brunt of the climate crisis have immediate access to emergency financing to help with urgent support, clean up and recovery costs.
Not before time, the scheme is significant for more reasons than the ‘insurance’ it looks to offer. Many believe the initiative could become a strong bargaining chip for smaller and less economically powerful countries to strike climate-aligned deals with the wealthy and largely north and western hemisphere nations that are promising to funnel cash into the system.
However, the details of where that money is coming from, and when, remains thin on the ground, with analysts warning that leaders have to be realistic and see this as an entirely new commitment and not redirect resources from elsewhere into the programme. Then there’s the actual amount that as been tabled. So far, $700million has been earmarked for the initiative, which is around 0.2% of the total annual bill for climate change-related disasters and events. Ian ‘good year’, this can mount to $100billion, but worst case scenarios have currently been topping out at $580billion, with a November study putting the daily costs of the climate crisis at $391million and counting.
In total, some $83billion of supposedly new capital has been ‘mobilised’ during the first week of COP28, including the World Bank increasing its climate funding to 45% of total lending, or $9billion annually, and $2billion from the Development Bank of Latin American and the Caribbean per year until 2030. The Philippines, meanwhile, will get $10billion from the Asian Development Bank over the next five years, and Japan and France are backing a plan by the African Development Bank to leverage IMP Special Drawing Rights for climate and development.
The UAE’s banks have also pledged $270billion in green finance, with $30billion of the state’s own money to kick things off. This will help support research and development of technologies and innovations within the climate space. And we certainly need to see some serious leaps and bounds as a result. Nevertheless, the fact this kitty, which is essentially for unproven, experimental, and exploratory projects, is already worth more than 30 times the one that’s supposed to help the most vulnerable populations on the planet live with a problem they have contributed very little towards, speaks volumes about where our priorities are. Not to mention the ongoing lack of equity.
Of course, the Emirati interests in pushing forward with new concepts and designs that can help mitigate climate damage is no surprise – as one of the largest producers of fossil fuels in the world, why would the state not want to see if throwing some of its abundant petroleum money at the problem won’t deliver a solution that can allow for the continued extraction of oil and gas, for the time being at least, without the sky high emissions bill. And they’re not alone, with a vast number of nations, the UK and US included, increasingly pegging hopes on carbon capture and storage systems (CCS).
All of which leaves one huge elephant in the room as week two begins in Dubai. On Tuesday, a draft text was published for the historic commitment many have been waiting a very long time for – the phase-out, or wind down, of fossil fuel use. While the wording as presented is binding and, if signed, would commit to ending oil and gas, there is high probability of a rewrite, with Saudi Arabia, home to the world’s second largest fossil fuel reserves, attempting to include CCS references into the agreement at any and all opportunities. All eyes are now focused on the next seven days, then, and we wait with baited breath.
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