In the run up to COP29 at Azerbaijan in November this year, there’s one decision that countries are struggling to reach consensus about – the global funding bill.
Close to 200 countries have so far been unable to decide on the size of the annual financing target towards the developing countries that’ll help them fight the increasingly visible effects of climate change.
Talks held in Germany’s Bonn last week did not see any “major breakthroughs,” the media had reported.
This comes on the heels of the previous target – USD 100 billion that the first world countries had to deliver in 2020 – being achieved two years later than the promised time.
All of this has raised questions from climate experts about whether the developed countries are committed enough to helping fight climate change globally.
But why is the global funding bill important and such a matter of contention? The Quint explains.
Global Climate Funding Bill Explained: Should Talk Trillions Now, Say Experts
1. The Big Question: How Much Money Are the Developing Countries Owed?
The Global Funding Bill refers to money that the first world will pay the developing countries to help them reduce their carbon dioxide emissions and cope with climate change and global warming.
According to the United Nations, this responsibility to help the third world adapt falls on the rich nations since they were the ones that contributed to the climate crisis, starting from the industrial revolution back in the day.
But one question that the first world is struggling with is, how much money should they promise?
Pallavi Das, Programme Lead, Council on Energy, Environment and Water (CEEW), speaking to The Quint, emphasises,
“Billions will simply not be enough. Since India's G20 presidency, the language has been to move from billions to trillions. CEEW research shows that India alone will need 10 trillion USD for net-zero transition. And the quantum of finance required is only expected to increase.”
Kavin Kumar Kandasamy, CEO of ProClime, a unified service provider in the climate space, agrees with Das.
He shares that as per estimates, the collective transition to net-zero will require trillions of dollars, all of which “cannot be sourced from the Loss and Damage or through the New Collective Quantified Goal,” he says.
Expand2. For the Developing Countries, Where Should This Money Go Further?
And where exactly does the developing world need to invest this money to better fight climate change?
Das tells The Quint that historically, mitigation has always received more money than adaptation, since mitigation and clean technologies offer business opportunities to different players in the market space.
But now with increasing extreme weather events and rising climate worries, Das says that “investments in adaptation will need to increase to avoid catastrophic impacts on life, livelihoods, and infrastructure.”
“Investments in adaptation are more for the common good, and may not directly lead to a business opportunity. Therefore adaptation finance will need to take centre stage to reduce the vulnerability of the developing countries.”
Pallavi Das, Programme Lead, Council on Energy, Environment and Water (CEEW)Kandasamy, on the other hand, says that the developing countries will have to prioritise their own Nationally Determined Contributions – whether it be for energy transition or other mitigation, adaptation, and resilience activities.
Expand3. Climate Negotiation Has Always Taken Time, but We’re Running Out of It Now
Is there a way to accelerate this process?
Unfortunately, says Das, when it comes to climate negotiations, the progress has always been slow.
"But the window for action is closing rapidly, and the pace has to be ramped up. Developed countries, global forums, and actors around the world will need to deliver on the three pillars of climate action: finance, technology, and capacity-building," he tells the Quint.
"Only with the support from these pillars can developed countries transition and protect themselves from rising climate impacts."
Pallavi DasKandasamy agrees. While he maintains that COP remains the “most balanced forum to reach such consensus” on climate finances, he says that countries in groups like G20 and BRICS should look into climate finance in parallel as well.
As experts are still raising questions about the first world’s commitment to meeting climate goals, Das brings up an important point.
She says that since climate finance does not have a “standard accepted definition,” there are loopholes that can be found. For instance, for the last fund, “the 100 billion USD was supposed to be the floor and not the ceiling,” she emphasises.
For Kandasamy, there’s another worry at hand. With the developing countries continuing to grow, “it would be easy for the developed economies to shy away from any funding or financial commitments.”
“Developed countries have been continuously failing to deliver on their commitments and take responsibility for the climate crisis. Their newest plan to drop accountability for climate change is by increasing the donor base to include emerging markets as donors.”
Pallavi Das(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)
Expand
The Big Question: How Much Money Are the Developing Countries Owed?
The Global Funding Bill refers to money that the first world will pay the developing countries to help them reduce their carbon dioxide emissions and cope with climate change and global warming.
According to the United Nations, this responsibility to help the third world adapt falls on the rich nations since they were the ones that contributed to the climate crisis, starting from the industrial revolution back in the day.
But one question that the first world is struggling with is, how much money should they promise?
Pallavi Das, Programme Lead, Council on Energy, Environment and Water (CEEW), speaking to The Quint, emphasises,
“Billions will simply not be enough. Since India's G20 presidency, the language has been to move from billions to trillions. CEEW research shows that India alone will need 10 trillion USD for net-zero transition. And the quantum of finance required is only expected to increase.”
Kavin Kumar Kandasamy, CEO of ProClime, a unified service provider in the climate space, agrees with Das.
He shares that as per estimates, the collective transition to net-zero will require trillions of dollars, all of which “cannot be sourced from the Loss and Damage or through the New Collective Quantified Goal,” he says.
For the Developing Countries, Where Should This Money Go Further?
And where exactly does the developing world need to invest this money to better fight climate change?
Das tells The Quint that historically, mitigation has always received more money than adaptation, since mitigation and clean technologies offer business opportunities to different players in the market space.
But now with increasing extreme weather events and rising climate worries, Das says that “investments in adaptation will need to increase to avoid catastrophic impacts on life, livelihoods, and infrastructure.”
“Investments in adaptation are more for the common good, and may not directly lead to a business opportunity. Therefore adaptation finance will need to take centre stage to reduce the vulnerability of the developing countries.”Pallavi Das, Programme Lead, Council on Energy, Environment and Water (CEEW)
Kandasamy, on the other hand, says that the developing countries will have to prioritise their own Nationally Determined Contributions – whether it be for energy transition or other mitigation, adaptation, and resilience activities.
Climate Negotiation Has Always Taken Time, but We’re Running Out of It Now
Is there a way to accelerate this process?
Unfortunately, says Das, when it comes to climate negotiations, the progress has always been slow.
"But the window for action is closing rapidly, and the pace has to be ramped up. Developed countries, global forums, and actors around the world will need to deliver on the three pillars of climate action: finance, technology, and capacity-building," he tells the Quint.
"Only with the support from these pillars can developed countries transition and protect themselves from rising climate impacts."Pallavi Das
Kandasamy agrees. While he maintains that COP remains the “most balanced forum to reach such consensus” on climate finances, he says that countries in groups like G20 and BRICS should look into climate finance in parallel as well.
As experts are still raising questions about the first world’s commitment to meeting climate goals, Das brings up an important point.
She says that since climate finance does not have a “standard accepted definition,” there are loopholes that can be found. For instance, for the last fund, “the 100 billion USD was supposed to be the floor and not the ceiling,” she emphasises.
For Kandasamy, there’s another worry at hand. With the developing countries continuing to grow, “it would be easy for the developed economies to shy away from any funding or financial commitments.”
“Developed countries have been continuously failing to deliver on their commitments and take responsibility for the climate crisis. Their newest plan to drop accountability for climate change is by increasing the donor base to include emerging markets as donors.”Pallavi Das
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)