Wealthy Nations failed to meet Climate Finance Goal

• 27 Oct 2021

On 25th October 2021, the UK COP26 Presidency released a Climate Finance Delivery Plan to provide clarity on when and how developed countries will meet the $100 billion climate finance goal.

Finer Points

• Based on the analysis from the Organisation for Economic Cooperation and Development (OECD), the delivery plan shows that developed countries will make significant progress towards the $100 billion goal in 2022, and provides confidence that it will be met in 2023.
• The data also provides confidence that developed countries can mobilise more than $100 billion per year thereafter through to 2025.

Background

• In 2009, developed countries agreed to mobilise $100 billion in climate finance per year by 2020, and in 2015 agreed to extend this goal through to 2025. While developed countries have significantly scaled-up their support over the last decade, new analysis shows the $100 billion goal was unlikely to have been met in 2020 and is likely to also fall short in 2021 and 2022.

What is Climate Finance?

• Climate finance refers to local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change.

Why Climate Finance?

• Climate finance is needed for mitigation, because large-scale investments are required to significantly reduce emissions.
• Climate finance is equally important for adaptation, as significant financial resources are needed to adapt to the adverse effects and reduce the impacts of a changing climate.

Climate Agreements & Protocols on Climate Finance

• The Convention, the Kyoto Protocol and the Paris Agreement call for financial assistance from Parties with more financial resources to those that are less endowed and more vulnerable.
• This recognizes that the contribution of countries to climate change and their capacity to prevent it and cope with its consequences vary enormously.