{"id":603881,"date":"2023-08-22T00:00:00","date_gmt":"2023-08-22T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/its-100-days-until-cop28-where-does-the-world-stand-on-climate-finance\/"},"modified":"2023-08-22T00:00:00","modified_gmt":"2023-08-22T00:00:00","slug":"its-100-days-until-cop28-where-does-the-world-stand-on-climate-finance","status":"publish","type":"goinggreen","link":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/its-100-days-until-cop28-where-does-the-world-stand-on-climate-finance\/","title":{"rendered":"It\u2019s 100 days until COP28. Where does the world stand on climate finance?"},"content":{"rendered":"

How far has global climate finance come since COP27? <\/strong>With exactly 100 days to go until the COP28 global climate summit in the UAE, we\u2019re taking a look at what\u2019s changed in the world of climate finance since the last COP summit. At COP27 in Sharm El Sheikh last year, big pledges were made by developed nations to help their developing counterparts adapt to a changing climate. So what\u2019s happened since? And what should we expect on the climate finance front out of Dubai? <\/p>\n

What counts as climate finance: <\/strong>Climate finance is any and all money that flows to green projects. Those projects are generally grouped into two main categories<\/a>. Mitigation projects<\/a> try to reduce the amount of greenhouse gases being released into the atmosphere \u2014 think renewable power plants, sustainable transport infrastructure, or making buildings more energy efficient. Adaptation projects<\/a> help countries handle the changing climate \u2014 for example, by growing crops that can handle higher temperatures or building sea walls to reduce flooding risks amid rising sea levels. <\/p>\n

And where it comes from: <\/strong>Climate finance can come through bilateral institutions funded by one country, from multilateral lenders, or from dedicated regional or country-specific funds. Climate Funds Update has a detailed map of many of the key sources<\/a>. The finance could come in the form of concessional loans, debt swaps, grants, private equity, or other types of lending. Often, the focus is on how public institutions \u2014 whether individual countries or multilateral organizations \u2014 can use climate finance to de-risk green projects, helping to mobilize private lenders to come onboard in their wake. <\/p>\n

Climate finance is a key issue for emerging markets: <\/strong>Climate finance is needed everywhere \u2014 but debates around global climate finance have focused on how developed countries can make financing for green projects accessible in and emerging markets (EMs). There are several reasons for that. It\u2019s often more expensive to finance infrastructure projects in EMs because borrowers pay a premium to cover the risk investors take on by investing in less established markets. At the same time, public money is stretched further in many EMs, meaning governments may not be able to fund the projects they need for the green transition \u2014 especially when many are already carrying heavy debt burdens, much of it owed to richer countries. Finally, there\u2019s a moral argument, with EMs saying that they should not have to bear the full cost \u2014 or become even more indebted \u2014 to solve a crisis largely created by developed countries, who have historically been responsible for the vast majority<\/a> of greenhouse gas emissions. <\/p>\n

COP27 saw a victory for EMs on the climate finance front: <\/strong>Last year\u2019s COP summit was billed as the summit for developing nations \u2014 and their demands on climate finance were front and center. At the summit, a landmark agreement was reached to create a loss and damage fund that will see developed countries pledge funds to \u201csave lives and livelihoods from climate change related disasters\u201d in climate-affected countries<\/a>. <\/p>\n

Where the loss and damage fund stands now: <\/strong>The agreement to set up the fund was hard-won at last year\u2019s COP \u2014 but it doesn\u2019t nail down any of the details on who will pay into it, its target value, who will be eligible to receive the funds, and how it will operate. Those details are being hashed out by a transitional committee<\/a> of 24 member states including Egypt. Since COP27, the committee has held two meetings and another two workshops, and is set to meet again<\/a> in the Dominican Republic next week \u2014 but they\u2019ve been tight-lipped on how the talks are progressing. In recent months, dozens of developing nations have submitted case studies<\/a> on their own loss and damage from climate change to help inform the committee\u2019s decisions. <\/p>\n

Some want to see more action: <\/strong>\u201cPlease do not operate in \u2018UNFCCC time\u2019 which would mean talking and talking for years before a penny is available in the fund,\u201d Saleemul Huq, director of the International Centre for Climate Change and Development in Bangladesh, tells COP delegates in an article published by Climate Home News<\/a>. \u201cPlease try your best to get something up and operational by COP28 rather than COP29 or COP30.\u201d<\/p>\n

So will the loss and damage fund be finalized in Dubai? <\/strong>It doesn\u2019t look too likely as of now, though COP-watchers are hoping to see at least some progress. COP28 could bring \u201csome sort of a structure of governance and identification as well of the sources of funds,\u201d Egyptian climate czar Mahmoud Mohieldin told Enterprise Climate recently \u2014 but suggested<\/a> delegates may stop short of pinning down who signs up, who is eligible, and who monitors the fund. <\/p>\n

Meanwhile, the most famous pledge in climate finance still isn\u2019t being met: <\/strong>Developed countries are yet to make good on their biggest commitment to funding climate projects abroad. Richer countries pledged to mobilize USD 100 bn per year in climate finance to developing nations by 2020, a goal that was extended until 2025 at COP21 in Paris. As of 2020, they were still some USD 17 bn short of that goal, according to OECD figures<\/a>. President Abdel Fattah El Sisi urged world leaders<\/a> to redouble their efforts to fulfil that pledge at the Paris Summit for a New Global Financing Pact back in June \u2014 a summit that was widely criticized<\/a> for failing to secure more concrete commitments from developed nations on climate finance. <\/p>\n

But there are some positive signs: <\/strong> While the landmark, UN-led agreements on climate finance are slow to implement, there are signs that more and newer kinds of climate finance are coming onto the global stage. In one recent example, Gabon just became the first country in Africa to agree a debt-for-nature swap<\/a>. Under this type of climate finance, the heavily indebted country is getting better terms on USD 500 mn of its debt, in return for spending at least USD 125 mn to protect endangered dolphins. <\/p>\n

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