In order to assist developing countries reduce carbon emissions and cope with the effects of climate change, richer nations have ramped up investment, although it is uncertain whether they will meet their $100 billion target this year.
The Organization for Economic Co-operation and Development (OECD) reported in its annual report on climate finance for developing countries that donor governments contributed $78.9 billion in 2018, the latest year for which data is available. This marks a rise of 11 percent from $71.2 billion in 2017.
The rise was driven by an increase in public climate finance, while private climate finance was flat, the report added.
Climate finance refers to state, national or transnational funding that aims to facilitate climate change mitigation and adaptation measures, derived from public, private and alternative funding sources.
The funds include loans, grants and a modest amount of equity, plus private investments that have been helped by public bodies to mobilize.
In 2009, developed countries agreed at the United Nations to collectively contribute $100 billion annually to climate finance for developing countries by 2020, many of which are dealing with rising sea levels, storms and droughts worsened by climate change.
The $100 billion goal remains within reach, the OECD said, while private finance mobilization, which amounted to $14.6 billion in 2018, has barely increased from 2017-2018.
“That means they’d need more public finance to meet that target,” said Simon Buckle, head of the OECD’s climate change division. “That’s not impossible, based on this trend.”
With the coronavirus pandemic disrupting investments this year, the OECD said there was still no data available about how climate finance was impacted by the pandemic. “Developed countries haven’t yet delivered on their promise, both in terms of quantity and quality,” said Mohamed Adow, director of Nairobi-based think-tank Power Shift Africa.
Mr. Adow urged developed countries to increase ‘climate adaptation’ assistance, such as wilder weather defenses or methods for adapting farming practices during droughts and floods.
Last year, only a quarter of the world’s donations went to adaptation, with much of the funding being focused on reducing greenhouse gas emissions in developing countries.
Together, the European Union (EU) and its member countries are the largest providers of climate finance for developing countries. Last week, the EU said it had raised such contributions in 2019.
Funding allocation
Economic infrastructure was supported by more than half of total climate finance, mainly energy and transport, with most of the remainder going to agriculture and social infrastructure, particularly water and sanitation.
Asia received the largest share of climate finance from 2016 to 2018 at 43 percent, followed by Africa (25 percent) and the Americas (17 percent).
In terms of revenue allocation, 69% of climate finance was allocated to middle-income countries, 8% to low-income countries and 2% to high-income countries, with the remaining 21% allocated at regional rather than country level, according to the OECD.
Meanwhile, Francesco La Camera, head of the International Renewable Energy Agency, said this week that in order to meet sustainability targets in line with the Paris Agreement, clean energy investments need to double to $2 trillion per year over the next three years.
Increasing annual investment to $2 billion per year between 2021 and 2023, the Abu Dhabi-based agency estimates, would stimulate more private sector investment, offering an important boost to the global economy.
This week, the US officially withdrewfrom the Paris Agreement, the Global Climate Change Agreement, which was forged 5 years ago to avert the risk of devastating climate change.
A year ago, US President Donald Trump triggered the withdrawal of his country from the Paris Agreement, leaving 189 countries committed to curbing global warming. Joe Biden, the Democratic presidential candidate, has said that he favors rejoining the pact.
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