CHARM EL-SHEIKHEgypt — As this global gathering of climate leaders approached, the collective mood was that it would not be a “big COP” like Paris in 2015. Back then, after years of progressive bargaining, people, politics and pressure aligned to produce an unprecedented commitment to limit global warming to 1.5°C. Nothing like that is on the cards yet here at COP27, but real progress is expected to emerge on who will pay for climate damage. (See our first and second COP27 dispatches.)
The American plan, for now
After news leaked earlier this week, the US officially announced its new carbon offset plan – and sparked a firestorm of criticism. The plan could allow companies to neutralize their emissions by buying offsets for emissions avoided in developing countries. But the details are sketchy for now, and until they are worked out, concerns will grow that the program could be hampered by the same weaknesses as the old carbon credit systems, including credibility and additionality issues. Watch for details of the US plan that will take shape in the coming months.
Whether the US plan proves successful or not, the world needs new kinds of financing mechanisms to quickly get money to developing countries. “Emerging economies need support to phase out fossil assets while ensuring energy security and economic prosperity for their citizens,” said MRI CEO Jon Creyts. “Funding for the status quo will not be sufficient. We need more innovative solutions on top of the other types of financing already available to unlock private capital. »
A higher price?
How much money will be needed each year to help developing countries reduce their greenhouse gas emissions and adapt to the effects of the climate crisis? The estimated price continues to grow.
Rich countries have so far pledged $100 billion a year – and failed to deliver. Some estimates have put the total needed closer to ten times that amount. But as climate damage escalates faster than expected and inflation pushes up the costs, a recently revised analysis suggests developing countries will need $2 billion per year 2030reports The Guardian. The sad reality is that this number is likely to continue to rise even after emissions peak.
💲Dig deeper: Learn more about the climate finance targets being discussed at COP27check MRIit is Climate 101: NCQGthe most important climate goal you’ve never heard of.
With small steps
For decades, rich countries have refused to offer “compensation for loss and damage to the poorest countries that have been hard hit by climate disasters. But this gel is starting to melt, The New York Times reports, as some countries are now pledging this kind of direct climate aid. This week Scotland pledged $5.seven million, in addition to $2.2 million pledged last year, and Ireland pledged $ten million.
These are relatively modest amounts, given the growing estimates of need (see above), but small steps may portend larger commitments to come later this week and next.
Why access equals equity
Whether it’s millions, billions or trillions, the wave of climate finance that will pour in to help developing economies may come up against a little-known obstacle: too few experts with the time and know-how needed to navigate the bureaucratic maze of global financial players, funding needs and demands needed to obtain and distribute funds. This means that the countries most in need of help to deal with the climate crisis are spending years mired in the climate finance system.
Expertise in this area can however be developed, and increasing the number of experts able to navigate the mysteries of climate finance in recipient economies will accelerate the deployment of finance and strengthen its impact. MRI designed and coordinates the Climate Finance Access Network (CFAN), which supports countries by training dedicated experts in the skills needed to access support for their climate goals. CFAN announced new funding to COP this will allow it to expand its reach – from eight Pacific countries to more Pacific and Caribbean countries – thanks to support from the Government of Canada, the Open Society Foundations and an anonymous donor.