Rich countries’ continued failure to honor $100 billion in climate financing commitments threatens negotiations and undermines climate action

Finance


Flawed accounting system does not tell the true story of climate finance

As global carbon pollution continues to rise and climate change wreaks further havoc on people and the areas least responsible for the problem, wealthy polluting countries are now investing $1,000 a year in climate change funds in low- and middle-producing regions. It is three years behind its promise to mobilize $100 million. – Income country.

To make matters worse, Oxfam says the actual aid it provides is far less than reported figures, and most of it comes as debt that must be repaid.

Donors claim they mobilized $83.3 billion in 2020, but the true value of their spending was at most $24.5 billion, according to Oxfam’s “Climate Finance Shadow Report 2023,” released today. . The $83.3 billion bill is overvalued because it includes projects with overstated climate goals and loans offered at face value.

By providing loans rather than subsidies, these funds increase the debt burdens of already heavily indebted countries and may even harm communities rather than help them, especially now that interest rates are rising.

Donor countries are reusing up to one-third of their public aid contributions for climate finance, rather than injecting new and additional money, and more than half of all climate finance going to the world’s poorest countries It is currently being offered as a loan.

France has the highest share of bilateral public climate finance through loans, at a whopping 92%. Other countries with large amounts of loans include Austria (71%), Japan (90%) and Spain (88%). In 2019-2020, 90% of all climate change finance provided by multilateral development banks such as the World Bank was provided as loans.

“This is grossly unfair. Rich countries treat poor countries with contempt. We are playing a dangerous game,” said Nafkort Dhabi, head of climate change policy at Oxfam International.

Ahead of the Bonn Climate Summit (June 5-15), Oxfam also found that climate-related development loans are mostly gender-blind. Only 2.9 percent of all funding identified gender equality as a priority. Only one-third of climate finance projects were gender mainstreamed in 2019-2020. This meant that we considered the unique needs, experiences and concerns of both women and men.

Oxfam said the real value of money allocated by rich countries to help low- and middle-income countries combat climate change in 2020 was between $21 billion and $24.5 billion, of which most was directed towards climate adaptation. estimated at just $9.5 billion to $11.5 billion. Provides critical funding for projects and processes that help climate-vulnerable countries address the worsening harms of climate change.

“The $11.5 billion funding will help low- and middle-income countries cope with the increasingly severe floods, hurricanes, firestorms, droughts and other devastating consequences wrought by climate change,” Davi said. We don’t have to think it’s close enough,” he said. He said. “People in the United States spend four times that amount each year on dog and cat food.”

Oxfam says India, Pakistan and Latin America all suffered record heatwaves over the past three years, followed by floods that affected more than 33 million people in Pakistan and adaptation funding too neglected in East Africa. I am very concerned about what is going on. The country is experiencing the worst drought in more than 40 years, contributing to crisis levels of hunger.

“The world’s poorest countries, especially the least developed countries and small island developing states, are highly vulnerable to climate impacts and are undersupported. We are being pushed,” Davi said.

The hope that low- and middle-income countries could mobilize private investors to contribute a significant share of climate finance has not materialized, raising only $14 billion a year, mainly for mitigation purposes. Oxfam says it is difficult to find details on how the private money will be used and who will benefit from it. According to a recent report by the Organization for Economic Co-operation and Development (OECD), mobilized private adaptation loans surged from $1.9 billion in 2018 to $4.4 billion in 2020, largely due to large-scale investments in Mozambique. It was due to a liquefied natural gas energy project, but the reason was not disclosed. Any adaptive activity.

Oxfam believes that “loss and damage” – the financing of climate impacts that cannot be mitigated, adapted, or have not yet adapted – still has a predictable place in the international climate finance landscape. I am very concerned that there is not. The need to finance loss and damage is urgent, with estimates suggesting that low- and middle-income countries could face costs of up to $580 billion annually by 2030.

Oxfam said the ongoing deliberations under the United Nations Framework Convention on Climate Change (UNFCCC) to set a new global goal on mobilizing climate finance beyond 2025 will bring together rich and low- and middle-income countries to It is an opportunity to rebuild the trust of However, if past failures continue unresolved, this effort will fail before it can properly begin.

Climate finance providers need to significantly scale up their efforts and report on climate finance on a case-by-case basis, emphasizing the actual share that goes to mitigation and adaptation. Similarly, there is an urgent need to increase subsidy-based financing for climate action, and the momentum to lend the money they pledged is waning.

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