Climate finance remains a stumbling block on way to COP26

G7 leaders meeting in Cornwall, UK, reaffirmed climate finance pledges, but research shows the promise is yet to be fulfilled [Hollie Adams / EPA-EFE]

As world leaders prepare for the COP26 climate summit hosted by the UK in November, international finance to help poorer countries tackle climate change remains a key barrier – and the recent summit between the world’s seven richest nations did not bring a solution.

World leaders will meet in Glasgow in the autumn for a UN climate summit that many hope will prove as momentous as the COP21 in 2015, which led to the Paris Agreement.

However, while progress was made since Paris – including huge drops in the cost of renewables and more ambitious climate pledges by the EU, the US and China – there are also new stumbling blocks, like the COVID-19 crisis and a failure by the world’s richest nations to meet financial commitments.

Financial support for developing countries to green their economies and adapt to the impacts of global warming will be essential to success at COP26.

But the world’s richest nations have consistently failed to meet the levels of money promised, and the G7 summit in Cornwall last weekend again fell short on commitments to provide $100 billion of climate finance annually through to 2025.

Although that pledge was reaffirmed by G7 leaders, who vowed to “increasing and improving climate finance to 2025″, there was no agreement to translate that into cash.

That is a problem because failure to deliver on climate finance could scupper a deal in Glasgow, says Antony Froggatt, senior research fellow at Chatham House, the UK-based international affairs think tank.

“[Finance] is a deal-breaker and we haven’t been making progress,” Froggatt said at a EURACTIV debate held earlier this month. “We know that the commitments are below the $100 billion. That is not only symbolic, but is absolutely fundamental, and in some ways is more important now, because of the pandemic,” he added.

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‘Turning point’ hampered by solidarity gap

The COP26 climate summit could be a turning point, but rich nations need to start addressing the finance gap and help developing countries tackle climate change, according to the deputy head of the Slovenian delegation to the UN climate change secretariat, the UNFCCC.

“Glasgow is definitely going to be a turning point,” said Jana Urh Lesjak from Slovenia, which will hold the EU’s rotating presidency during the summit. “I believe that the EU has made its commitments and goals very transparent. We have the climate law, and we have the [2030] package,” she said in reference to the EU’s new climate targets for 2050 and 2030.

“But I would say we need to focus also on the gaps that need to be filled – namely the finance gap for least developed countries that need our assistance the most,” she added.

The solidarity gap goes well beyond finance, with the $100 billion pledge barely scratching the surface of developing countries’ needs, according to Jennifer Tollmann, from climate think-tank E3G.

“It’s solidarity around vaccines, it’s solidarity around debt relief and economic restructuring so that you can decide where you want to make investments as a middle-income country, let alone a vulnerable country,” she said.

The relationship with developing countries is even more strained than it was in Paris because of the disparity in vaccine rollouts, added Amber Rudd, a former UK minister who is now head of the international advisory group at Equinor, the Norwegian energy company.

However, there are positive signs beginning to show around climate finance. The G7 has agreed to stop coal financing abroad, meaning China remains the only big coal financer standing.

After the G7 summit, Germany said it would increase its climate finance by €2 billion to €6 billion by 2025 at the latest while Canada pledged to double its climate finance over the next five years.

Alongside this, the US administration’s new climate pledge for 2030 is positive, said Jytte Guteland, a Swedish MEP who was the lead negotiator in the European Parliament on the EU climate law.

“I’m not being this naïve optimist, but I really believe we have an opportunity,” she said.

Rudd, too believes there is reason to be optimistic about COP26, despite the difficulties caused by COVID-19.

“As though COP itself isn’t complicated enough, we now also have to have the fact of the pandemic to try to engage with in order to get an agreement. But the urgency, the necessity, the visibility, I think are reasons for me to be optimistic that the result will be good for us,” she said.

> Watch the full EURACTIV debate on YouTube:

[Edited by Frédéric Simon]


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