finance

We must help poorer countries tackle climate change


It is a gross injustice that those who have done the least to cause the climate crisis often suffer most from its effects. With average global temperatures already 1°C above pre-industrial levels, flooding, droughts, heatwaves, wildfires, melting glaciers and crop failures blight the lives of millions. Unless we get global emissions under control within a decade, many parts of the world face an apocalyptic future. This is the most critical point in our lifetime.

Take Nepal, the country fourth most-at-risk from the effects of climate change. In February, I met representatives of communities forced to leave their villages around the town of Jomsom to avoid flooding and drought. There was also the minister of a small island nation who told me that because of rising sea levels, without action on climate change: “I will have nowhere to call home.” Such communities are disproportionately affected by a crisis not of their making; both developed countries and the international community have a moral duty to support them. Ensuring that finance is available is vital to these efforts.

An estimated $3.5tn in investment is needed for developing countries to fulfil the commitments they have made on tackling climate change over the next decade. But the pandemic has made investment in climate action more challenging, with budgets stretched and debt piling up. Public climate finance is by no means the only answer to these problems. But it is a significant part of it as it can help mobilise private capital. That is why last month, as president of the next UN Climate conference, I convened a meeting that brought together about 50 developed and developing countries, as well as international institutions, to address the public finance challenges that create barriers to climate action.

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The first challenge is quantity. To support developing countries, in 2015 developed countries pledged collectively to mobilise at least $100bn a year in climate finance between 2020 and 2025. The UK has committed £11.6bn of investment to support climate action around the world. Yet globally, we still have a lot to do to reach the $100bn goal — a key priority for the UK’s COP26 and G7 presidencies this year.

Second, it needs to be easier for communities to access the finance that is available. Some funds come with unrealistic due diligence requirements, or such strict criteria on how they can be spent, that it puts them out of reach for many. Countries’ capacity constraints can also stand in the way of money getting to where it is most needed. 

Third, as well as reducing future emissions, we need to make sure there is finance available to protect communities now. The reality is that even if the world reaches net zero emissions tomorrow, we still need to deal with the effects of climate change today. Just as the UK is investing in flood and coastal defences, communities around the world need similar solutions and early warning systems to prevent or repair damage if disaster strikes. But this work is harder to finance.

These are complex problems, but we have set in train some solutions. Last month, we agreed the need to increase the amount of finance available to fund adaptation to extreme weather. And the UK, alongside Fiji, will launch a task force to address access to finance ahead of the COP26 meeting in Glasgow in November. Upcoming summits, including the US earth summit hosted by President Joe Biden this week, were also earmarked as opportunities to secure further climate finance pledges from developed countries.

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It is extremely welcome that the IMF secured support for a new allocation of special drawing rights this month. That will help countries navigate their economies beyond the pandemic. But we also need long-term solutions that ensure a continuing flow of public and private finance to tackle climate change. Emerging from the pandemic, we have a historic opportunity to invest in a green and resilient future.

We have begun to address some of the barriers that developing countries face when it comes to climate action. Developed countries now need to get to work, honour the commitments they have made and dig deep into their pockets to ensure these funds are available. If that happens, we will be in a strong position to unlock the financial flows needed to live up to the historic 2015 Paris agreement.

We owe it to those communities around the world that are suffering from a crisis they did next to nothing to cause. Without adequate finance, the task ahead is near impossible. But removing barriers to climate action is within our gift to solve. We must act now.

The writer is president-designate of the 2021 UN climate change conference 

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