The Organisation for Economic Co-operation and Development (OECD) on Friday, November 6, 2020 published a report on the status of climate finance that has been mobilised by developed countries in relation to their commitment to deliver $100 billion annually by 2020. The report takes stock of funds that had been delivered by 2018, indicating that although there is a steady increase in funds, the goal of reaching $100 billion by 2020 is far away.
“The significance of delivering $100 billion annually by 2020 is not just about reaching an arbitrary number target. It is about saving lives, and preventing further suffering around the world. These funds are urgently needed to deliver action on the ground by people and communities in climate vulnerable countries,” says Patriciah Roy Akullo, co-chair of ACT Alliance’s climate justice group.
The increase in funds reflected in the OECD report is to a large extent due to a growing number of loans, offered by multilateral development banks. While loans serve as an important source of support, they are very different from grants which do not have to be repaid.
“The $100 billion should serve its intended purpose – to support, not to add a burden of debt. The increase in finance reported would look rather different if it was just grants that counted towards the $100 billion,” says Mattias Söderberg, co-chair of ACT’s climate justice group.
“With the current approach, countries are delivering a large portion of climate finance as loans- which developing countries would have to pay back. As a result, we risk ending up with a situation where developed countries actually generate a profit from the support that they have committed to deliver. To say this is unfair is an understatement,” continues Söderberg.
Apart from the commitment to deliver $100 billion annually, developed countries have also committed to balance the support that they provide for mitigation and adaptation initiatives. Despite this, the OECD report reveals that there is still a large focus on mitigation globally.
“It is difficult to continue to have faith in promises such as the $100 billion commitment, or the balance of support for mitigation and adaptation, when countries are not taking concrete initiatives to deliver on their commitments. There is a huge need for an increase in adaptation finance, and this is even more critical given the additional challenges that communities face due to COVID,” says Söderberg.
Climate finance is a central element in the UN climate talks and disagreements on this topic is often identified as the reason for a lack of progress in the general negotiations.
“Climate finance is urgently needed to enable climate action. However, the fulfilment of commitments is also needed to build trust and confidence in the UN climate talks. Developed countries should deliver on their commitment to mobilise $100 billion by 2020. This climate promise must be kept,” concludes Akullo.