Climate finance could make or break the COP26 summit. here’s why



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LONDON, Nov. 1 (Reuters) – At the United Nations climate conference, expect one theme to cover the cacophony of pledges from countries and companies around the world: money.

The COP26 summit, which kicked off in Glasgow on Sunday, will attempt to complete the rules for implementing the 2015 Paris Agreement – which aims to limit global warming to 1.5 degrees Celsius above the pre-industrial era – and securing more ambitious commitments from countries to achieve its goals.

Money is the basis of progress on both of these issues. Climate finance refers to the money that rich countries – responsible for the bulk of the greenhouse gas emissions that heat the planet – give poorer countries to help them reduce their own emissions and help them reduce their own emissions. adapt to deadly storms, rising sea levels and droughts made worse by global warming.

So far, the money has not arrived.

Developed countries confirmed last week that they failed to deliver on the 2009 pledge to provide $ 100 billion a year in climate finance by 2020. Instead, it will happen in 2023. read the following

“Their credibility is now undermined,” said Saleemul Huq, advisor to the 48-country Climate Vulnerable Forum, adding that the broken funding pledge could “spoil everything else” at the Glasgow talks.

“They are basically leaving the most vulnerable people on the planet behind, having promised they were going to help them.”

The Alliance of Small Island States, whose influence in past UN climate negotiations has exceeded the size of its membership, said: “The impact this has had on confidence cannot be underestimated. “

SYMBOLIC TARGET

The reaction clearly showed the struggle countries will face at COP26 as they negotiate divisive issues that derailed past climate talks.

The $ 100 billion commitment falls far short of the needs of vulnerable countries to deal with climate change, but it has become a symbol of trust and fairness between rich and poor nations.

Vulnerable countries will need up to $ 300 billion a year by 2030 for climate adaptation alone, according to the United Nations. This is not to mention the potential economic losses due to poor harvests or climate-related disasters. Hurricane Maria in 2017 cost the Caribbean $ 69.4 billion.

European Union climate policy chief Frans Timmermans said delivering the $ 100 billion was one of his three priorities for COP26, alongside finalizing the Paris settlement and setting the ‘more ambitious emission reduction targets.

“I think we still have a chance to reach $ 100 billion,” Timmermans told Reuters. “It would be very important for Glasgow to do this, also as a sign of confidence in the developing world.”

Italy said on Sunday it was tripling its contribution to climate finance to $ 1.4 billion per year for the next five years. The United States pledged in September to double its contribution to $ 11.4 billion a year by 2024 – which analysts said was well below its fair share, based on size, of emissions. and the ability to pay. Read more

The COVID-19 pandemic has increased the frustration of the poorest countries with the lack of climate liquidity. The $ 100 billion is only a tiny fraction of the $ 14.6 trillion that major economies raised last year in response to the pandemic, according to the World Economic Forum.

“One thing the pandemic has shown is that if the priority is high enough, the spending can follow,” said Lorena Gonzalez, senior associate for climate finance at the World Resources Institute.

A flurry of mini-deals on climate finance are also planned for the two-week summit of COP26, with the aim of restoring confidence.

The EU, US, Britain, Germany and France will announce a funding plan to help South Africa phase out coal-fired power faster and invest in renewables. Further announcements are expected from development banks and the private sector. Read more

Total allocated climate finance, all channels 2018 v WRI Equitable share estimate in a $ 100 billion scenario

BUILDING CONFIDENCE

Finance will dominate the agenda of the COP26 negotiations on the rules of the Paris Agreement.

Countries will begin talks on defining a new post-2025 climate finance pledge, which poorer countries say must have enough checks and balances to ensure that this time the money come. Read more

Another sticking point will be the rules for setting up a carbon offsets market under the Paris Agreement – an issue that derailed the latest UN climate talks in 2019.

Developing countries want a share of the proceeds from the new carbon market to be earmarked for financing climate adaptation projects, such as storm shelters or rising sea defenses. Some richer countries oppose it. Read more

“These markets must put 1%, 2% – that’s nothing – in the adaptation. COP26, told Reuters.

It is difficult to obtain private funding for adaptation projects, as they often do not generate a financial return. Public support has also fallen behind. Of the $ 79.6 billion in climate finance to which donor governments contributed in 2019, only a quarter was spent on climate adaptation, according to the OECD.

Reporting by Kate Abnett in Brussels and Susanna Twidale in London, additional reporting by Fransiska Nangoy, editing by Giles Elgood

Our Standards: The Thomson Reuters Trust Principles.

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