COLUMN-Climate finance for developing countries is insufficient: Kemp

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Rrepeat, text unchanged. John Kemp is a market analyst at Reuters. The opinions expressed are his

LONDON, September 17 (Reuters)Developed countries provide relatively little financial assistance to help their developing counterparts reduce greenhouse gas emissions or adapt to climate change, despite often repeated high-level political commitment.

There is a major gap between the scale of the transformation of the energy system envisioned by policymakers and the limited funding they make available to achieve it.

Unless the gap between ambition and resources is reduced, global emissions will continue to rise and the goal of net zero by 2050 will become out of reach in the next few years.

Developed countries provided or mobilized only $ 80 billion in mitigation and adaptation finance for their developing counterparts in 2019. (https://tmsnrt.rs/3nCrL4e)

The estimate was compiled by the Organization for Economic Co-operation and Development in its annual report on climate finance, released on September 17.

The main sources of funding came from multilateral development banks ($ 30 billion), bilateral government assistance ($ 29 billion) and the private sector ($ 14 billion), with smaller amounts coming from climate funds and export credits.

In 2009, the Copenhagen climate summit agreed that developed countries would provide $ 100 billion a year by 2020, but even that relatively modest target is unlikely to have been met when estimates become available next year. .

The financial assistance promised and provided to fight climate change is paltry compared to the $ 1.540 billion in foreign direct investment flows of all kinds, including $ 685 billion to developing countries, reported in 2019.

The financial assistance promised and provided is also only a tiny fraction of the $ 1.9 trillion invested in energy systems around the world in 2019, according to the International Energy Agency. (https://tmsnrt.rs/3Am0s1p)

Funding committed by developed countries is far from sufficient to transform energy systems in developing countries, achieve net zero emissions and provide universal access to modern energy services.

Developed countries pledged to provide the equivalent of just $ 16 per person per year to help the developing world mitigate and adapt to climate change – and managed to provide just $ 12 per person in 2019.

It’s not even close to the hundreds of billions of dollars that would be needed to replace traditional cooking and heating fuels, such as wood, coal and kerosene, with modern, cleaner alternatives by 2030, which is one of the United Nations Sustainable Development Goals.

This is even further from the amount that would be needed to electrify transport and other energy services, and simultaneously decarbonize electricity production, replacing the combustion of coal and gas with wind, solar, hydraulic and nuclear energy. .

With so little funding from advanced economies, developing countries will have to finance most investments from their own resources, where they will have to compete with a myriad of other policy priorities.

Key policy makers in Europe and North America have drawn up ambitious plans to reduce emissions at home and abroad, but they offer little financial or technical assistance to help realize these plans in emerging economies rapidly growing, where future growth in emissions is expected to occur. .

The references:

– Climate finance provided and mobilized by developed countries (OECD, Sept. 2021)

– World Investment Report (UNCTAD, June 2021)

– Global energy investment (IEA, June 2021)

Associated columns:

– IEA roadmap shows difficult course to net zero (Reuters, June 30)

– Rising global energy consumption complicates path to net zero (Reuters, July 27)

– Developing countries need help breaking out of coal dependency (Reuters, July 20)

– CO2 emission limits and economic development (Reuters, April 16)

(Edited by Andrew Heavens)

(([email protected]))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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