The new figure dwarfs the current unmet climate finance promise by developed countries to provide $100 billion annually to their developing counterparts
Developing countries need $5.8 trillion-$5.9 trillion up to 2030, to finance less than half of the climate actions listed in their Nationally Determined Contributions (NDCs) and keep global warming in check, according to the first-ever UN assessment of the needs of the developing countries.
The final executive summary of the assessment prepared by the Standing Committee on Finance (SCF) under the United Nations Framework Convention on Climate Change (UNFCCC) was adopted on October 14, 2021, at the ongoing 26th SCF meeting in Germany by all country parties.
The new figure dwarfs the current unmet promise by developed countries to provide $100 billion to developing countries by 2020 to support their climate actions. The report is especially important as it comes just ahead of the COP26, which starts on November 1, 2021 in Glasgow. Developed countries have been demanding and putting pressure on developing countries to update and increase NDC ambitions ahead of COP, while their responsibility towards providing the means to achieve these climate targets through finance and technology remains obfuscated.
NDCs from 153 countries (as of May 31, 2021) included 4,274 needs and of this, only 1,782 (41%) were identified with accompanying costing, as per the report’s executive summary accessed by CarbonCopy. The multi trillion-dollar figure is, therefore, likely to be much lower than the true overall financial needs for all NDC actions in the developing world, according to the executive summary.
“The figure of $100 billion just does not smack of any form of ambition [on part of the developed countries] whatsoever,” said Zaheer Fakir, one of the lead coordinators for the African Group of Negotiators on climate change. Fakir is one of the co-facilitators of the report, on behalf of the SCF.
Among the contentious matters in the adoption of the assessment report was the issue of ‘loss and damage’. Developed countries got any substantial mention of data related to ‘loss and damage’ needs removed from the final draft—continuing a long history of dilution and obstruction when it comes to discussions around the costs of climate impacts, particularly in the developing world (which despite being the most vulnerable to climate impacts, bears negligible historic responsibility for climate change).
“Every time any mention was made or data was presented on loss and damage, it was summarily removed by some of the developed countries,” Fakir said. There is no mention whatsoever in the report on the actual needs for loss and damage “and there appears to be no appetite to address the issue on part of the developed countries”, he added.
“There are three pillars of climate action that work in continuum. Inadequate mitigation actions mean more investment is required in adaptation to prepare for the climate impacts. And if we don’t invest sufficiently in adaptation, it leads to more loss and damage,” said Climate Action Network senior advisor Harjeet Singh—one of the most vociferous advocates for loss and damage deliberations from the Global South. Singh added that the assessment of loss and damage from the ground up is an important exercise to provide information on what is actually needed to help communities recover from climate impacts. “Additionally, it will also drive more ambitious actions on mitigation and adaptation to limit and avoid future losses and damages.”
Why is the assessment important
The new assessment is a result of a resolution during COP24 that instructed the SCF to prepare, every four years, a report determining the financial needs of developing country parties for the implementation of the Convention and the Paris Agreement.
The earlier promise of $100 billion by developed countries “came out of thin air”, Singh said. The periodic needs’ assessment is important to know the dynamic ever-increasing costs that are being borne by the developing countries, who are not responsible, but worst affected by the fall-outs of climate change.
The report’s findings will also inform the New Finance Goal that is to begin from 2025 under the Paris Agreement.
For the developing world, the biggest challenge going forward in the process is to put a cost in front of its needs. The new needs report noted, “while most countries have used methodologies to identify and report their needs both qualitatively and quantitatively, costing these needs has been a major challenge and therefore most of these needs do not have accompanying cost estimates. This challenge is particularly evident in deriving cost estimates for climate adaptation and enhancing resilience needs, and in this context, deriving cost estimates for averting, minimising and addressing loss and damage needs, since such actions cannot always be included in short-term projects, they require long-term interventions that are difficult to estimate in monetary value.”
To assess the needs of developing nations, the report analysed sources submitted by these countries, specifically national reports submitted to the UNFCCC. These include sources like adaptation communications, biennial update reports, national adaptation plans, national communications, NDCs, etc. The assessment arrived at different cost estimates for different sources (Table 1).
Of the total required cost of $5.8 trillion–$5.9 trillion up to 2030 for climate actions reported in NDCs by the developing countries, “$502 billion is identified as needs requiring international sources of finance and $112 billion as sources from domestic finance. [While] 89% of the costed needs did not provide information on possible sources of finance”.
If we look at the region wise break-up, Africa and Asia-Pacific regions account for the biggest financial needs. However, the report warned that this can be caused by several factors, including availability of the data on needs.
The NDC data showed that African countries included 1,529 needs in their NDCs, of which 874 had accompanied cost, cumulatively amounting to $2.5 trillion. While NDCs of countries in the Asia-Pacific region include 1,677 needs, of which 630 needs were costed, cumulatively amounting to $3.2–3.3 trillion.