Countries decide future climate finance

The first point of friction: How much will you have to pay?

The new funding target (the new Collective and Quantitative Target or NCQG) will cover the next five years and replace the previous one, which was agreed in 2009 and according to which countries committed to meet the target by 2020. 100 billion dollars annually to Green Climate FundAccording to Mariana Castaño, an experienced participant in these summits and founder of an environmental consulting firm, this amount has been reached “late and poorly”, she told RTVE.es. 10 billion solutions: This could only, and barely, be achieved in 2022.

But this figure, as agreed in the Paris Agreement, should be the basis for climate financing, not a ceiling. With global warming, which is already being felt with particular toxicity in the form of fires, heat waves, droughts or floods, and to which we must adapt more and more rapidly, previous amount is out of date

And all experts’ calculations indicate that NCQG should be, at least a billion dollars Annually between now and 2030.

In the first days of the summit, the group of least developed countries (known as the G77), reached an agreement on this figure: 1.3 trillion euros (with a b in Spanish, billions In English). The Independent High-Level Expert Group on Climate Finance goes further and estimates that $2.4 trillion should be donated per year by the end of the decade.

Is it realistic to increase funding tenfold when it has taken so long to reach a more modest goal? Javier Andaluz, spokesperson for Ecologists in Action at this summit, is clear. “It’s very realistic. If we compare it to military spending, which is 2.4 billion according to Center Dallas, one billion would be less than half of what is being invested in this area.”

Who has to pay?

Apart from the amount, countries also clash over who should give the money. Until now, only those considered developed in accordance with the United Nations Framework Convention on Climate Change were obliged to pay. USA, European or Japan,

Now, “we’re talking about how to expand that base, and If, for example, China agreed to be part of this base, “Obviously the amount that can be achieved is very different,” says Marta Torres Gunfoss, director of the climate program at the Institute of Sustainable Development and International Relations (IDDRI) in Paris. There has been rapid growth.” , When was this convention agreed and who should pay and who should not.

,Countries considered developed say they cannot pay the bill alone,

“The world today is not the world of 30 years ago. Countries considered developed say they cannot pay the bill alone, and it is countries like China or the rest of the BRICS (Brazil, Russia and India, apart from the Asian giants) that will have to contribute,” says Castaño. The admission of the petrostates of the Middle East into the group of donor countries has also been questioned.

For Andaluz, this is a “futile debate”, with countries of the global North also involved. The United States wants to “distract attention” so that people don’t talk about their “responsibilities.”“Although China is now the world’s leading polluter, US per capita emissions are practically double that and both North American countries and the EU have historically outpaced Beijing in the total percentage of CO₂ sent into the atmosphere.

For this reason, Ecologistas en Accion welcomes the fact that China has also joined the list of donor countries, but they recognize that “The countries of the global North must take a step first”

Since it is difficult for these developed states to “expect others to inject money” if they do not do so.

Onion or avocado?

Talks are also stuck on another point: the structure of the fund. To make this part more understandable, negotiators and activists have resorted to the metaphor of vegetables.

One proposal is that the Climate Fund has Onion-shaped, with multiple layers of public and private financingWhile the second is that it will be more similar avocadoThere is a more significant central share of public financing and another secondary share provided by private donors.

Here conflicts arise between groups, between rich and poor countries. Developing countries, which may have more difficulty accessing private markets, receive priority “Get a commitment of public funds, get more secure and predictable assistance”Instead of sticking to “a figure that seems too big,” explains Torres, “but who doesn’t know how much potential they will have to attract to their area.” They also demand that the help should be direct and not in the form of loan so that the debt does not increase.

On the other hand, industrialized countries like Europe “They have their limits in public financing and they are already implementing cutsSo they don’t want the responsibility to fall solely on public money,” he added.

It is also added that in the United States, so far the main donor of the Green Climate Fund, Donald Trump has returned to power, who has already shown again his intention to withdraw from the Paris Agreement, so it can be anticipated that That they will reduce your contributions or even stop participating in these funds.

For all these reasons, Torres believes it is “very complicated” to reach an agreement on an ambitious economic objective at this summit.

Reform of post-war financial architecture

Underneath all this, a fundamental debate arises about reform of the global financial architecture and its role in Institutions like the International Monetary Fund or the World BankThese institutions were born with the Bretton Woods Agreement after World War II, but more and more voices are being raised to rethink their actions in this new landscape of climate change.

At the COP27 summit in Egypt two years ago, Barbadian Prime Minister Mia Mottley proposed the “Bridgetown Initiative”. Transformation of these institutions so that they become instruments of green transition And reduce pressure on the most indebted countries.

This idea is gaining momentum Developed countries like France have supported this initiativeThere was even a summit at the highest level in Paris last year and the new World Bank President Ajay Banga has also been in favor of it.

However, the experts consulted remind that a The COP does not have the powers to implement this reform. Yes, according to Andaluz, it could “send a signal” that it supports this revision of the financial architecture wherever this decision may be taken, “at the seats of the World Bank, the IMF or the WTO.” He further said, it will be very relevant that the summit coincides with the G20 meeting in Brazil, where these decisions can also be taken.