Fighting Crises With Cash, Except for the Climate Crisis
During a visit to the United Nations climate summit in Dubai, Vice President Kamala Harris promised $3 billion for the Green Climate Fund, which benefits poorer nations. However, officials from the Biden administration are already acknowledging that persuading Congress to approve the money will be a struggle.
In addition to this, John Kerry, President Biden’s climate envoy, announced a new carbon credit initiative at the climate summit in which major companies like Walmart, Pepsi, and McDonald’s will help developing countries transition to renewable energy. This initiative acknowledges that governments are not providing sufficient funding for the energy transition.
One of the challenges facing the summit is whether it can secure the necessary funds. Numerous promises and discussions are taking place at the meeting, including the tripling of renewable energy, adapting to the impacts of climate change, and compensating countries for losses. However, all of these efforts require significant amounts of money.
A major shortfall in funding is for developing countries to cope with climate impacts like rising sea levels and extreme heat. Rich countries have actually reduced their aid for climate adaptation efforts, while the needs of developing countries have grown. There is an estimated need for $215 billion to $387 billion per year between now and 2030 for climate adaptation alone, but current finance flows fall far short of that.
The goal of tripling renewable energy worldwide would require a significant increase in clean energy spending. The International Energy Agency suggests that clean energy investment needs to reach $4.5 trillion annually by 2025, compared to the current $1.8 trillion. The insufficient financing flowing to developing countries hampers the progress of the renewables revolution.
While some progress has been made in climate negotiations this year, with the $100 billion in annual climate aid agreed upon by rich countries finally coming through (though three years late), there is still a long way to go. Countries approved a new fund for compensating poor countries for losses and damages, but it remains voluntary for now and has only $420 million available.
The United States, as the largest historical climate polluter, is facing pressure to increase its public financing at the summit. The Biden administration has pledged to deliver $11.4 billion annually in climate assistance by 2024, with over $9 billion expected to be delivered this year. However, delivering on these promises depends on a divided Congress and future administrations.
Facing opposition from Republicans who control the House, the United States is struggling to secure international climate aid. Congress has consistently cut funding requests, and there is a lack of support for spending on global climate assistance. The Biden administration has prioritized military aid, natural disaster response, and domestic issues in its requests to Congress, while international climate finance has been left out.
Transferring funds to other countries is currently unpopular in the United States, with the country focusing on its own priorities. The country’s inward turn and populist mindset make it challenging to allocate funds for the climate crisis. Additionally, funding expensive wars is another obstacle.
In summary, while wealthy countries have a track record of finding money during crises, securing funds for the climate crisis is proving to be a more complex task. International climate finance is facing difficulties in receiving approval from Congress, and the focus has been on other priorities. The need for significant funding to address climate impacts and transition to renewable energy remains unmet, and developing countries are feeling the impact of unfulfilled aid promises.