Relay to COP26 MP Briefing
As hosts of COP26, the UK government must ensure the 2009 commitment to mobilizing $100bn of climate finance is met and exceeded at COP26.
Young people are walking from Cornwall to Glasgow on the Relay to COP26, asking for the UK to lead plans among developed nations to secure this essential promised finance; critical both to ensuring countries are equipped to mitigate and adapt to climate change, and to achieving successful outcomes at COP26.
Please email email@example.com to add your support for the Relay and efforts to secure this finance ahead of COP26.
Young people walk to Glasgow for COP26
Young people from Young Christian Climate Network set out from Carbis Bay in June, just after the G7. They will arrive in Glasgow the night before COP26 in November. Their route is 1,200 miles and involves major events in 10 major UK cities. Their Relay to COP26 is open to all and is being supported by churches across the UK. As they walk, they are seeking the support of decision-makers to ask the UK government as host of COP26 to ensure $100bn is on the table at the beginning of November.
Back in 2009, as part of the Copenhagen Accord, developed nations agreed to jointly mobilise $100bn per year of ‘new and additional finance’ from 2020 to address developing nations’ needs for adaptation and mitigation support.(1)
In 2015, the Paris Agreement clarified this target extends through to 2025.
It is acknowledged that the true need for finance and investment to facilitate decarbonisation and adaptation globally is far higher. However, the $100bn figure quantifies the long-standing UNFCCC treaty obligation of developed countries to provide finance to developing countries and serves as a benchmark for assessing progress in delivery.
It is for this reason that lack of progress is becoming a major sticking point of climate change negotiations, and a source of lost trust. Issues identified include shortfalls in delivery, the opaqueness of accounting by donors, problems with access, and the increasing presence of loans in the portfolio. These are in addition to the lower level resourcing allocated to adaptation in contrast with mitigation.2
It is essential that the UK as the host of COP26 can secure this commitment, ensure transparency on the delivery of this finance, and negotiate the upscaling of finance beyond $100bn across this decade.
Progress on the delivery of $100bn
The OECD estimates that climate finance (bilateral public, multilateral public, officially supported export credits and mobilised private finance) provided and mobilised by developed countries reached $71.2 billion in 2017. However, donor reports continue to overstate climate finance by a huge margin. Once various forms of over-reporting, interest accrual and loan repayments are considered, the true value of finance falls to $22bn – less than half of what developed countries report.(3)
Assessing the flow of finance is also an issue owing to the lack of accountability and common definitions and reporting methodologies. In 2018, the Standing Committee on Finance acknowledged that ‘lack of clarity with regard to the use of different definitions of climate finance limits the comparability of data.’(4)
Despite the different methods of calculating totals of climate finance, the UN concluded at the end of 2020 that the $100bn target had not been met.(5)
Progress on the delivery of $100bn
It was hoped that the G7 meeting in June 2021 would announce considerable progress. However, while Canada, Germany, and Japan all committed new funds, commitments remain far short of what is needed.
As COP26 President Alok Sharma has outlined,(6) this matters because it’s a matter of trust: ‘Developing countries need clarity, and they need confidence that the $100 billion in climate finance will be delivered.’
The UN’s secretary general António Guterres has also strongly expressed(7) the urgency of not only meeting but upscaling this target at COP26 on the same basis.
Most recently, 100 countries jointly published a report emphasising the crucial need to secure this finance.(8) Those backing the plan represent more than half of the world's countries.
The Bigger Picture
For the most climate-vulnerable nations, climate-related costs are rapidly outpacing the provisions of climate finance.
Public debt in developing countries has increased from an average of 40.2% to 62.3% of GDP in the last 10 years.(9) In 2020 alone, developing countries spent $372 billion on servicing their debt – $372 billion that could have gone on new climate-resistant infrastructure and sustainable energy supplies.(10)
In 80% of climate-related disasters since 2000, public debt was higher two years after the disaster took place.(11) What’s more, climate vulnerability increases the cost of borrowing: by 2018, developing countries had paid more than $40 billion in additional interest payments associated with climate change risks.(12)
The dual burden of debt, which has only been furthered by the impacts of the coronavirus pandemic, and the costs of climate risk is exacerbated by the failures of wealthy countries to deliver on their promises.
We urgently need to make financial provision which will allow the world to mitigate and to adapt to climate change without costs pushing the most vulnerable countries into unsustainable debt arrangements.
No COP26 deal without a finance deal
The lack of progress on the decade-old $100bn climate finance commitment now jeopardises international climate negotiations.
We call on the UK government to use its influence to close the 2020 funding gap on the $100bn commitment.
Case Study: Dominica
Dominica already had a government debt level of 71.7% of GDP in 2016, in the aftermath of tropical storm Erika (p. 7). In 2017, Dominica was further devastated by category 5 hurricane Maria, which destroyed over 90% of the island’s structures, causing an estimated US$1.3 billion of damage (226% of GDP). Debt levels rose sharply as a result, reaching 77.6% of GDP in 2017 (p. 4). The IMF has assessed Dominica as being at high risk of debt distress.