The world’s publicly funded development banks have pledged to tie together their efforts to save the global economy from the Kovid-19 crisis and climate emergency, using its financial muscle to aid a green recovery for poor countries for.
But the banks pledged to end fossil fuel finance, and set no concrete target for how much money they would dedicate to a green recovery in an announcement signed on Thursday by 450 development banks worldwide.
Poverty and climate campaigners said that publicly funded banks and rich-country governments to overcome funding shortfalls in poor countries and to help reduce greenhouse gas emissions and to deal with the devastation of climate breakdown There is a need to do more.
A report by the OECD Group found that wealthy countries provided approximately $ 79bn in climate finance in 2018, an increase of about 11% over the previous year. However, the annual growth rate has halved: Climate Finance was $ 59bn in 2016, rising 22% to $ 71bn in 2017.
The total is still well below the climate finance goal of $ 100bn per year for developing countries since 2020, more than a decade ago agreed under the United Nations.
The $ 100bn pledge is one of the cornerstones of UN climate negotiations, as poor countries have agreed to curb their greenhouse gas emissions in exchange for receiving such help.
The OECD also found that climate finance from private sector sources had failed to grow to the levels required to reach the $ 100bn target.
Developing countries received approximately $ 14.6 billion in private sector investment in climate-related activities in 2018, ranging from green technology to increased resilience to hurricanes and floods. This figure was much lower than in the previous year, although an increase of about $ 4.5bn from 2016. The average annual increase from 2016–2018 was $ 2.2bn.
There are also wide disparities in how investment is distributed. According to the report, only 14% of climate finance is moving to the least developed countries in the world, and only 2% to “small island developing states” that are at risk of storms and sea level rises.
Oxfam senior policy adviser Tracy Katy said, “This is particularly unjust [as these countries] The climate crisis has done little to create, but is being hit the hardest. Climate finance records are a lifeline for communities experiencing heatwaves, terrible storms and devastating floods. “
She also said that poor countries received a large share of publicly funded finance in the form of loans in lieu of grants. “Rich countries should close their arrivals [climate finance] Figures with debt will have to be repaid, and start increasing grants, especially for the most vulnerable countries to use for adaptation. “
The World Bank told the Guardian that definitions of climate finance were becoming problematic, as global investment had changed dramatically since 2009, when the 2020 finance target was set.
The cost of renewable energy has come down over the last 10 years, and in many parts of the world it is now cheaper than fossil fuel power. This has promoted record levels of investment in clean development, which does not always capture traditional measures of climate finance.
A World Bank official said, “How much countries invest right now is treated as just development, not climate-change investment.” “The discussion about what climate finance is and what is not is very blurred.”
However, campaigners said that very little aid was helping poor countries adapt to the effects of climate breakdown, which rarely attracted private investors.
Charity WaterAid senior policy analyst Jonathan Farr pointed out that water in particular was an important issue, as the impact of extreme weather was felt in droughts, floods and other threats to water supplies.
He said: “We are calling on public development banks to support the package of essential public services, including ensuring access to water, sanitation and hygiene services. This will enable developing countries to be more resilient to both crises now and in the future.
“We must support the three billion people who are facing an epidemic without access to water and soap, need to wash their hands, and two billion who do not have access to safely managed drinking water and from drought Are at risk. Floods and extreme weather due to climate change
Remy The Chief Executive of the French Development Agency, Rioux swore public development banks to increase their focus on climate development and the United Nations’ Sustainable Development Goals, a positive step. “It is a very important part of recovery [from Covid-19], These are concrete steps. It is very important that this direction is set. “
The Banks’ announcement, which also includes commitments for biodiversity, gender equality and human rights, was held at the Finance Conference this December in support of the fifth anniversary of the Paris Climate Agreement by the Government of France. It was held online at a time, scheduled for the UN’s climate summit Cop26, which is now delayed next November.
Odile Renaud-Basso, president of the European Bank for Reconstruction and Development, said: “The Kovid-19 crisis has demonstrated that only joint action allows us to effectively and efficiently address the most urgent global challenges. Overcoming the crisis. For, our goal will be to create economies that are sustainable, resilient and inclusive. “
Marcos Neto, director of the Finance Sector Hub at the United Nations Development Program, said the pledge was an important step by ensuring that banks would align their debt and resources with the goals of the 2015 Paris Climate Agreement, and now it was time for governments to bank. Funded to change their mandate – which may require legislation – to ensure their lending practices to lower emissions.
“Did it happen five years ago? Probably yes, but better late than ever, ”Neto said. “Now I hope to have a very fast transition.”