In a powerful demonstration of solidarity, governments, businesses, investors and philanthropies have mobilised more than $57 billion across the climate agenda in just the first four days of the COP28 Summit at Expo City Dubai in the UAE.
Climate finance is a key topic of discussion at the fortnight-long conference as it has been a bone of contention between low-income countries and developed countries. It refers to large-scale investments to mitigate or adapt to the consequences of climate change.
Adaptation involves anticipating the adverse effects of climate change and taking appropriate actions to minimise or altogether prevent the damage they can cause. For instance, adaptation could include building infrastructure to protect coastal areas from sea-level rise.
On the other hand, mitigation involves reducing greenhouse gases emissions in an effort to make the brutal effects of climate change less intense. Mitigation can be done, for instance, by expanding forest cover and increasing the share of renewable energy sources.
How Much Climate Finance Do Developing Nations Need?
Developing countries have long been arguing that developed nations should provide financial assistance to them because it was due to the (now) rich world’s emissions over the last 150 years that triggered the climate problem in the first place.
A 2021 analysis by the UN Framework Convention on Climate Change standing committee said developing countries need at least $5.8 trillion by 2030 to meet their requirements. This means they need around $600 billion every year – much lower than the amount promised.
To make matters worse, a report by the London School of Economics said these figures could be an underestimate. The UNFCCC estimate also doesn’t include the huge expenses that governments incur to tackle the impacts of floods, droughts and other disasters.
Last year, renowned climate economist Nicholas Stern estimated in his report that about $2 trillion will be needed each year by the end of the decade to help developing countries reduce their GHG emissions and address the effects of climate breakdown.
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How Much Climate Finance Is Being Provided?
Different organisations have debated over the actual amount being provided. In 2022, the Organisation for Economic Cooperation and Development (OECD) said the developed world provided $83.3 billion in 2020 as climate finance. But Oxfam contested the figure.
