United Nations climate chief Patricia Espinosa called on higher-income countries Thursday to step up and meet their promises toward lower-income countries by mobilizing $100 billion in climate finance per year.
“We need clear signals that commitments made by developed countries to developing countries will become a reality,” Espinosa said, speaking at a virtual event called Financing the Race to Zero, which coincided with Earth Day. “We still don't have those $100 billion with clarity on the table.”
The climate finance event took place in parallel with the first day of U.S. President Joe Biden’s Leaders Summit on Climate, where 40 leaders gathered virtually to discuss ramping up their climate commitments and boosting momentum ahead of the 2021 United Nations Climate Change Conference, or COP26, in November.
“We need clear signals that commitments made by developed countries to developing countries will become a reality.”— Patricia Espinosa, executive secretary, United Nations Framework Convention on Climate Change
The most industrialized countries pledged in 2015 to help low-income nations tackle climate change through mitigation and adaptation by providing yearly aid by 2020. Espinosa said high-income countries’ inability to mobilize the promised cash is damaging trust in their commitment to “this deep transformation.”
A U.N.-appointed independent expert group on climate finance concluded in a December report that “the only realistic scenarios are those in which the $100 billion target is not reached this year.”
The $100 billion finance goal — which the U.N. report specified should be seen as a floor rather than a ceiling — can come from both public and private sources, but previous climate accords have not spelled out how different financial instruments, such as grants and loans, should be counted.
There’s also not full transparency in how climate flows are reported. “Consequently, climate finance provided by some bilaterals is over-reported, in our view in the order of $3-4 billion,” according to the report. It warned that 2021 will be a critical year “to sustain trust between developed and developing countries, maintain momentum in the run-up to COP26, and to forge a new consensus about the necessary climate action and ambition to achieve global carbon neutrality by mid-Century.”
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The report also sketched ways through which higher-income countries can ramp up aid and help transform the climate finance system. It recommended shoring up bilateral climate finance, since that is the source of almost all concessional climate finance and is important for attracting other financing sources.
Multilateral funds, such as the Green Climate Fund, climate investment funds, and the African Development Fund, play a key role in attracting private finance and will need “ambitious replenishments,” the report said. Multilateral development banks and other development finance institutions are the “most effective international means to support enhanced climate action in developing countries,” and to scale up financing, they will have to align their operations with the Paris climate deal and seek better ways to leverage their balance sheets.
Espinosa said she hoped the November COP26 summit will be a “conference of ambition” because “we are very far from where we need to be.”