Africa: Money for Something – Funding a Global Climate Plan
The jury is still out on whether world leaders are ready to turn words into action at COP26. At stake is life as we have known it for millennia.
The recent IPCC report is unequivocal. Many of the climate changes we see around us are irreversible. We can always avoid worst-case scenarios with ambitious and dedicated decarbonization measures, but more extreme weather events and persistent environmental stress are now inevitable.
The bad news is that no country is really prepared. The pandemic could have been faced with a coordinated global response, to preserve lives and livelihoods, but instead revealed the fragility of global governance. As a result, health systems are again strained in several countries and the economic recovery is pushing some regions of the world even further, threatening to preserve and intensify the deep divisions in our world and undermine resilience to future shocks. Far from rebuilding for the better, this type of response inaugurates a new normal of recurrent and intensified health, environmental and economic crises.
The good news is that we still have time to change. The pandemic has been a brutal learning experience, but we can use it to build a different future. In the 2021 Trade and Development Report (TDR) , UNCTAD calls for more efforts in climate change adaptation and a transformative approach based on increasing public investment to adapt to existing and future threats and to mobilize private investment for development sustainable, green industrial policies to diversify economies and create good jobs, and a new vision of multilateral cooperation to strengthen this approach.
The past 50 years have seen an upsurge in natural disasters that have affected all regions, but their economic impacts have been very uneven. Low-income countries have suffered losses that are three times more, relative to the size of their economy, than high-income countries . Persistent inaction has been costly with estimated adaptation costs for developing countries Strongly increasing over the past decade.
Economic and climatic shocks are worsening, trapping developing countries in an eco-development trap of repeated disruption, economic precariousness and dependence on debt. The greater the rise in global temperatures, the greater the damage inflicted. With underfunded health systems, weak infrastructure, undiversified economies, and shrinking political space, these countries are more exposed not only to large-scale environmental shocks, but also to greater economic stress. permanent.
Current policy prescriptions provide only partial relief at best and tend towards a one-size-fits-all approach: building resilience by improving data collection and risk assessment, and providing temporary financial support when shocks subside. materialize. But this approach ignores the systemic nature of climate change, the unpredictability of natural disasters and their vicious, escalating development cycles. Our report shows that adaptation is less about risk management than about development planning. Risk management measures do not change the structures that leave developing countries in a state of permanent vulnerability, a more forward-looking economic transformation strategy is needed.
The proposed market mechanisms and risk reduction strategies may offer temporary benefits, but offer no guarantee that change will take place on the scale and within the necessary timeframe. Rather, the safest option is a climate modernization of the state, empowered to implement green industrial policies, leverage private green finance through better regulations and enhanced coordination, and working with public banks. to support investment for development.
But it will take more than these efforts at the national level to make lasting progress. At this year’s COP, we must see the green shoots of a new global governance regime that is ready to move beyond ambitious rhetoric and provide visionary leadership.
Currently, the internationally agreed target for climate finance that developed countries must provide to developing countries is $ 100 billion a year by 2020, now pushed back to 2023, but new estimates show we can no longer claim that ‘it’s enough. The very first UNFCCC Assessing the needs of developing countries to implement climate plans recently approximated the cost of a cumulative $ 6 trillion by 2030, as UNCTAD reports estimate that $ 2.5 trillion per year, over the next two decades, is the investment target needed to secure Paris Agreement commitments, with a third for adaptation.
Fortunately, we have options, and if there is one thing the pandemic has taught us, it is that advanced countries face very losing financial constraints, free to borrow in their own currencies, at low rates. historically low interest and over long periods. They can finance ambitious public investment programs at home and abroad.
For starters, G7 countries can meet the 0.7% ODA target missed by 2020 by providing an additional $ 155 billion. The redistribution of Special Drawing Rights (SDRs) and the planning of larger allocations could result in a further increase in liquidity of several hundred billion for development ambitions. Debt relief will also be necessary, especially for climate-vulnerable countries, to prevent resources from being diverted to unsustainable debt servicing that prevents an adequate response to current and future climate impacts. Grants and concessional financing from multilateral development banks can be scaled up for adaptation, and well-regulated green bond markets can form an important part of the funding mix.
Stabilizing the climate and rebalancing the world economy is in our power: it is a question of conviction, will and leadership. In a few days, we will be negotiating the future that our children and grandchildren will inherit. If we do it right, Glasgow will be remembered as the place where we stopped stagnating and started transforming.
Rebeca Grynspan of Costa Rica was appointed eighth Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) on September 13, 2021. She is the first woman to hold this position in the history of the organization. .