Center stage, COP25 seems to be all about money. The negotiations regarding climate finance and adaptation have made little progress this past week because of an ongoing conflict that has dominated negotiations since before the Kyoto Protocol: developed versus developing nations, and their associated financial responsibilities. Existing international legal instruments do not lend themselves to proper management of this ongoing conflict between developed and developing nations, and so it is now manifesting within the COP25 negotiations on the issues of climate finance and loss and damage.
It is well established that the developed countries are to blame for the amount of greenhouse gases in the atmosphere that is contributing to climate change. However, these developed countries are not the ones who will suffer the most from the perils of extreme flooding and drought. Developed countries for the last century grew their economy by burning fossil fuels and continue to burn a disproportional amount compared to developing countries. Although wealthier countries pledged to donate significant amounts of money to developing countries for mitigation and adaptation under the Paris Agreement, the climate-specific assistance given is far less than what was promised.
The issue of lack of adequate finance is most prevalent in the Climate Finance negotiations. Although the Green Climate Fund (GCF) was recently replenished in October 2019, raising $9.7 billion, these are merely pledges, and the fund will not be operational until these pledges turn into commitments, or money in the bank. Additionally, at COP16, as part of the Cancun Agreement, developed countries committed to a goal of mobilizing $100 billion per year by 2020 to address the needs of developing countries.
Nearly a decade later, several developing countries now seek an update on the status of this commitment, especially in the sessions dedicated to long-term climate finance. Developing countries see sessions on Long Term Finance, in particular, to discuss climate finance from a strategic perspective. AOSIS is very active in these discussions and has proposed a draft text. Developing countries suggest that they continue to face barriers in accessing climate finance and would benefit from access to simpler modalities of climate funds (such as streamlined access to GCF funding), favorable regulatory and policy environments, and provision of capacity-building and technical support.
There seems to be a disconnect between the stalling negotiations surrounding the Warsaw International Mechanism for Loss and Damage (WIM), and the galvanized international community calling for a financial response to the climate emergency. According to the United Nations, climate disasters are increasing in both frequency (one per week) and cost ($300 billion per year). In advance of COP25, in an open letter to Carolina Schmidt, Chile’s Environmental Minister and COP25 President, over 150 civil societies (e.g., Oxfam, 350.org), called for an end to the stalemate in the negotiations on WIM, and endorsed a funding facility for vulnerable countries. Yet, negotiators cannot seem to move beyond the question of who will provide the support to address loss and damage. Developing countries expect that developed countries will facilitate the mobilization of both technical and financial support to address loss and damage associated with climate change impacts. Earlier this week, like-minded developing countries called for a new financial mechanism and are trying to establish a Loss and Damage Finance Facility under WIM.
Developed countries are worried that such a financial facility makes the UNFCCC a humanitarian agency and establishes liability for the irreversible impact of climate change. But as parties negotiate the mechanics of finance, one thing they can all agree upon is the need for, and role of, money in driving action to address the climate emergency. As we head into the second week of negotiations, it remains to be seen whether the negotiations can move forward with a “Show Me the Money!” mentality.