While the conventional wisdom is that the next financial crash will come from the collapse of the cryptocurrency bubble, climate finance may pose a more serious risk. Mounting evidence suggests that green lending is displaying all the pathologies associated with financial manias.
The IMF’s allocation of $650 billion in special drawing rights in August was long encouraged and widely welcomed. But its follow-up proposal for channeling finance to the most climate-vulnerable countries is so flawed that it would exclude many of the neediest.
The United Nations Climate Change Conference in Glasgow (COP26) fell far short of what is needed for a safe planet, owing mainly to the same lack of trust that has burdened global climate negotiations for almost three decades. Developing countries regard climate change as a crisis caused largely by the rich countries, which they also view as shirking their historical and ongoing responsibility for the crisis. Worried that they will be left paying the bills, many key developing countries, such as India, don’t much care to negotiate or strategize.
The UN Intergovernmental Panel on Climate Change (IPCC) estimates that an annual investment of US $2.4 trillion is needed in the energy sector alone until 2035 to limit temperature rise to below 1.5 °C from pre-industrial levels. Indeed, climate finance takes centre-stage in every world climate meeting under the aegis of the United Nations Framework Convention on Climate Change (UNFCCC). Developed countries committed to channel US $100 billion in climate finance annually by 2020 to developing countries. The commitment for US $100 billion was first announced in Copenhagen Accord in 2009, formalised in the Cancun Agreements of 2010, and reaffirmed by the Paris Agreement in 2015.
African countries want a new system to track funding from wealthy nations that are failing to meet a $100bn annual target to help the developing world tackle climate change, Africa’s lead climate negotiator has said.
The demand highlights tensions ahead of the COP26 climate summit between the world’s 20 largest economies, which are behind 80 percent of greenhouse gas emissions, and developing countries that are bearing the brunt of the effects of global warming.
Investment in new coal-fired power plants persists globally despite misalignment with a net-zero economy and the falling costs of renewable energy technologies. This knowledge brief highlights the political and economic dynamics underpinning recent investments in coal-fired power in 18 high-impact countries (HICs), defined as the countries with the highest absolute gaps in access to electricity. South Asian HICs Bangladesh, India and Pakistan have received the majority of finance commitments to new coal plants since 2013, and African HICs Madagascar, Mozambique, Malawi, Niger and Tanzania all host active coal plant development.
September 23-24, 2021 was the first-ever UN Food Systems Summit, convened to mobilize the highest-priority transformations needed to end hunger through the sustainable production and distribution of food. Transforming food systems to ensure food security for all has never been so urgent.