COP26 draft decision shifts the goalpost on climate financing

Sticks to $100 billion figure, no separate loss & damage fund proposed; calls for phasing out coal

The draft placed by the 2021 United Nations (UN) Climate Change Conference, also kno­wn as COP26 presidency, which will serve as the negotiating text for the final outcome of the global climate conference, has offered no further enhancement to the climate financing budget and has “urged” the developed world to meet the $100 billion per year target set in 2009. The draft text, for the first time, has also called for phasing out coal and subsidies for fossil fuel.

The negotiating text has, however, steered clear of mentioning a separate fund for loss and damage, something the developing nations have been demanding. India has joined hands with 24 like-minded developing countries to push for climate disaster funding from developed nations, on the ‘polluter pays’ principle.

All that the draft COP decision proposed said was “developed country parties, operating entities of the financial mechanism, UN and intergovernmental organisations, and other bilateral and multilateral institutions, including non-governmental organisations and private sources” should provide enhanced and additional support for activities addressing loss and damage associated with climate change impact.

The text regretted the goal of developed country parties to jointly mobilise $100 billion per year by 2020 had not yet been met, but it did not furnish any number on a budget increase, leaving it to the discretion of the developed nations.

Led by the US, developed countries pledged $100 billion climate financing at COP15 in 2009 for them to shift to a low-carbon future and fund their climate mitigation and adaptability plans. During the 2015 Paris COP21, countries extended the $100-billion goal to 2025. 

The draft text emphasised on the need to mobilise finance from all sources to a level needed to achieve the objective of the convention, including significantly enhanced support for developing country parties beyond the $100 billion per year climate finance mobilisation goal. It also noted the importance of transparency in the implementation of the achievement of the $100-billion goal from 2020 to 2025 and the collective actions contained in the ‘Climate Finance Delivery Plan’.

India has already expressed “deep disappointment” over allocation of resources by the developed world. “We record our deep disappointment with the deliberations in COP26 so far. Developed countries must accept the historical responsibility and provide the financial resources to the developing countries,” India said in a statement at the first high-level ministerial dialogue on climate finance on Monday.

Reacting to the draft text, Greenpeace International Executive Director Jennifer Morgan said the draft deal was not a plan to solve the climate crisis. It’s an agreement that “we will all cross our fingers and hope for the best”.

Morgan said, “The text needs to be much stronger on finance and adaptation and needs to include real numbers in the hundreds of billions, with a delivery plan for richer countries to support less developed nations. We need to see a deal that commits countries to coming back every year with newer and better plans until together they get us over the bar and we can stay below 1.5°C of warming.” She said the draft reads like it’s a polite request that countries maybe, possibly, do more next year. 

The text also called upon parties to accelerate the phasing out of coal and subsidies for fossil fuels. The draft text said it recognises that the impact of climate change will be much “lower at the temperature increase of 1.5°C, compared to 2°C, and resolves to pursue efforts to limit the temperature increase to 1.5°C”.

“Limiting global warming to 1.5°C by 2100 requires rapid, deep, and sustained reductions in global greenhouse gas emissions, including reducing global carbon dioxide emissions by 45 per cent by 2030 relative to the 2010 level and to net zero around mid-century,” said the draft.

The draft has noted two contributions — $350 million to the Adaptation Fund, which the UN claims is a record highest amount, and $413 million to the Least Developed Countries Fund. However, in comparison to the demands, it is still low, point out experts.

India’s climate action plan mentions the need for $2.5 trillion funding by 2030. African nations estimated they will need $1.3 trillion per year by 2030. The recent UN Framework Convention on Climate Change report on needs assessment brings up a figure of $6 trillion just for 40 per cent of the climate plans submitted.

Mohamed Adow, director, Power Shift Africa — an energy and climate think tank — said the draft was a very lopsided document. “For the first time a COP text explicitly calls for phasing out coal and fossil fuel subsidies. But on the key demands of vulnerable countries, there is very little. On helping these countries adapt to climate impact and deal with permanent loss and damage, it is very fuzzy. The fact that the deadline for the long-promised $100 billion of climate finance from rich countries has been missed doesn’t even get mentioned,” said Adow.