Feb 02, 2022
Fair Environmental Financing: Between Weak Will and Mismanagement
Hala Murad
Director of Dibeen Association for Environmental Development

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Hala Murad

Fair Environmental Financing: Between Weak Will and Mismanagement - Hala Murad

Climate change is a global environmental issue, which today impacts millions of people, threatening their lives, livelihoods, and well-being. People live in the shadow of a complex set of threats, from the status quo, to the uncertainty of expectations, to an uncertain future, such as in ocean islands like Fiji,1 for example.

It has become clear and certain that no region in the world is not threatened by the consequences of climate change, as shown by the report issued by the Intergovernmental Panel (IPCC) in mid-2021.2 The report indicated that climate changes and their impact will spare no one. However, there will be disparity in the ability to bear those impacts.

Since the Earth Summit in 1992, the world began to recognize the reality and importance of climate change and aspired for cooperative international action. With the increase in the momentum of scientific research, monitoring, follow-up and evaluation, it became clear to everyone that there is a historical responsibility on the shoulders of those whose fortunes were inflated as a result of the industrial revolution. The fundamental question became: Who bears the moral responsibility?

Involved parties began calling for organizing and creating international mechanisms under the UN's umbrella to work in a balanced and effective manner. On one hand, there is a need to mitigate the causes of climate change, i.e., reducing emissions in all possible manners. On the other hand, there is a need to adapt to the consequences of climate change. The mobilization of necessary funds to confront, reduce, and adapt to all manifestations of climate change became a top priority.

Conferences of Parties and Climate Financing

In 2009, a significant development in the course of climate change conferences took place at COP 15 - Copenhagen. The Parties pledged to mobilize $100 billion annually to finance the fight against climate change for developing countries until 2020. It raised the hopes of countries and activists around the world about a new stage of financial responsibility as a path to reducing fossil pollution, climate justice, and forcing the world to move towards the ultimate goal of protecting the planet.

In the 14 conferences prior to COP-15, developing countries and countries facing the main consequences of climate change had mobilized to make countries that are historically responsible for emissions and climate change pledge to mobilize funds for the benefit of developing countries.

Were the financing mechanisms fair and adequate?

What happened after Copenhagen was not enough. However, it indicated the good intentions of poor and developing countries. Two main issues arise when evaluating the fairness of procedures:

The first issue is related to the slow and complicated procedures. The first funding milestone was the creation of the Green Climate Fund (GCF) in 2010, which has received nearly $10.3 billion since its inception. However, it was not implemented until 2014, four years after the GCF's establishment and 6 years following the Copenhagen decisions. Collecting funds from countries was not an easy process. In 2014, only $7.2 billion were collected, as with similar funds for financing development in weak and poor countries. As GCF acknowledged, approving funded projects had to go through a complex mechanism. For example the GCF is yet to fund any of the proposals presented by Jordanian entities. Nevertheless, according to the GCF's website, seven projects in Jordan received funds through international organizations.3

The data above demonstrate that the goal of creating international entities and organizations is to undermine the will of states and peoples. Projects are implemented through grants by proxy without any clear accountability and monitoring mechanism to ascertain the efficiency of project implementation and grant disbursement. Any oversight role by the state, CSOs, and people is thus eliminated. More efforts are needed to ensure that the allocated funds are spent optimally.

Second, financial injustice was at the heart of the Copenhagen decision. It was later confirmed in the Paris agreement, which pledged $100 billion but only secured $79.6 million by 2019. At the last Conference of Parties held in Glasgow in November 2021, developing countries reiterated their demands. They called for the $100 billion pledge to remain in place until 2023 and for reforming distribution methods. The United Nations called for a 50-50 mitigation and adaptation strategy to share funds equally, in line with the effects imposed by climate change on societies that have a strong need to adapt to extreme and evolving climatic conditions. However, the above remains governed by the amount of spending approved by the UN. A recent study showed that for every dollar pledged to confront the climate crisis impacting the world’s poor, four dollars are spent on subsidizing fossil fuels, causing the crisis to persist.

From financing mitigation to financing adaptation: Precluding reparations

2021, the fifth hottest year on record, went contrary to all expectations that the main confrontation with climate change will occur in the developing world. Developed countries in Central Europe, Canada, and the US were exposed to extreme climate incidents that led to extensive damage and loss of human life, despite their advanced capabilities and infrastructure. However, losses suffered by developing countries were estimated at between $290 billion and $580 billion. Prior to the Paris Agreement, developing countries had been calling for a special financing mechanism for damages and losses that are not part of mitigation measures or potential adaptation, but rather to compensate for the damage that has already occurred. Developed countries are thus indebted to developing and poor countries and have a great moral responsibility. However, no real action was taken and the topic was postponed till the next conference, as always. The main challenge in the question of climate justice is that its tools must rise to the level of accountability and prudent action to fulfill the aspirations of the poorest countries to create a special financing facility for damages and losses.

Climate finance is a key negotiation theme followed by activists closely every year. Despite reservations on mechanisms and sometimes unfair methods, what was achieved until today came through the struggles led by poor and island countries in the global south and some international CSOs, which adopt a human rights-based approach to the climate issue. There is still much to be done, especially in terms of solidarity, raising awareness of its importance, and pushing for human responsibility and moral accountability, provided that the tools are in the hands of everyone and for the benefit of the planet and humanity.

Hala Murad

1- International Federation of the Red Cross, Climate Change Impacts on Health and Livelihoods: Fiji Assessment, IFRC Climate Center, April 2021: https://www.climatecentre.org/wp-content/uploads/RCRC_IFRC-Country-assessments-FIJI.pdf

2- Intergovernmental Panel on Climate Change, "Climate  change  widespread,  rapid,  and  intensifying  –  IPCC," IPCC Press Release, 9 August 2021, https://www.ipcc.ch/site/assets/uploads/2021/08/IPCC_WGI-AR6-Press-Release_en.pdf

3- GCF, Jordan Projects: https://www.greenclimate.fund/countries/jordan

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