Climate change impacts are undeniable, as evidenced by the devastation left by floods in Spain, deadly hurricanes in the United States, floods in Nepal, and other extreme weather events around the world.
With rising air and sea temperatures, global efforts to address climate change must expand faster than ever. Simply, we need radical shifts, not gradual changes, according to the World Economic Forum.
While there are abundant solutions to mitigate losses and damages, adapt to them, and address them, the missing piece is financing. Only financing can facilitate the urgently required global climate action.
An ambitious goal
The task of drafting an agreement to set an ambitious goal for providing the necessary climate financing falls on the upcoming United Nations Climate Conference (COP29) in Azerbaijan next week.
The new climate finance goal is likely to set the aspirations and standards for climate action for at least the next decade.
The Intergovernmental Panel on Climate Change (IPCC) states that in order to prevent irreversible damage, global greenhouse gas emissions must peak before 2025 and then decrease by 43% by 2030.
The World Economic Forum says that now is the right time for change, as we either see a strong agreement that boosts the necessary funding to achieve the goals of the 2015 Paris Agreement, thus avoiding a worsening crisis, or we miss this critical opportunity and further erode any remaining trust in the multilateral process.
Climate financing is about accountability and fairness rather than charity or generosity. It is strongly founded on the notion of shared but differentiated responsibilities and capabilities, as outlined in the Paris Agreement and the United Nations Framework Convention on Climate Change (UNFCCC).
Those who caused the climate crisis should pay the most for solutions. However, it has proven difficult to agree on this new funding target.
If developed countries and the fossil fuel industry had directly addressed climate change four decades ago, when its effects became clear, the cost of confronting it today, currently estimated to be in the trillions of dollars, would not be as staggering.
Solutions to bridge the gap
Many developed countries believe that private investment can cover the gap; however, profit-seeking financing is inappropriate and unethical in many contexts, especially in cases of loss and damage and adaptation.
Particularly in less developed countries where the business model is unclear, untested, or nonexistent, private funding has yet to yield any results.
Developed countries also refer to multilateral development banks as sources, but most of their funding is provided in the form of loans, which may increase the risk for countries already burdened by debt.
Moreover, loans are unfair, as developing countries repay more than they borrow to solve a problem they did not cause.
Currently, loans account for 69% of total climate financing, entrenching existing inequalities and exacerbating debt crises in poor countries vulnerable to climate change.
The new goal that I have started promoting with NCQG requires basic public grant funding of around one trillion dollars annually, directed towards developing countries in line with their evolving needs.
We must allocate this funding through damage mitigation, adaptation, and loss compensation.
A trillion dollars. Is it a realistic goal?
Is a trillion dollars a realistic and attainable goal? According to the World Economic Forum, this is only possible if efforts are made to leverage novel sources of financing.
Given the abundance of options, we must reframe the funding goal as non-negotiable and engage in serious discussions about creating new funding reserves.
Because the needs are enormous, the responsibility is clear, and the cost of inaction is high, developed countries cannot say they lack financial space.
It's time to stop making promises and finding excuses and start facing this existential moment head-on.
