Climate funding undershoots real needs, but hope grows for future

UN climate talks in Poland over the past two weeks failed to deliver enough new funding for poor countries that are already suffering as the world warms, but did take some steps towards narrowing the shortfall in the future, experts said.

About 10 national and regional governments, mainly in Europe, announced fresh contributions to key global climate funds.

Germany led the way in pledging an additional 1.5 billion euros ($1.7 billion) for the Green Climate Fund (GCF), as it moves to refill its coffers next year.

Norway also promised to double its contribution to the GCF, while the UN Adaptation Fund - which backs projects to help developing nations adjust to climate extremes and rising seas - received about $129 million in new donations, its best year since it was launched in 2007.

But finance experts and officials said the cash, while welcome, fell far short of the amount needed for vulnerable states to adopt clean energy and keep their people safe from worsening floods, droughts, storms and other threats.

"Levels of climate finance must meet the actual costs for our countries to adapt and address the impacts of climate change, to protect our people and our communities," said Gebru Jember Endalew of Ethiopia, chair of the Least Developed Countries (LDC) Group at the negotiations.

"Our countries also have ambitious plans to tackle climate change and develop sustainably, but we currently lack the resources to make those plans a reality," he said in a statement after the talks ended on Saturday evening.

The LDC group has said that developing countries overall would require more than $4 trillion to put into practice the plans they have submitted to the United Nations under the 2015 Paris Agreement on climate change.

Such plans, by all countries, are jointly intended to hold global temperature rise to "well below" 2 degrees Celsius, and ideally under 1.5C, compared to pre-industrial times.

Joe Thwaites, a sustainable finance researcher with the World Resources Institute, said a decision in Poland to assess developing-country needs in implementing those plans every four years, starting from 2020, was a "significant breakthrough".

That assessment, produced by an expert committee, could shape discussions on setting a new target for international funding for developing countries, above a floor of $100 billion a year for 2020-2025, he said.

The climate conference in the Polish city of Katowice agreed that the process to set a post-2025 goal would begin in late 2020 - something poorer nations had been pushing for.

"They don't want a situation, as happened with the $100 billion, when it was figured out in a matter of hours," Thwaites said, referring to a last-minute scramble in 2009.

A more measured approach should result in a new goal that better reflects real needs, focuses on closing gaps in funding, particularly for adaptation, and is far more specific in terms of what can be counted towards it, he added.

The ambiguity of what wealthy governments can report as climate finance for vulnerable countries - including loans and export credit guarantees - has been controversial.

The "rule book" hammered out in Katowice as the basis for implementing the Paris Agreement failed to rectify that, said Brandon Wu, policy director at ActionAid USA.

For example, the United States could offer a $10-million commercial loan to Uganda for a climate project that would have to be repaid with interest, but could still count it as financial support, he said.

"That would make the collective goal meaningless," Wu told the Thomson Reuters Foundation.

MORE AMBITION IN 2019?

The State Department noted after the Katowice talks that the United States "is not taking on any burdens or financial pledges in support of the Paris Agreement and will not allow climate agreements to be used as a vehicle to redistribute wealth".

That statement was in line with US President Donald Trump's decision to pull out of the accord, and to renege on two-thirds of a $3-billion pledge to the Green Climate Fund made under his predecessor.

Despite the relatively sparse new funding announced in Katowice, experts said the "rule book" would provide more transparency around the amounts provided, as well as some predictability in what donors are willing to stump up in the future.

Attention in 2019 will shift to replenishing the coffers of the GCF, which garnered promises of more than $10 billion in its initial fundraising effort.

A climate summit organised by the UN chief in September also will be a major focus, experts said.

In a statement issued as the Katowice talks closed, UN Secretary-General Antonio Guterres said boosting ambition on finance would be one of his five priorities next year as he tries to motivate countries to ramp up action on global warming.

"It is our duty to reach for more and I count on all of you to raise ambitions so that we can beat back climate change," he said.