As someone who works with Climate Finance everyday, you can imagine why I am worried about making sure we have clarity on how finance is delivered.
But the finance section continues to be marred in vague rhetoric with the crucial terms regarding the nature of the money such as “new, additional, adequate, predictable, accessible, sustained and scaled up” all in brackets.
This could leave us in negotiating rooms for a long time to come.
It also fails to indicate how climate considerations will be integrated into international development assistance, which makes it unclear whether there would be overlap between finance for development and climate finance.
While the agreement says funds will be provided for both mitigation and adaptation and “aim to achieve a balance” between the two, it also does not make it clear what proportion of the funds will be dedicated for which purpose.
This level of vagueness can’t help anyone – it does add flexibility for donors, but that may also open up gaps for developed countries to sneak through.
The finance will be mobilized through a “variety of sources, instruments and channels” which leaves us wondering how much would be grants and how much would be government co-financing, soft loans, and efforts to leverage private sector funds.
The agreement does however indicate some positive elements. Highlighting “a progression beyond positive efforts” regarding climate finance, which could indicate that the figure of $100 billion per year would become a floor rather than a ceiling.
However, it is to be noted that this infamous $100 billion is essentially a political-symbolic figure. It is not based on any needs based assessment of adaptation or mitigation that will both occur through political will and inevitability.
In fact, UNEP’s the Adaptation Gap Report finds that the likely increase in adaptation costs with current emissions reductions is 2 to 3 times higher.
Extending this analysis to all developing countries indicates a chance that adaptation costs could climb as high as $150 billion by 2025/2030 and $250-500 billion per year by 2050.