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A Brief Introduction to the Critical, Complex World of Climate Finance
It’s About More than the Much Discussed $100 Billion “Promise”
One of the most discussed issues at the UN climate meetings in Glasgow, COP26, will be the vague unfulfilled reference in the 2015 Paris Agreement of $100 billion per year for climate actions by developing nations. However, the real story is about the need to redirect trillions of private dollars to climate related investments, a transformation of the financial system finally beginning to happen — but so far not nearly fast enough.
While frequently described as a “broken promise”, the $100 billion figure originated as a “goal” in an “Accord” not formally approved at UN meetings in Copenhagen in 2009. In 2015, the Paris Climate Agreement referenced the earlier text with language still much less than a promise, noting “developed country parties should continue to take the lead in mobilizing climate finance from a wide variety of sources, instruments and channels, noting the significant role of public funds. . .” (italics added). The ambiguity of the Accord and subsequent references to it have been a source of considerable disagreement on the proper accounting of the funds delivered. Climate funding “mobilized” approached $80 billion in 2019 and is likely to be somewhat larger in 2020 according to the intergovernmental organization the OECD, while only $19–22.5 billion in 2017–18…
