The case for mission-driven climate finance

GABORONE — As sea levels rise, Tuvalu, a small archipelago in the Pacific Ocean, is slowly disappearing under water. Australia recently signed a landmark agreement with the island state that offers residency to Tuvaluans displaced by climate change, a sign of the emerging economic, geopolitical, and humanitarian implications of global warming. Tuvalu’s reckoning with its potential extinction offers a glimpse of what the future holds on a rapidly warming planet.

And yet many policymakers seem oblivious to the transboundary nature of the climate crisis and its imminent impact on all countries. Research shows that 3.6 billion people, nearly half of the global population, now live in areas that are highly susceptible to climate change. People in the world’s poorest countries, in particular, women, girls and indigenous communities, are especially vulnerable to its effects, despite contributing the least to creating the problem.

These populations often rely on the natural environment for their survival, which means that extreme weather events are more likely to destroy their lives and livelihoods. Over the last decade alone, natural disasters in the poorest countries have resulted in a threefold increase in economic damage compared to three decades ago and the reversal of hard-won development gains.

Developing countries cannot be left alone to face the frightening consequences of global warming. The severity of the current and future effects of climate change will depend on the world’s ability to advance collective adaptation, mitigation, and resilience-building goals in a gender-sensitive and inclusive manner. These efforts must put human welfare and our planet’s health front and centre, which implies capitalising on the wealth of knowledge that indigenous communities have amassed. Equally important, they will require adopting innovative, efficient, transparent and equitable financing solutions.

The agreement at last year’s United Nations Climate Change Conference (COP28) to operationalise the loss and damage fund, which will provide financial assistance to climate-vulnerable countries, is a step in the right direction. However, the initial pledges of $700 million fall short of the $215-387 billion that developing countries will need annually up to 2030 to meet their adaptation needs. As the UN Framework Convention on Climate Change executive secretary, Simon Stiell, stated, the loss and damage fund “is in no way a replacement for, or a reason to diminish, the urgent need for the scaling-up of adaptation finance”.

Moreover, around $4.3 trillion per year must be invested in clean energy until 2030 to reach net-zero emissions by 2050. This further highlights the urgent need to establish a comprehensive adaptation framework with monetary, qualitative and quantitative targets that can be used to secure financing from high-income countries.

The incremental progress on climate finance achieved at COP28 is not ambitious enough. To pursue climate action that meets the needs of vulnerable and indigenous communities will require a mission-oriented approach to financing that focuses on achieving the most efficient and just transition. It will also be necessary to scale up investment in mitigation and adaptation efforts dramatically. At COP28, for example, governments agreed to triplerenewable-energy production capacity and transition away from fossil fuels. To succeed, they will need to make bold, concrete commitments to boost transition finance.

Africa provides abundant evidence that climate finance continues to be unjust and insufficient. The continent is disproportionately affected by climate change (even though it contributes the least to greenhouse-gas emissions). Between 2016 and 2019, however, it received only 3 per cent of global climate-finance flows, despite various initiatives aimed at supporting climate adaptation and mitigation on the continent.

Africa can play a leadership role in defining and championing progress and could even become a model for innovative, efficient and equitable climate-finance deployment. African institutions, including the African Export-Import Bank, the African Development Bank, and the African Risk Capacity Group, are reputable partners with experience in financing and in navigating the political and economic environment on the continent. But we must urgently close the gap; climate shocks are exacerbating tensions in fragile areas such as the Sahel, fueling mass migration and security concerns worldwide, and disrupting global supply chains and trade.

Africa has the ideas, ambition, and capacity to implement climate solutions. For example, we have identified dozens of shovel-ready green projects that only need a financial push to get off the ground. The continent is also home to some remarkable women who are leading the fight against global warming. I have collaborated with some of these climate champions, whose dedication and expertise are second to none.

The Global South has immense potential to achieve a just transition and build climate resilience. All that is missing is the funding. Governments of high-income countries, multilateral institutions, the private sector, and international organisations should provide the necessary investment, while also ensuring that women have a say in the development of climate-finance strategies. But first, they must stop seeing investing in our countries as a risk — and understand that the real risk lies in the failure to act swiftly enough. It is time to rebuild trust and reconceive development cooperation through just, equitable and financed frameworks.

Bogolo Kenewendo, a former minister of investment, trade and industry in Botswana, is special adviser for the UN High-Level Climate Champions and a member of the Ellen Johnson Sirleaf Presidential Centre for Women and Development’s Amujae Initiative. Copyright: Project Syndicate, 2024. www.project-syndicate.org