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Reality check needed on finance to keep people safe in a warming world

International funding for vulnerable countries to adapt to climate change is falling short of needs by tens of billions of dollars each year, as harmful impacts strengthen fast.

When Hurricane Dorian smashed through the Bahamas in 2019, Selwin Hart was the Caribbean board member at the Inter-American Development Bank and saw for himself the “absolute devastation” of island communities razed to the ground by the powerful storm.

“It looked as though a bomb had landed,” said the Barbadian, who now works as special adviser on climate action to the UN secretary-general.

Yet despite island nations being increasingly exposed to the wrath of storms made stronger by a fast-warming ocean, they are struggling to access the international funding they need to keep their people safe from the threat and from rising sea levels.

Wealthy governments are under pressure ahead of November’s COP26 UN climate talks to deliver on an unmet promise to channel $100 billion a year to vulnerable countries from 2020 to help them adapt to global warming and adopt clean energy.

The latest official numbers on climate finance to vulnerable nations show a drop in the money flowing to small island developing states, from $2.1 billion in 2018 to $1.5 billion in 2019, Hart noted.

One huge barrier facing many debt-ridden island nations - whose tourism-reliant economies have been battered by the Covid-19 pandemic - is their relatively high per-capita income, which bars them from accessing most sources of aid.

Hart called for “a common-sense look at the crisis” and new ways to channel much-needed support to such states, not least because building climate-resilient homes and other infrastructure will work out cheaper in the long run.

“There is a very clear business case for helping to support these countries to prepare for the climate disaster that they did not cause… rather than stepping (in) to help them clean up after a hurricane,” said the former climate change negotiator.

His boss, UN chief Antonio Guterres, has in recent months repeatedly urged donors to “balance” their funding between emissions-cutting efforts and measures to adapt to climate shifts - an aim enshrined in the 2015 Paris Agreement.

Specifically, Guterres has called for “at least 50 per cent” of climate finance for developing nations to go to adaptation, with most of it given as grants that do not have to be paid back, rather than loans.

Despite years of lobbying by aid agencies and countries suffering most from more extreme weather and rising seas, that goal is far from being met.

‘Champions’ group 

Data from the Organisation for Economic Co-operation and Development, published last month, shows just a quarter of the nearly $80 billion mobilised in 2019 went to adaptation, while grants accounted for only 27 per cent of public climate finance.

Clare Shakya, director of the climate change group at the London-based International Institute for Environment and Development (IIED), said while total climate finance contributions “are finally getting close to $100 billion” a year, using the cash mainly to boost clean energy is not enough.

“Least developed countries (LDCs) are already dealing with a changed climate and need at least half of that finance to spend on adapting to the new reality,” she said, calling for more to be provided as grants and handed directly to local communities.

“The world owes it to the people who have done least to cause climate change but who are already suffering its effects,” she told the Thomson Reuters Foundation in emailed comments.

Her organisation has convened a new group of donor countries committed to increasing the share of climate finance spent on adaptation and resilience, particularly for LDCs and small island developing states.

Launched last month at the UN General Assembly, ministers from states in the “champions group” - Ireland, the Netherlands, Denmark, Sweden, Britain and Finland - said they wanted to improve the quantity, quality and accessibility of adaptation finance, and urged others to join.

Germany plans to do so, and the United States is also expected to sign up. The hope is that the initiative can create political momentum for a strong statement on boosting funding for adaptation at the COP26 summit, now less than a month away.

“There is an urgent need to build trust, develop a shared understanding of the barriers and challenges around adaptation finance and propose concrete solutions to overcoming these,” Kitty van der Heijden, the Netherlands’ vice-minister for international cooperation, told the group’s launch event.

It remains unclear whether governments at COP26 will back a percentage target for adaptation finance, a specific amount such as an annual $50 billion through to 2025 - the year a new overall finance goal is due to be agreed - or simply commit to reaching the “balance” mentioned in the Paris pact.

A spokesman for Britain’s COP26 team noted advances had been made but more was needed.

For example, G7 countries committed to increase adaptation finance in June, and last month the United States promised to double its overall climate finance to $11.4 billion per year by 2024, which includes a higher allocation for adaptation.

“COP26 provides a moment to recognise recent progress and also agree on further collective means to continue scaling up this support,” the spokesman said in emailed comments.

‘Out of thin air’ 

One key criticism of the $100-billion pledge, first made in 2009, is that it does not reflect the true needs of developing nations trying to tackle climate change on the ground.

The United Nations says poor and vulnerable countries already require $70 billion a year just for adaptation - including things like building flood defences, developing drought-resilient crops and planting more greenery in cities - and that sum could rise to $300 billion a year by 2030.

A study released by the Stockholm Environment Institute last month found adaptation-related finance from governments and development banks to African nations from 2014-2018 was well below $5.5 billion per year - about $5 per person per year.

Harjeet Singh, a senior advisor on climate impacts with Climate Action Network International, said a top priority was for countries to finish crafting national adaptation plans and to cost the measures they intend to take, such as protecting their hospitals and energy networks from more extreme weather.

That would enable more accurate projections of the amount of finance needed to keep people safe, to inform the new global target due to kick in from 2025 or 2026, he said.

But the poorest countries may not have the knowledge and resources to produce such estimates on their own, he noted.

“That process needs to be much more supported - and once that happens it will give us the real picture,” Singh said.

This is vital, he added, “because the $100-billion figure came out of thin air and doesn’t speak to the reality”.

This story was published with permission from Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women’s rights, trafficking and property rights. Visit http://news.trust.org/climate.

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