Will the climate finance pledges from COP26 ever materialise?

The 26th United Nations Climate Change Conference (COP26) ended on November 13, 2021, a day after the scheduled date of closing. This has become almost a regular practice, and the issue that mainly causes this time extension is climate finance, the most intractable of all agendas under the UN Framework Convention on Climate Change (UNFCCC). The core climate finance issues at this COP, among others, were the delivery of USD 100 billion yearly fund by 2020, a new quantified goal to mobilise from 2025 taking USD 100 billion as the floor, adaptation finance, and finance for Loss and Damage.

It may be recalled that both under the UNFCCC and the Paris Agreement, developed countries have assumed legally-binding responsibility to support the developing countries in addressing climate change (using the language "shall provide"). Also, more than a decade ago, at COP16 in Cancun, developed countries pledged to deliver USD 100 billion a year by 2020. The goal has not been met yet—the claimed delivery by the rich countries of about USD 79 billion in 2018-2019 is deflated down more than three times by Oxfam, which estimates that only USD 19-22 billion can be considered as net climate finance. However, at COP26, the developed countries expressed "deep regret" in not fulfilling the previous pledges, and now they have pledged again to reach that amount each year through to 2025. About the new quantified goal from 2025, an agreement of establishing a road map for this has been reached.

Again, the new pledges from developed countries are plenty: USD 11.4 billion per year by 2024 will be given by the US, and USD 3 billion specifically for climate adaptation; the UK will double its climate finance to USD 11.6 billion between 2020 and 2025; Japan has offered USD 10 billion over the next five years for reducing emissions in Asia; Canada has announced to double its climate finance contribution to USD 5.3 billion by 2025; Norway committed to tripling its adaptation finance; Australia said it would double its contribution, too. It is estimated that if all pledges are kept, the total amount of climate finance is likely to reach around USD 96 billion next year!

But will it actually become a reality? The history of climate finance delivery does not evoke much confidence in that regard.

Adaptation and its financing were of particular importance at COP26, in view of the latest report by the Intergovernmental Panel on Climate Change (IPCC) on the increasing impacts of climate change, which keeps savagely battering the low-income countries with poor adaptive capacity. The decision established a work programme to define the global goal on adaptation agreed under Article 7 of the Paris Agreement. This is expected to identify collective needs and how they can be met. The deal offered a promise to double adaptation finance by 2025 from the 2019 level, taking it to around USD 40 billion a year. But there is no guarantee that this goal will be reached. A UN committee will report on progress towards delivering the USD 100 billion per year, to be discussed again in 2024. However, COP26 has witnessed the highest ever commitments of climate finance to vulnerable low-income countries, about USD 450 million, as well as a commitment of USD 232 million to the Adaptation Fund, also the highest ever committed in a year. This fund can be accessed by all developing countries.

Furthermore, the UK pledged 27.5 million pounds for the new Urban Climate Action Programme (UCAP) to support cities targeting net zero emissions. The programme will support cities across Africa, Asia and Latin America to take climate action, by helping them implement innovative plans to become carbon neutral by 2050, and prepare low-carbon infrastructure projects to reduce emissions. The programme will be delivered in partnership with the C40 Cities Climate Leadership Group, a global network focused on climate action, and the GIZ, the German development agency.

However, for the agenda of Loss and Damage under Article 8 of the Paris Agreement, no dedicated financing has been agreed upon, though the developing countries, together with the Climate Vulnerable Forum which is chaired by Prime Minister Sheikh Hasina, have been calling for such a funding mechanism. But COP26 marks the first time that some action has been taken to respond to that request, operationalising the Santiago Network on Loss and Damage, agreed upon at COP25. This SNLD will basically serve as a technical advisory body, for which a few million dollars have been promised.

Another issue drew the attention of global leaders: the commitment to a shift towards locally-led adaptation—an action track of the now-defunct Global Commission on Adaptation—which Bangladesh agreed to lead. As experience has shown, centrally administered adaptation actions have not brought in the desired outcome. As climate impacts happen locally and spatially, it is the local governments and communities which must take the lead in designing and implementing the adaptation projects/programmes. So a major share of the pledged money is expected to be delivered down for implementing the locally-led adaptation, though only three to four percent of climate finance now reaches the local level. It may be mentioned that the LDC Vision 2050 has set the target of delivering 70 percent of climate finance down to local adaptation actions.

Finally, we may recall that Lord Nicholas Stern, former chief economist at the World Bank and the doyen of the economics of climate change, has been arguing for years that the alibi that developed countries cannot afford the money as climate finance is simply reckless—this means they don't bother much about climate change, and the red signals of the successive IPCC reports fall on deaf ears. Against this continued paucity in climate finance, developed countries could mobilise over USD 11 trillion as stimulus packages for saving their economies from the Covid-19 fallout, but just one percent of it could go well over USD 100 billion as pledged. They seem to be not caring about the legal obligations agreed under the climate regime, and continue to renege the earlier pledges. Will this deluge of new pledges at COP26 see the light of the day? Is there any chance of winning over the nationalist streaks by a world of rapidly increasing vulnerability interdependence? How long can the disconnect continue between climate science and climate policy? Perhaps the frontline poor victims of climate change will have to wait for Godot—like the tragicomedy of Samuel Beckett!

Dr Mizan R Khan is deputy director of the International Centre for Climate Change and Development (ICCCAD) at Independent University, Bangladesh (IUB), and programme director of the LDC Universities' Consortium on Climate Change (LUCCC).