A breakdown of all the money pledged at COP28

By | December 19, 2023

At COP28, the annual United Nations climate summit in Dubai, countries stepped up their climate pledges and signed a voluntary agreement to “[transition] away from fossil fuels in energy systems, in a fair, orderly and equitable manner.”

But how the energy transition will be financed – and who will pay for it – remains a major point of contention.

According to the organizers of the summit in the United Arab Emirates, more than $85 billion was allocated for climate finance during the summit. The UAE scored an early victory on day one with an agreement pledging $700 million for the Loss and Damages Fund, which provides financial assistance to vulnerable countries facing major economic losses from the climate crisis – although many officials say that this figure does not meet what is needed.

“Finance is the big driver of climate action,” said Simon Stiell, the UN’s executive secretary on climate change. “Loss and damage was a victory, but we are fooling ourselves if we think this is a check box for funding and support at this COP; more is needed. We need more transparency and to deliver on our commitment to fund climate action around the world.”

Stiell’s comments reflect findings of a climate finance gap between current commitments and those needed for an orderly transition. According to a UN report, countries will need to collectively spend $300 billion a year by 2030 and $500 billion by 2050 to adapt to climate change. The UN also estimates that developing countries will need ten to eighteen times more adaptation financing than currently earmarked.

A chorus of leaders at COP28 pointed to the need to accelerate climate finance and close the gap, as the longer countries delay investing in the energy transition, the more expensive it will be. Yet there has been some momentum in the past year.

According to the OECD, the world’s developed countries may have fulfilled their 2009 pledge of $100 billion per year to developing countries for the first time by 2022. This unfulfilled promise has eroded goodwill between countries at previous COPs and was held up as an example of the gap between ambition and action.

“This is probably the biggest progress we have seen on the financial front in the last 12 months,” Barbados Prime Minister Mia Mottley told reporters in Dubai. “But we are not yet where we need to be.”

Loss and damage: $792 million

As of December 10, countries have collectively pledged $792 million to help vulnerable countries recover from climate-related disasters. France, Italy, Germany and the UAE were the biggest contributors, each pledging at least $100 million, according to the National Resources Defense Council, while the US donated $17.5 million.

The fund was established in 2022 to address a fundamental inequality between countries; Although poorer countries are among the lowest emitters of greenhouse gases in the world and bear less responsibility for causing the problem, they suffer disproportionately from climate impacts such as rising sea levels, heat waves, drought, forest fires and other extreme weather events.

Several organizations estimate that the annual cost of climate-related damage worldwide ranges from $100 billion to $580 billion, with a recent study finding that climate damage exceeds $400 billion per year. Using the latter figure, it means that loss and damage commitments only cover 0.002% of annual losses from climate disasters.

In his closing remarks, UN Secretary-General António Guterres noted that the new funding commitments represented “building blocks for progress… even if the financial commitments are very limited.”

The logo of the United Nations Climate Change Conference COP28 is pictured at Expo City in Dubai on December 12, 2023. (Photo by Giuseppe CACACE / AFP)

The logo of the United Nations Climate Change Conference COP28 is pictured at Expo City in Dubai on December 12, 2023. (Giuseppe CACACE / AFP) (GIUSEPPE CACACE via Getty Images)

Adaptation funding: $61 billion

Additional funding was made available to get climate projects off the ground that will drive the global energy transition and help countries adapt to climate change.

On December 1, the UAE announced a $30 billion fund, called ALTÉRRA, “to steer private markets toward climate investments and focus on transforming emerging markets and developing economies.” The fund targets $250 billion in investments by 2030 to bring more private financing to the South.

Millions more were secured funds to support climate adaptation that will help countries implement their transition plans.

Multilateral development banks have pledged $31.6 billion for climate funds. Of these, the World Bank has increased its target for financing climate projects to a 45% share of total financing by 2025, up from 35% previously. The increase of about $9 billion a year comes on top of expanded clauses allowing countries recovering from climate disasters to suspend their debts, a reform advocated by Barbados’ Mottley.

Barbados Prime Minister Mia Mottley speaks during a plenary session at the COP28 UN Climate Summit, Saturday, December 2, 2023, in Dubai, United Arab Emirates.  (AP Photo/Rafiq Maqbool)Barbados Prime Minister Mia Mottley speaks during a plenary session at the COP28 UN Climate Summit, Saturday, December 2, 2023, in Dubai, United Arab Emirates.  (AP Photo/Rafiq Maqbool)

Barbados Prime Minister Mia Mottley speaks during a plenary session at the COP28 UN Climate Summit, Saturday, December 2, 2023, in Dubai, United Arab Emirates. (Rafiq Maqbool/AP Photo/) (ASSOCIATED PRESS)

At the same time, the UAE has also committed US$200 million in Special Drawing Rights (SDRs) for the International Monetary Fund (IMF) Resilience and Sustainability Trust.

Additionally, the Adaptation Fund saw $134 million in new commitments, while the Least Developed Countries Fund added $129.3 million in commitments and the Special Climate Change Fund (SCCF) raised $31 million.

Green Climate Fund: $12.8 billion

The largest international fund for climate action in developing countries has reached its highest level of funding to date.

A total of 31 countries have pledged $12.8 billion for the second replenishment of the Green Climate Fund. The fund’s initial mobilization and first replenishment, in 2014 and 2019 respectively, raised approximately $10 billion each.

The US was the largest contributor to the Green Climate Fund, matching the initial pledge of $3 billion, while the next three largest contributors – Britain, Germany and France – pledged an average of around $2 billion.

Over the next four years, the Green Climate Fund will use the funds to implement climate adaptation and mitigation projects, ranging from flood risk management to increasing access to renewable electricity.

Food, water, health and other initiatives: $8.75 billion

The money flowed into a host of other climate-related issues affecting lives and livelihoods.

The UAE pledged $150 million for solutions to water scarcity, and the summit’s final framework recognized the importance of water challenges exacerbated by climate change, water scarcity, sanitation and access to resilience amid water-related disasters.

Hundreds of spectators gather at the Nazare Lighthouse in Nazare, Portugal, on November 5, 2023, to take advantage of the predicted giant waves. Hundreds of spectators gather at the Nazare Lighthouse in Nazare, Portugal, on November 5, 2023, to take advantage of the predicted giant waves.

Hundreds of spectators gather at the Nazare Lighthouse in Nazare, Portugal, on November 5, 2023, to take advantage of the predicted giant waves. (Guillaume Pinon/NurPhoto via Getty Images) (NurPhoto via Getty Images)

The UAE also pledged another $2.9 billion for health initiatives, including $58 million allocated by the Bill and Melinda Gates Foundation, $7 million from the Asian Development Bank and $100 million from the Rockefeller Foundation, the World Health Organization said. .

Food resilience was also prioritized, with countries and organizations spending $3.1 billion to reduce agricultural emissions, reduce deforestation and limit climate-related crop losses. Participants praised the increased attention to this topic during the summit, although they cautioned that progress, as with other climate-related financial commitments, depends on meeting those commitments.

Governments and other actors also mobilized $2.6 billion for nature, including $186.6 million in new financing for forests, mangroves and the ocean.

“The many commitments we heard at COP28, while welcome, are just a drop in the bucket compared to what is needed,” said Stephen Cornelius, deputy global climate and energy lead at the World Wildlife Fund (WWF). , in a statement. “The funding pot will now have to grow by orders of magnitude to be able to adequately help people in need.”

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