Dubai: Not having a consistent definition of climate finance leads to inadequate transparency and insufficient trust among countries, Union environment minister Bhupender Yadav said on Friday, as he raised concerns over the alleged lack of clarity in wealthier countries honouring the $100 billion climate financing commitment they made in 2009.
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At the 15th edition of the Conference of Parties or COP15 in 2009, developed countries had pledged to mobilise $100 billion per year by 2020 for climate action in developing nations.
On November 16, the Organisation for Economic Co-operation and Development (OECD), whichis an intergovernmental organisation of mostly developed countries, said the commitment was likely met, just for a year, in 2022. Developing nations, however, alleged that the promise is yet to be fulfilled.
During a meeting of ministers on climate finance in Dubai, Yadav said: “The lack of definition leads to a lack of trust and transparency on a matter that should be as clear as crystal. According to the OECD, the estimate of climate finance provided and mobilised by developed countries in 2020 was about $83 billion as against an amount of $21 to $24.5 billion, if the Oxfam estimates from their Climate Finance Shadow Report are taken.”
He added: “Today, we are being asked many questions. The most pertinent of them all is to agree upon and ensure a minimum short term action. In my view, the minimum short term action that we need to prioritise and work together for is the very definition of ‘climate finance’. I strongly feel that it is the most fundamental outcome we all can aim for that will automatically lay out the pathways for subsequent action towards appropriate climate financing.”
{{/usCountry}}He added: “Today, we are being asked many questions. The most pertinent of them all is to agree upon and ensure a minimum short term action. In my view, the minimum short term action that we need to prioritise and work together for is the very definition of ‘climate finance’. I strongly feel that it is the most fundamental outcome we all can aim for that will automatically lay out the pathways for subsequent action towards appropriate climate financing.”
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The meeting was attended by ministers from different countries who shared their views on the state of climate finance.
Developing countries have alleged that most of the funds categorised as climate finance are often loans or business investments and no grants, which increases their debt burden.
“The definition of climate finance that takes into account climate specificity, new and additional flows and grants and resources at highly concessional terms is imperative,” Yadav said.
Reiterating the issues flagged by LMDC (Like Minded Developing Countries), Yadav said: “The second point that I want to highlight is the relatively paltry resource flow that needs to scale up several times over, through enhanced provisions and mobilisation by developed countries, including through the financial mechanisms and innovative instruments that enable the mobilisation of finance by the developed countries at an affordable cost.”
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He added: “The flow of finance has to be along with access to technology such as offshore wind, battery storage. In the absence of these, it would not be possible for the developing countries to meet their commitments on the UNFCCC (United Nations Framework Convention on Climate Change) and the Paris Agreement.”
The minister called for mutually agreed standard formats for climate finance delivery, with sufficient disaggregation of the type of finance flow, and what it may mean to allow information to be consistent, predictable, and transparent.