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Worldwide MDB climate finance reaches nearly $100 billion
Multilateral development banks (MDBs) have managed to raise $ 100 billion in climate finance for mitigation as well as adaptation efforts last year, a new report claims. And around $ 60.7 billion of that went to low and middle income countries.
Multilateral development banks (MDBs) have managed to raise $ 100 billion in climate finance for mitigation as well as adaptation efforts last year, a new report claims. And around $ 60.7 billion of that went to low and middle income countries.
Total climate finance raised by MDBs is up from $81.8 billion raised in 2021. For low and middle income countries, the climate finance available increased from $50.7 billion in 2021, but the Joint Report on Multilateral Development Banks’ Climate Finance also shows that around $67.82 billion of the total was provided as investment loans and only around $6.84 billion was in grants. And experts also said the number itself remains to be examined, as needs be the contribution of developed countries to it.
“I’m encouraged to see the joint report released by MDBs showing nearly $100 billion was delivered for adaptation and mitigation climate finance in 2022, with half of this going to low-income and middle-income economies. This, along with the joint statement released by MDBs committing to greater action ahead, shows that the calls of the global community are being heard,” COP28 President, Sultan Al Jaber of UAE, which is hosting the UN Climate Conference (COP28) in December, said in a statement on Sunday.
“As we look towards COP28, we must still do more. We must build on this momentum to keep 1.5 degrees C within reach and enhancing climate finance will play a crucial role. We look forward to joint MDB action at COP28 that sets a higher level of ambition commensurate with the needs of tomorrow, to ensure climate finance is available, accessible and affordable,” he added.
With the record 2022 climate finance volumes, MDBs are surpassing for the second year in a row the 2025 climate finance targets they set themselves at the UN Secretary General’s Climate Action Summit in 2019. These included delivering an expected collective total of $50 billion climate finance for low-income and middle-income economies; at least US$65 billion of climate finance globally; an expected doubling in adaptation finance to $18 billion; and private mobilisation of $40 billion, a statement by Asian Development Bank said on Monday.
“It is encouraging to see the growth in MDB climate finance for low- and middle-income economies, particularly the rise in the amount of private sector finance mobilised,” said ADB Climate Envoy Warren Evans in a statement.
“But we need to do more. In Asia and the Pacific, home to many of the most climate-vulnerable countries, we will need to mobilise significant amounts of private sector finance to move from the billions to trillions required to cut greenhouse gas emissions and urgently scale up climate resilience both now and into the future,” he added.
In 2009, at COP15, developed countries promised to mobilise $100 billion in climate financing for developing nations starting 2020. While developed countries channelise their contribution to climate finance through MDBs, it’s not clear how much funding has been delivered by rich countries alone in the break up provided in the current MDB report.
The G20 New Delhi declaration called for talks on higher and adequate climate finance at upcoming COP28. There is a need for $ 5.8-5.9 trillion in the pre-2030 period for developing countries in particular to implement their nationally determined contributions, or NDCs that are emission reduction commitments, as well as a need of $4 trillion per year for clean energy technologies by 2030 to reach net- zero emissions by 2050, according to the G20 consensus statement released on September 9.
“MDBs are going to be a critical channel of climate finance for the developing world. The debate on climate finance is about ‘new and additional’ finance. The claim that 50% of $100 Billion has already been channelled through MDBs to low and middle income economies has to be closely examined to verify if the delivered finance is indeed new and additional. Else, it will be a rehash of the old and discredited Organisation for Economic Co-operation and Development (OECD) claim that the developed world has delivered on its climate finance commitments. The developing world would expect the COP presidency to not be swayed by any such claim without first evaluating it,” said Vaibhav Chaturvedi, fellow, Council on Energy, Environment and Water (CEEW) responding to the MDB report.
“Despite claims by Multilateral Development Banks (MDBs) of allocating $100 billion to developing nations, it’s imperative that we critically examine these figures through the lens of climate justice. The 2009 pledge seemed to emerge out of thin air, especially when the reality is that we need trillions in climate finance to reduce emissions, adapt to impacts, and address loss and damage. However, a prevailing trend shows that the bulk of this finance is structured as loans, placing an undue financial burden on countries already facing poverty, escalating climate challenges, and rising food and energy prices. It’s a stark double injustice to burden these nations with loans when what’s truly needed is expansive public financing,” said Harjeet Singh, head of global political strategy, Climate Action Network International.
