The importance of climate change adaptation measures cannot be overstated. A complex web of international organizations, financial mechanisms, and agreements underpin efforts to combat climate change. These include the United Nations (UN), Adaptation Gap Report, UN Environment Programme (UNEP), Nationally Determined Contributions (NDCs), World Bank (WB), and International Monetary Fund (IMF).
The Startling Findings of the Adaptation Gap Report 2023
The recently released Adaptation Gap Report, 2023, paints a grim picture. It reveals that developing countries need at least USD 215 billion annually throughout this decade to implement significant adaptation work. However, only USD 21 billion was allocated for such projects in 2021, representing a 15% decrease compared to previous years. The focus of the 2023 report is adaptation finance – the funds available for carrying out these much-needed projects.
The Growing Gap in Adaptation Finance
An alarming revelation from the report is the widening adaptation finance gap. This term refers to the difference between estimated adaptation financing needs and the actual finance flows. It is now believed that the current adaptation finance gap lies between USD 194-366 billion per year. The report also assesses just 2% of the adaptation finance aligned with gender equality objectives as being gender-responsive, with an additional 24% deemed gender-specific or integrative.
Innovative Ways to Boost Climate Financing
The report suggests seven methods to increase financing. These include exploring domestic expenditure and private finance as crucial sources, especially where domestic budgets account for a significant portion of adaptation funding. Large corporations’ internal investments and financial institutions’ finance provision for adaptation activities also play a huge role.
Furthermore, the report urges reform of the global financial architecture. This would ensure better access to finance for climate-related purposes from multilateral agencies such as WB or IMF, in the face of grossly inadequate current international financial flows for climate change.
Challenges For Developing Countries in Climate Financing
Developing countries, due to their limited resilience, must adapt to save lives, livelihoods, and ecosystems. However, while these countries undertake several adaptation measures tailored to their specific needs, they often lack the necessary financing. Despite international climate agreements obligating developed countries to provide financial aid and technology, there has been a shortfall in the funds delivered.
Efforts Made by Developed Countries in Climate Financing
While developed countries had pledged in 2009 to mobilize at least USD 100 billion annually in climate finance from 2020, this goal has not yet been achieved. However, some progress has been made. For instance, at the Glasgow climate conference in 2021, these countries committed to doubling adaptation funding. There is also an agreement to set a new climate financing objective, exceeding USD 100 billion annually, by 2025.
Understanding Climate Financing
Climate financing refers to local, national, or transnational funding—sourced from public, private, and alternative venues—that strives to address climate change through mitigation and adaptation actions. The principle of Common but Differentiated Responsibility and Respective Capabilities (CBDR) underpins financial assistance from financially stronger Parties (Developed Countries) to those less endowed and more vulnerable (Developing Countries).
New financial pledges were made at the 26th Conference of Parties (COP 26) to assist developing countries in adapting to climate change effects. Critical to tackling climate change is climate finance, which aims to limit the Earth’s average temperature rise to below 2 degrees Celsius over pre-industrial levels, as outlined in the Intergovernmental Panel on Climate Change (IPCC), 2018 report.
United Nations Framework Convention on Climate Change: A Recap
The Agreement at the UNFCCC Meeting in Paris in 2015 played a significant role in global climate change response. The agreement aimed to limit greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2ºC or even 1.5ºC above pre-industrial levels. Simultaneously, the “Momentum for Change: Climate Neutral Now” initiative, launched by the UNFCCC Secretariat, encourages nations and organizations to become climate neutral by measuring, reducing, and offsetting unavoidable emissions.
