As the Paris Agreement is expected to apply after 2020, the first formal review under the agreement will not take place until 2023. However, as part of a decision accompanying the agreement, the parties decided to start the five-year cycle with a “facilitative dialogue” on collective progress in 2018 and the submission of NDCs by 2020 to 2030. Under U.S. law, U.S. participation in an international agreement may be terminated by a president acting on executive power or by an act of Congress, regardless of how the U.S. has acceded to the agreement. The Paris Agreement stipulates that a Party may not withdraw from the Agreement within the first three years of its entry into force. The Paris Climate Agreement, signed on 12 September. Signed at COP 21 in Paris in December 2015, it intensified the appeal to the financial community, in particular development finance institutions (DFIs), for their contributions to climate action. “The demand right now is that since you failed to deliver the $100 billion in 2020, give us a five-year, $500 billion plan,” Huq said. In July, the V20, a group of finance ministers from 48 climate-vulnerable countries, called for the plan, which includes more grant-based financing, and that at least 50 percent of the funds be spent on adaptation. Huq notes that countries are also allocating their own budgets to climate change.
The government of Bangladesh, for example, claims that its climate-related spending amounts to about $3 billion, or about 7 percent of the government`s total budget, or 0.73 percent of the country`s gross domestic product (GDP). And poor families in rural Bangladesh spend $2 billion a year themselves to prevent climate-related disasters or repair the damage they cause, according to an Oxfam analysis (see go.nature.com/2yuycvn). The long-term financial goal of the Paris Agreement marks the first time that countries have set a common goal in the United Nations climate negotiations that reflects the full extent of financial efforts to combat climate change. In the past, negotiations have focused on public financing of developed and developing countries. This financing is crucial, especially for the poorest and most vulnerable developing countries, but it is only part of the picture. Although only national governments are directly involved in the negotiations, COP 21 provided many opportunities to showcase the contributions of “non-state actors” to global climate efforts. The strong demonstration of the commitment of cities, subnational governments and businesses at the New York Climate Summit in September 2014 led to the establishment of the Lima-Paris Programme of Action at COP 20 and the Non-State Actor Zone for Climate Action (NAZCA)NaZCA platform, where non-state actors can register their commitments. At the time of Paris, the portal listed nearly 11,000 commitments from 2,250 cities, 22,025 companies and hundreds of states/regions, investors and civil society organizations. The unprecedented demonstration of action and support from all levels of society was widely seen as an important factor in Paris` success. Governments and stakeholders are working to strengthen non-governmental contributions to the UNFCCC. The numbers are unlikely to have risen sharply in 2020: a June 2021 report by the MDBs3 suggests that the climate finance they have provided to developing countries has declined over the past year. “That`s not a good sign,” says Joe Thwaites, a climate finance specialist at the World Resources Institute (WRI) in Washington DC.
International climate finance is likely at a standstill in part due to the COVID-19 pandemic. And experts say any attempt to make a fair calculation about who owes what would show that the U.S. is far behind. Many researchers believe that commitments should be based on both economic prosperity (rich countries should give more) and historical responsibility (countries that have burned more fossil fuels should pay to help others adapt). According to an analysis by the Overseas Development Institute, the United States is expected to contribute about 41 percent of climate finance, or $41 billion, each year. Similarly, the World Resources Institute noted that the country, which has so far been responsible for a quarter of global emissions, is expected to be responsible for about 45 percent of contributions to the United Nations-backed Green Climate Fund. The UNFCCC`s Standing Committee on Finance (SCF) is preparing the biennial assessment and overview of climate finance flows for 2020. To this end, the Committee requested the submission of evidence, including a list of required information and data, regarding: The UNFCCC, adopted in 1992, is a treaty between governments that forms the basis of global climate efforts.
The convention, which enjoys near-universal adherence, has been ratified by the United States with the approval of the Council and the Senate. The convention set a long-term goal (to avoid “dangerous human intervention in the climate system”), established principles to guide global efforts, and committed all countries to “mitigate” climate change by reducing or avoiding greenhouse gas emissions. The Paris Agreement sets out how countries will implement their commitments under the UNFCCC after 2020. In agreements adopted in Copenhagen in 2009 and Cancún in 2010, governments set a goal of keeping global temperature rise below 2 degrees Celsius above pre-industrial levels. The Paris Agreement reaffirms the 2-degree target while pushing efforts to limit the increase to 1.5 degrees Celsius. The agreement also sets two other long-term reduction targets: first, a peak in emissions as soon as possible (as this will take longer for developing countries); and then a goal of net neutrality of greenhouse gases (“a balance between anthropogenic emissions from sources and removals by sinks”) in the second half of the century. The solution, proposed more than a decade ago at a United Nations meeting in Copenhagen and reaffirmed in the 2016 Paris Agreement, has been dubbed the “big market”: all countries – from the largest economic giant to the smallest island nation – would strive to reduce their greenhouse gas emissions. But rich countries would also channel hundreds of billions of dollars a year in grants, loans and other forms of climate finance to poorer countries to help them switch to clean energy and adapt to the worst monsoons, heat waves and droughts caused by climate change. The Paris Agreement provides a sustainable framework that guides global efforts for decades to come. The goal is to create a continuous cycle that keeps pressure on countries to increase their ambitions over time. In order to promote growing ambitions, the agreement provides for two interconnected processes, each taking place over a five-year cycle.
The first process is a “global stocktaking” to assess collective progress towards the long-term goals of the agreement. The parties will then submit new NDCs “shaped by the results of the global inventory”. At its 21st meeting in October 2019, the SCF responded to the needs of developing country parties with regard to the implementation of the Paris Agreement and Agreement, on which the Parties had mandated the SCF to report every four years from 2020 onwards. Prior to the meeting, the UNFCCC revised its Climate Finance Data Portal, which collects information, graphs and figures for a better understanding of climate finance flows and provides information on activities funded in developing countries to implement climate action, in particular on channelled financial flows, mobilized and used by the Global Environment Facility (GEF) and the Green Climate Fund (GCF). It also contains information on Adaptation Fund project data with respect to institutions, projects and programmes approved by the Executive Board of the Adaptation Fund. Increasingly, the concept of climate finance is becoming superfluous, Huq says. “Every dollar spent is climate money spent,” he says. “Either you spend it wisely or you spend it recklessly.” At the Finance in Common Summit meeting, Patrick Dlamini, IdFC Co-Chair, reaffirmed IDFC`s previous commitments and presented new measures. These include tools to operationalize adaptation to the Paris Agreement, addressing social issues related to COVID-19 and the link between climate and biodiversity.
The club also announced several milestones, such as the creation of the IDFC Climate Facility, launched at COP25, and the strategic partnership with the Green Climate Fund (GCF). In addition, the EIB Group said it expected its financing operations to unlock EUR 1 000 in sustainable climate and environmental investments over the decade to 2030. The Bank will gradually increase its share of climate and environmental sustainability financing to 50% of its financing by 2025. Negotiators never agreed on how to accurately measure countries` commitments. The Organisation for Economic Co-operation and Development (OECD), an intergovernmental body composed mainly of rich countries, bases its assessment on the reports of the rich countries themselves. They contributed $80 billion to developing countries` climate finance in 2019, as announced in September2, up from $78 billion in 2018. Most of this money came from public grants or loans, either transferred directly from one country to another or from funds from multilateral development banks (MDBs). A smaller amount is private financing that would have mobilised public funds, such as loan guarantees and loans granted alongside public funds (see “Failed target”). COP26 will also open formal negotiations on a post-2025 target. A specific climate finance target is unlikely to be set this year, although South Africa`s Environment Minister Barbara Creecy proposed a figure of $750 billion a year by 2030 in July.
Many countries also want additional funding for “loss and damage” to help people who suffer irreversible climate-related losses that cannot be adapted. Some governments are increasing the demand for additional adaptation funding. . . .