Poor countries need $1 trillion a year in climate finance before 2030, much earlier than rich countries are likely to agree to at UN climate talks in Baku, to avoid escalating impacts from global warming, leading economists have warned.
Waiting until 2035 to receive the funding, which is to help them cut greenhouse gas emissions and cope with extreme weather, while scaling up renewable energy, would place damaging burdens on vulnerable countries, the Independent High-Level Expert Group on Climate Finance has found.
Its latest report coincided with yet another scientific study indicating how off course the world is in addressing the climate crisis. Current policies would lead to a disastrous 2.7 degrees of warming this century, according an update by the Climate Action Tracker project.
This would cause a level of disruption that many scientists say will put human civilisation at risk.
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The expected level of global heating by the end of the century has not changed since 2021, with “minimal progress” made this year, it concludes.
The main obstacle among negotiators from the nearly 200 countries gathered in Azerbaijan is over how much finance wealthier countries should provide, and how much could come from other sources. Key disagreements remain on the total finance number and how much is from public money, loans and private finance.
It had been “very rough” over the previous 24 hours, said Minister for Climate Eamon Ryan, who is leading negotiations on adaptation measures in Baku. This followed controversy over his French colleagues not coming to Baku and the withdrawal of the Argentinian delegation. But there were “strands for hope” in setting out a course to achieve $1.3 trillion for low- and middle-income countries. “The question is how is that made up,” Mr Ryan said.
The all-important text for what is known as the “new collective quantified goal” has expanded from nine to 34 pages but this was a technical summary needing to be knocked into shape over coming days, he added, before minsters gather next week in an attempt to forge a political agreement.
The EU believed it was putting climate justice at the centre of the goal but there was a need for private finance and for funds with fair interest rates, Mr Ryan said. “That will be critical. Agreement is not impossible despite a lot of turbulence in recent days.”
Beyond a headline figure in public funds, a variety of finance was required, including money from multilateral development banks, insurance companies, carbon markets and new sources of funding.
With global subsidies for fossil fuels standing at about $7 trillion, “redirecting that into the clean [energy] is a key part of what we have to do”, he said. Focusing on the demand side by “switching to clean energy is the best way to cut off oil and gas supply”.
Speaking after a meeting of EU ministers, Mr Ryan said there must be contributions from all big carbon polluters including emerging economies such as China. “But how exactly you deliver that is where the negotiations will go.”
It may involve a lot more transparency on what is already happening on financial flows, such as China’s “belt and road initiative” in developing countries, and allowing countries to opt into that “rather than rewriting who is a developing country, who is a developed country”.
Targeting cryptocurrency in a set of new possible “solidarity levies” on high-carbon goods and services would generate $5 billion a year for the climate crisis, a new report from the Global Solidarity Levies taskforce has shown.
The report considers where the levies might be applied. Crypto is notoriously energy-intensive – by one estimate, mining bitcoin accounted for almost 1 per cent of global energy demand last year. Charging just $0.045 per kilowatt-hour for the energy would produce $5 billion, according to the second report of the taskforce.
Led by the French ex-diplomat and current chief executive of the European Climate Foundation, Laurence Tubiana, the initiative was started by France, Barbados and Kenya to find innovative forms of finance to help poor countries cope with the climate crisis.
The report finds a plastics production levy, charged on producing plastics from polymers rather than recycled material, would yield $25 billion-$35 billion a year if set at $60 to $90 a tonne. A 2 per cent wealth tax would yield up to $250 billion a year. Taxing frequent flyers and business-class airline tickets would also be lucrative, generating up to $164 billion a year. – Additional reporting: Guardian
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