The pledge to mobilize $100bn a year in climate finance remains a central pillar of negotiations but developed nations are still falling short on both quantity and quality.
CGD Policy Blogs
A central commitment of action on climate is the promise of “developed countries” to jointly mobilize $100 billion of climate finance per year by 2020 (and through to 2025). How does this promise—which developed countries have so far failed to reach—compare to the actual cost of the damage caused by their emissions? Today we publish a paper that answers that question by estimating the liability each country bears for the costs of damage caused by carbon emissions to date. We limit this liability with two assumptions. First, we only count damage from when international awareness of climate issues grew. Second, we reduce the cost applied to older emissions. These limitations are arguably conservative—and we consider other scenarios in the paper.
Recent extreme weather events in the US, Canada, Europe and beyond have shown the high-income countries how vulnerable it is to climate change—a feeling that lower- and middle-income countries have known for years. Germany’s actions over the past decade on climate finance have established it as a leader with climate negotiations and commitments on climate finance at a critical moment.
Today, we publish the 2021 Commitment to Development Index (CDI), which tracks powerful countries’ policy efforts on development across eight important areas, from development finance to migration. One of the CDI’s focal areas is the environment, which matters for everyone but is especially critical to people in lower-income countries. In a key year for climate negotiations, the CDI can tell us which countries are doing well on policies to protect the environment and which have room for improvement.
As we pas the 2020 deadline for $100 billion a year of climate finance we look at how much climate finance could be “new and additional” as the original commitment envisaged, and how much each country has contributed.
Our analysis suggests improvements need to be made to ensure mitigation funding has the intended impact. We estimate that a focus on effectiveness could plausibly reduce emissions by an amount equivalent to a year of the UK’s emissions. Here, we draw out three reforms that should accompany any new finance commitments.
Last week President Biden announced sweeping measures to reengage the US government in the fight against climate change. With US Special Envoy for Climate John Kerry suggesting the need for “humility and ambition,” we suggest five ways for the new US administration to be more ambitious on the international stage.