Studies have shown that humans are causing climate change at a rate 170 times faster than natural forces themselves. The world’s most vulnerable countries have suffered greatly from the consequences of climate change, which has caused widespread loss and damage to nature and people, and put life at irreversible risk. The Sixth Climate Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) revealed that the last decade has been the hottest in the past 125,000 years, and the global temperature is expected to exceed 1.5 degrees Celcius in less than two decades due to our irresponsible activities.
Oxfam takes a different perspective to combat the climate crisis through systemic change that seeks to create a carbon-neutral, fairer, more equal, more feminist, and more anti-racist world. Climate change exacerbates social injustice. Today, the world's most vulnerable people are paying the price for a climate crisis that they caused the least. Analysis by Oxfam shows that the G20 countries, which control 80% of the global economy, are responsible for 76% of global emissions.
Climate justice begins with recognizing that countries, communities, and people are affected by climate change in different ways and at different levels. Those who are not equipped with adaptation mechanisms to respond to harmful changes are the first to suffer its current and projected impacts. Climate justice thus shifts the focus from an economic perspective to an ethical and political one, seeking to protect the human rights of those affected by climate change while highlighting the importance of equality, environmental health, and sustainable development. This means addressing not only the historical and current responsibilities of states and large, high-emitting corporations for their role in exacerbating carbon emissions, but also the role of the wealthiest individuals in contributing to the climate crisis through their emissions, investments, and capture of politics and policy-making. It also means recognizing that economic and social justice is a prerequisite for saving the world from the climate crisis, poverty, and inequality. Any success of the talks must be assessed from this perspective. We cannot look at climate change solutions through a single lens that looks at emissions reductions in isolation from other solutions; therefore, when analyzing the outcomes and monitoring the discussions, we must put those affected at the center of the decisions.
Lessons learned from climate finance mechanisms
Adaptation to climate change can improve people's well-being and reduce risks, but it is underfunded and, if not done properly, will exacerbate existing social issues and increase inequality. To date, the fundamental ethical dilemma of climate change financing for mitigation and adaptation has not been resolved, as global climate finance levels are woefully inadequate to keep warming below 1.5 degrees Celsius or to protect people from the devastating impacts of climate breakdown. The Copenhagen commitment to mobilize $100 billion a year from developed countries, which are historically responsible for the climate change we are experiencing today, was extended to 2020 and again to 2025 under the Paris Agreement. According to Oxfam's "Shadow Climate Finance" report, major donors claim to have mobilized $83.3 billion in 2020, while their actual spending was - at most - $24.5 billion, meaning that the $83.3 billion claim is an overestimate, as it includes projects that have overstated their targets or loans cited at face value only.
When considering climate finance for fragile and conflict-affected countries, two billion people, a quarter of humanity, live in countries that cannot borrow more because of their current debt levels. Forcing these countries to borrow could lead to further cuts in public spending, with disastrous consequences for people already living in poverty. More than half of the climate finance reported by rich countries could put fragile states further into debt, leaving already conflict-torn societies vulnerable to the consequences of a deadly climate collapse. In 2022, 78% (29 countries) of countries in the Fragile and Conflict-Affected States (FCAS) FCAS group are categorized as being at medium to high risk of debt distress.
COP28
In a victory for the rights of countries most vulnerable to climate change, COP27 in Sharm el-Sheikh agreed to establish a Loss and Damage Fund (LDF). Ahead of COP28, it was agreed during the meetings of the Fund's Transition Committee that the World Bank would host the LDF in an interim phase. As civil society, we must monitor and hold the World Bank accountable to the terms of the LDF agreement during this transitional period.
The twenty-eighth session of the Conference of the Parties (COP28) opened with the approval of the LDF and the mobilization of encouraging funding, bringing the total pledges to about US$655.9 million. Although the design of the Fund differs from the original visions of developing countries, it represents a good start for climate change cooperation and work to make funding in the form of grants rather than loans. Attention now turns to securing more pledges to go beyond this initial funding, which is currently insufficient for the most vulnerable countries.
The second real test after the Loss and Damage Fund was the signal to phase out fossil fuels. COP28 for the first time called for action to transition away from all fossil fuels, the main culprits of the climate change crisis. After 28 COPs, the foundation for this decision was finally laid and called fossil fuels what they are, without borrowing other words or meanings. But the world, the most vulnerable countries, and the most fragile communities do not have another 30 years to interpret what the transition means and how to implement it. While many are celebrating this decision today, it will need funding and a lot of political action for it to fully materialize.
For a just and genuine energy transition and a commitment to only 1.5 degrees Celsius above pre-industrial temperatures, we need to close the legal and practical gaps in the texts on mitigation and transition. We will need more precision and short-term milestones to ensure accountability and implementation, especially on adaptation where the global target is just beginning to be operationalized. The consensus reached provides a multilateral platform to accelerate action between now and 2025 when the NDCs come up for review. Success will depend heavily on increased funding - a key focus of COP29 - to build the confidence to set and achieve higher ambitions. This year’s focus must be on defining a common international definition of climate finance, who will finance the Climate Fund, and how transparency and delivery of funding will be monitored. It should be emphasized that funding should be public and grant-based, rather than loan-based, taking into account the needs of developing countries most affected by climate change. The 2025 deadline for the New Collective Quantitative Goal (NCQG) negotiations is approaching. Parties did not agree on any substantive elements of the new target but only took primarily procedural decisions. It is worth noting, however, that the parties did set out a vision for the NCQG process next year to move towards a working method to enable the development of a draft negotiating text.
Conclusion
Based on the above, no funding should be a debt trap for the most vulnerable countries that are not the cause of historic climate change. The poorest countries and communities are facing more debt, and getting less aid, which increases inequality, hunger, and deprivation. It is time to move away from old funding models that cater to donor preferences and move steadily towards solutions based on the needs of affected countries and communities with a new funding mechanism that empowers local voices, ensures long-term, sustainable change, and contributes to change for the better.
The views represented in this paper are those of the author(s) and do not necessarily reflect the views of the Arab Reform Initiative, its staff, or its board.