In the fight against climate change, one thing is clear: money matters significantly hence an emphasis on climate finance. The financing required to mitigate and adapt to the devastating effects of global warming stands as a cornerstone of international efforts like the Paris Agreement. Yet, as COP29 heads to finality, the divide between the Global North and South grows starker, exposing deep inequities in who funds, who benefits, and who suffers.
At its core, climate finance is about responsibility which is equated to historical injustices that denote developed parties owing the developing parties support. It’s important to understand concepts such as public finance, raised through taxes or loans by governments, is meant to support initiatives that serve the public good. Private finance, on the other hand, comes from businesses and banks driven by profit motives.
While private funding can supplement public efforts, it often comes with strings attached, such as high-interest loans or equity deals that privatize essential services like water or energy. For developing nations already burdened by debt, these conditions can deepen their struggles rather than solve them.
The distinction between provision and mobilization goals is critical in enabling an understanding for both parties. Provision goals refer to direct financial contributions, typically grants that don’t need to be repaid. These grants are crucial for addressing issues like loss and damage, where communities are left grappling with the irreversible impacts of climate disasters.
Mobilization goals, in contrast, involve using public funds to attract private investment, often through low-interest loans. While both approaches are necessary, the over-reliance on loans raises concerns about fairness, particularly for nations already bearing the brunt of climate change caused by historic emissions from the industrialized world.
Critics point out that the Global North’s commitments fall far short of what is needed. Developing nations have called for $1.3 trillion annually sum they argue is modest given the scale of the climate crisis. However, wealthy countries have countered with offers to “mobilize” a mere fraction of that amount, often tied to conditions that benefit lenders more than recipients. This, say many in the Global South, is not just inadequate—it’s insulting.
The Paris Agreement clearly states that developed nations must take the lead in providing public finance for climate action. Yet, there’s a growing push from some countries to treat climate action as an investment opportunity hence solutions like ‘carbon markets’ getting fronted a lot. Notably, such proposals threaten to shift the focus from equity and accountability to profit-making, leaving vulnerable nations to shoulder the burden.
Dr. Fadhel Kaboub, a senior advisor at Power Shift Africa, has been vocal in calling out these inequities. He reminds the world of the U.S. Marshall Plan, which saw $1.3 trillion in today’s value gifted to rebuild Europe after World War II. “If such generosity was possible then, why can’t the same be done now for a crisis of even greater magnitude?” Kaboub urges the Global South to stand firm, advocating for grants, debt cancellation, and technology transfer to ensure sustainable and equitable solutions.
The Global South has a powerful card to play: unity. By leveraging their collective resources and markets, these nations can demand a new international economic order, one rooted in justice, not exploitation. “No deal is better than a bad deal,” Kaboub asserts, highlighting the need for bold, united action if historic polluters fail to meet their obligations.
Climate finance is not just about dollars and cents; it’s about survival and with the time ticking, it’s important for amplified collective action. Considering that the planet is most vulnerable, the promise of grants, debt relief, and access to life-saving technologies could mean the difference between thriving and perishing.
Negotiators have given the Global North a heightened call to recognize this reality and rise to the occasion. Anything less is not only a failure of leadership but also a betrayal of humanity’s shared future as evidenced by the unprecedented climate change eventualities witnessed.
