HASSOUNA AL-TAYEB (ABU DHABI)
Multilateral and bilateral finance flows to developing countries decreased by 15%, to about $21 billion in 2021, while developing countries are looking to secure $387 billion per year to combat climate change impacts. The required financing has increased to $47 billion since the last annual assessment conducted by the United Nations Environment Programme (UNEP), published ahead of the COP28 summit.
The UNEP report concluded that the financial needs of developing countries are now 10-18 times as big as international public finance flows, according to the Financial Times.
The UNEP report found out that because of the growing adaptation finance needs and faltering flows, the current adaptation finance gap is now estimated to be about 360 billion per year, 50% greater than expected. The report found that the finance required for adaptation in developing countries is higher and estimated to be in a plausible central range of $215 billion to $387 billion per year this decade. However, multilateral and bilateral finance flows to developing countries decreased by 15% to about $21 billion in 2021.
Inger Andersen, Executive Director of UNEP, said that climate change yet again became more disruptive and deadly; temperature records toppled, while storms, floods, heatwaves and wildfires caused devastation.
“These intensifying impacts tell us that the world must urgently cut greenhouse gas emissions and increase adaptation efforts to protect vulnerable populations. Neither is happening,” added Anderson. She urged policymakers to take heed of the Adaptation Gap Report, step up finance and make COP28 the moment that the world committed fully to insulating low-income countries and disadvantaged groups from damaging climate impacts.
At COP28, rich countries must fulfil the pledges they made at COP26 in Glasgow in 2021, by increasing their financial support to about $40 billion per year to developing countries, with the aim of combating climate change by 2025.
Rich countries are engaged in deliberations on how the loss and damage fund could be activated to assist developing countries confront the worst conditions of climate change.
The UNEP report showed that a major part of the adaptation finance flows went to low income and lower middle-income countries, while upper middle-income countries received more mitigation finance flows, where small and poor low-lying pacific islands struggle to obtain financial support to achieve required adaptation plans.
Adaptation investments help saving money in the long term, as these investments cover a wide range of activities, from supporting developing countries to continue producing food commodities during droughts, to restoring coastlines to prevent flooding.
The UNEP report pointed to a study indicating that the 55 most climate-vulnerable economies alone have experienced losses and damages of more than $500 billion in the last two decades. These costs will rise steeply in the coming decades, particularly in the absence of forceful mitigation and adaptation.
Experts confirm that climate-related disasters are worsening as temperatures rise. The planet’s average temperature has risen about 1.1 degrees Celsius since the start of the Industrial Revolution. Since greenhouse gas emissions continue to rise, the UN highlighted various ways to increase financing rates to adapt to changing climate conditions, including reformulating the global financial structure, with the aim of reforming the World Bank and other multilateral development banks.
“Even if the world stopped emitting greenhouse gases right now, it would take several decades for climate impacts to disappear,’’ said Anderson.