Climate funding is in short supply. So some want to rework the financial system

Climate financing is severely lacking, putting developing countries at a disadvantage when dealing with climate change. In response to this, there are calls to restructure the financial system.

Backdrop: Developing countries, which have contributed minimally to climate change, are most affected by its impacts and need funding to put up infrastructure and measures to adapt to the climate reality.
* A promise by wealthy nations to provide $100 billion annually to less wealthy nations, which has been unmet, is up for discussion in the upcoming COP28 hosted by the UAE.

Funding Reality: The funding shortfall has severe impacts on these lesser developed nations, with total climate funding being a fraction of what is needed.
* The latest assessment by the OECD found that developing countries received only $89.6 billion in 2021, still short of the $100 billion goal.
* Developing countries may need up to $2.4 trillion every year for climate investments between 2026 and 2030 according to the OECD.

Addressing the Financial System: Attention is being directed at global financial institutions such as the World Bank and International Monetary Fund.
* Proposals are underway to increase funding from these organizations and mobilize cheaper money to countries in need.
* The World Bank, partnering with various development banks, could increase lending capacity by up to $400 billion in the next decade, partly addressing the $1.8 trillion annual investment needed by 2030.

Debt Relief: Easing countries’ foreign debt could be a significant way of freeing up necessary climate investment funds.
* Around 50 countries are facing severe debt issues, potentially forestalling investments in areas like education, health care and climate action to repay overseas lenders.
* The World Bank recently announced a policy allowing certain countries to pause debt repayments in the event of a crisis or catastrophe.
* African leaders, including Kenyan President William Ruto, have called for a global deal for debt relief.
View original article on NPR
This summary was created by an AI system. The use of this summary is subject to our Terms of Service.

Contact us about this post






Leave a Reply

Your email address will not be published. Required fields are marked *