South Africa will push for long term, reliable and cheap climate finance when it goes to Glasgow later this year for the UN climate conference (COP26).
The summit will take place against the backdrop of an assessment set to be released next week by a scientific panel, which warned in its previous report that the world was not on track to avoid a climate catastrophe. That report is believed to have changed the course of climate action in the past few years and experts say the latest one will be a game changer for the Scotland conference.
South Africa’s Environment, Forestry and Fisheries Minister Barbara Creecy told the UN Framework Convention on Climate Change in London this week that emerging markets required an estimated $3-trillion to $4-trillion annually in low-carbon investments over the next 15 years to meet their climate mitigation commitments.
Creecy has previously lambasted the structure of global climate finance, because it adds to developing countries’ debt burdens. This is because climate finance tends to be a mixed bag of grants, and funding from development banks and private financiers.
“For COP26 in Glasgow to be relevant, responsive and successful, we need ambition and progression on mitigation, adaptation and means of implementation; that is, finance, technology and capacity-building,” Creecy told world environment ministers.
A report by the New Climate Institute says the triple Covid-19, economic and climate crisis poses a growing challenge to debt sustainability and financing for climate action for developing countries.
“There are growing calls to look for solutions for the three crises together, notably through debt-for-climate swaps. Though not a general panacea, such proposals may represent an attractive option for both debtors and creditors,” it says.
Debt-for-nature swaps occur when a creditor nation replaces existing debt with new finance that should be used for climate change efforts, and it is supposed to come with incentives like lower interest and good terms.
Creecy called on developed countries to ensure access to long-term, predictable, and affordable finance for their developing counterparts.
In 2009 at COP15 in Copenhagen, developed countries committed to mobilising $100-billion a year by 2020 to 2025 to address the needs of developing countries.
In 2018, the Organisation for Economic Co-operation and Development estimated that the commitment reached $79-billion but the World Wildlife Fund said this was in the form of loans, “which can risk further indebting developing countries, especially in the context of the economic crises resulting from the Covid-19 pandemic”.
Creecy said it was imperative to assess whether the goal of mobilising the target money had been achieved. She is expected to put forward a proposal to delegates at COP26 that developed countries commit to a new collective goal of mobilising $750-billion dollars a year by 2030.
This week’s meeting of ministers from 50 countries marked the first face-to-face ministerial meeting of its kind in more than 18 months since the Covid-19 pandemic put a halt on face-to-face international climate deliberations. Environment ministers earmarked the upcoming G20 leaders summit from 30 to 31 October as pivotal for climate action.
“We have moved closer together. But still, on these vital issues we are not yet close enough. There is much more work to be done ahead of COP26 and in Glasgow itself.
And we have agreed ways to keep the conversations going and drive action forward in the 97 days that remain [until] COP26,” Alok Sharma, incoming COP president for the UK, said in a briefing.
Tunicia Phillips is a climate and economic justice reporting fellow, funded by the Open Society Foundation for South Africa.