There is urgent need of funds to fight climate crisis

Megan Rowling, Reuters

The small island nation of Jamaica, like many others in the Caribbean, is battered regularly by tropical storms that are getting fiercer as the ocean warms, threatening to wreck homes, energy grids, hospitals, roads and ports.

Weather-driven losses to vulnerable islands in the region — now also beset by a dive in tourism due to the COVID-19 pandemic — have caused debt levels and borrowing costs to soar.

That is leaving them struggling to invest in the climate protection their citizens need, according to the head of the UN-backed Green climate Fund (GCF).

Yannick Glemarec, who visited the Caribbean 10 days ago, said countries such as tiny Dominica are trapped in a cycle of trying to reduce their debt only to have it “explode” again after a hurricane wipes out a large chunk of gross domestic product and more loans are needed to repair the damage.

But that is not an inevitable pattern, he added.

“If you invest in adaptation, you can have resilient infrastructure,” he told the Thomson Reuters Foundation in an interview on the sidelines of the UN COP26 climate talks.

“There is something you can do about this — but for that you need money, you need access to capital.”

Cripplingly, for many island nations, that cash is not available, either because they find it hard to negotiate the complexities of accessing international public climate finance or because private investors see them as too high a risk.

The multi-billion-dollar GCF wants to shift that status quo with new test projects mapping out how two coastal countries — Jamaica and Ghana — can strengthen their natural defences against rising seas and storms with measures such as restoring wetlands and adding more trees.

The aim is to help them avoid building yet more sea walls and other high-carbon concrete barriers while demonstrating to potential private-sector backers that lending for “green infrastructure” does not carry unacceptable uncertainties.

By helping investors assess projects more effectively — and, where needed, using donor funding to cover part of any losses — “you definitely shift money”, Glemarec said.

Developing nations and those who work with them say such projects, aimed at pulling in finance to limit potential destruction from rising climate impacts, are urgently needed, alongside separate funding to deal with losses that do occur.

A study released by charity Christian Aid on Monday highlighted the devastating economic impact climate change could inflict on the most vulnerable countries without sharp cuts to climate-heating emissions and measures to adapt to warming already baked in.

Economies in such countries would still grow in the second half of this century, the study predicted.

But if global temperatures rose 2.9 degrees Celsius — a hike current climate policies could cause — the poorest nations and small island states could end up with average GDP nearly 20% lower than without climate change by 2050, and 64% lower by 2100.

Even if global warming were limited to 1.5C, as set out in the 2015 Paris Agreement, those countries could still face an average GDP reduction of about 13% by 2050 and 33% by 2100, the study predicted.

Africa would take the biggest hit, researchers said.

Marina Andrijevic, who coordinated the study, said it only examined the impact of temperature increases, meaning additional damage from wild weather could make the economic outlook for these countries even worse.

The findings “imply that the ability of countries in the Global South to sustainably develop is seriously jeopardised and that policy choices we make right now are crucial for preventing further damage,” said Andrijevic of Berlin’s Humboldt University.

Nushrat Chowdhury, Christian Aid’s climate justice advisor from Bangladesh, said she had seen firsthand how climate “loss and damage” has already affected her people, with houses, land, schools, hospitals and roads hit by floods and cyclones.

“People are losing everything. Sea levels are rising, and people are desperate to adapt to the changing situation,” she said in a statement. “If ever there was a demonstration of the need for a concrete loss and damage mechanism, this is it.”

A mechanism to handle such losses was established at 2013 UN climate talks in Warsaw but negotiators so far have done little more than research options for real-world action, despite growing calls for those to be put into practice.

Demands are especially strong for new types of finance to help countries build back better after destructive disasters and relocate at-risk communities away from crumbling, flood-prone coastlines.

Rich countries, however, have so far mostly refused to move beyond support to expand insurance coverage for extreme weather.

Last week, the Scottish government set a precedent by announcing it would provide £1 million ($1.35 million) to help poor communities address loss and damage by repairing and rebuilding after climate-related disasters, such as flooding and wildfires.

At the Glasgow talks, groups of least-developed countries and small island states are pressing hard for an official green-light to establish some kind of global loss and damage funding stream, ideally at next year’s climate summit.

On Sunday, a list of possible points that could be included in a final decision agreed at COP26 was released, in time for discussion by ministers in the talks’ second and last week.

But on the theme of loss and damage, it mentioned only the “need for increased and additional financial support”.

That is unlikely to satisfy negotiators from vulnerable countries, though it represents a softening of opposition by wealthy governments.

Yamide Dagnet, director of climate negotiations for the World Resources Institute, a US-based think-thank, said the proposal was weak and finance issues broadly were now “the elephant in the room”.

Rich nations have yet to deliver on a pledge to raise $100 billion a year from 2020 to boost clean energy and help vulnerable communities adjust to climate shifts, a source of deep frustration at the talks.

In the Paris Agreement, countries said they would aim for a balance in funding between cutting emissions and measures to adapt to a warmer world — but only about a quarter of finance so far has gone to adaptation efforts.

Bhutan’s Sonam P. Wangdi, who chairs the group of least developed countries at COP26, told Britain’s Observer newspaper on Sunday that adaptation “is extremely important”.

“We need to adapt now, and for that we need money. But that money is not coming, currently. How it’s going to come, I don’t know,” he added.

For GCF head Glemarec, the urgency of helping countries squeezed by climate change impacts and the pandemic is clear.

“When you have people in such dire straits, don’t make them wait,” he said.