The twenty-first Century is the century of non-traditional security predominantly taking over conventional security concerns in the global political framework. One of the most pressing issues of the decade, climate finance, comes with several implications for developing nations. Initially stemming from the higher global carbon emissions significantly by the developed countries, the climate challenge, though beyond borders, has been cruel to the poor and underdeveloped nations due to the North-South gap.
Developed nations bear significant responsibility for historical emissions and must boost climate finance.
Global North, the developed world is referred to as because of industrialization which eventually contributes to global warming with higher carbon emissions. While the South, yet struggling with complex economic situations, financial disasters, corruption etc., becomes vulnerable to the crisis for not having enough financial resources to cope with this existential threat.
Recently, the 29th edition of the Conference of Parties (COP-29) was held with special emphasis on missing climate finance and put up the issue as a concern for basic human rights. Moreover, developing nations also need to work on securing the available funds.
As the environmental challenges become more intense with every passing year, the consequences are for the low-income states at the cost of their security and stability. The science is very clear that carbon emission being the root cause of this global risk needs to be controlled to enhance the mitigation process which categorically demands an immense reduction in the production and energy transitions.
Global North, not solely, but as a major contributor is responsible for higher carbon emissions. According to a recent study, the United States is the highest carbon emitter country followed by China, India and then Russia respectively. The top three states contribute around 46% of the global carbon emission. India stands third globally, second in Asia and first in South Asia among the high carbon emitter states. With these facts, it is quite evident that the higher emitters suffer less for having enough economic strength to cover the ultimate disasters caused by climate change.
The recent Conference of Parties (COP) 29 was held on November 11 – 22, 2024 in Baku, Azerbaijan. The wealthier nations, at this event, were demanded a rise in what they owe to the Global South for causing the damage with their hazardous historical emissions. Initially, the amount of USD 100 billion reserved for climate funds back in 2009, is about to end next year. This has now been raised to USD 300 billion for annual climate financing as pledged by the wealthier nations.
Public investments in renewable energy and rapid adaptation are crucial for sustainable growth.
Though the current pledged figure is a significant increase from the last one but far away from the USD 1.3 trillion call from the New Collective Quantified Goal by 2035. Private sector investment seems almost impossible as the investor might not be interested in investing in the global south with no returns. Furthermore, the absence of world leaders at COP 29 and Trump’s executive orders to pull out from the Paris Agreement, an eventual elimination of the climate funds, underscores the lack of serious commitment of the leaders and leading states’ non-serious attitude towards this grievous issue.
Even though the rising gap in global climate finance is a big challenge other particular factors are overshadowed by this debate which can be influential to not reduce but to cope with this rising gap. The factors include public funds, private investments, and a mechanism to deliver through the available funds. First of all, the public investment for efficient mitigation and adaptation i.e., infrastructure development, research and development, and approaching the marginalized sections are necessary eventually to mobilize a shift in the private sector to attract climate finance.
According to the economists, by the year 2030, the developing countries shall require public international finance of an estimated 1 trillion dollars per annum increasing to USD 1.3 trillion in 2035. Secondly, the private sector with an amount of USD 210 trillion held assets, is another major contributing factor to climate finance as it comes up with climate-resilient innovations for the net zero emission goal. Proliferating the energy shift from fossil fuels to renewable energy resources, introducing new technologies, clean transport, and green infrastructure are some of the few areas where huge private investment and initiative are required to achieve global biodiversity goals.
Last but not least, a developed mechanism to utilize the available funds to address the existing challenges effectively. The local financial institutions in most of the middle-income countries in the south are more focused on mitigating strategies, undermining the adaptation plans and projects for capacity building. Almost 90% of the international climate finance goes to the mitigation to limit global warming, while there is a certain economic rationale to promote climate investment more in adaptation rather than mitigation for it builds the capacity and helps maintain climate resilient infrastructure.
Technological innovations and robust ESG strategies can transform energy sectors and reduce fossil fuel dependency.
Though multiple international institutions have been actively engaging with various state and non-state actors, the response cannot be scaled better as per the perceived intensity of the threat. There are still gaps to fill amid the increasing demand for capital from the states with lower emissions and higher vulnerability. An increase in public funds and private investment is vital for this pressing issue to be resolved. Finally, putting all the aforementioned efforts in a timely is critical for if not met quickly, the risk may rise higher demanding a more intense response in the future.
Disclaimer: The opinions expressed in this article are solely those of the author. They do not represent the views, beliefs, or policies of the Stratheia.
