Delegates by world leaders gathered in Glasgow, Scotland, at the 26th United Nations Conference on Climate Change (COP26), worked this Wednesday (3) to try to reach agreements ranging from transparency of emissions reporting to forest protection .
Each day of the conference has a defined theme to guide conversations and negotiations. This Wednesday, the third day of COP26, the main theme was financial investment.
Among the topics discussed at the meeting were the budget cut for fossil fuels, and an investment of US$ 9 billion in a fund at the Department of State of the United States to finance forest conservation projects with developing countries around the world.
Check out, in five points, the highlights of the third day of COP26
- Cutting funding for fossil fuels
- Joe Biden’s Forest Promise
- The poorest face “traps” in financing
- Climate finance is “out of control”
- Bankers Against Climate Change
Cutting funding for fossil fuels
At least 20 countries have agreed to end funding for fossil fuel projects abroad, a UK official told CNN International, in an agreement that should be officially announced on Thursday (4).
Another source close to the COP26 talks said the US was party to the deal. US State Department officials did not respond to the CNN International to confirm the country’s involvement.
While several countries have already agreed to end international financing for coal, the new treaty would be the first to also include oil and gas projects.
The announcement comes after a series of reports over the past few months that have shown the world must immediately reduce fossil fuel burning if the planet has a chance to avoid warming to 1.5 degrees Celsius above pre-industrial levels.
A recent study published in the journal Nature, for example, found that most of the planet’s remaining oil, natural gas and coal reserves must remain in the ground until 2050 to avoid the worst consequences of climate change.
Most regions around the world, according to the authors, must peak fossil fuel production now or in the next decade to limit the climate critical threshold.
The financing agreement “represents a change in standards that would have been unthinkable just a few years ago,” he told CNN Iskander Erzini Vernoit, climate finance specialist at think tank E3G. “We’ve seen it go from niche frontier concepts to the center of the mainstream.”
Joe Biden’s Forest Promise
A top Democrat in the US House of Representatives has introduced a bill to give financial weight to US President Joe Biden’s commitment to ending and reversing deforestation.
Legislation by House Majority Leader Steny Hoyer would establish a $9 billion trust fund at the US State Department to fund bilateral forest conservation projects with developing countries around the world — the same amount Biden said that the US should contribute.
“We need them to keep him buried,” Hoyer told CNN, referring to preventing countries from cutting down trees. “The first step is to stop losing the forest.”
More than 100 world leaders, representing more than 85% of the planet’s forests, pledged this week to end and reverse deforestation and land degradation by 2030. It was the first substantial agreement announced at the COP26 climate summit in Glasgow.
Twelve parties to the agreement — including the US and the European Union — have committed $12 billion in public funding to protect and restore forests, in addition to $7.2 billion in private capital.
The poorest face “traps” in financing
The world’s 46 least-developed countries talked about the damage climate change is doing to their nations — and the help they desperately need to deal with it.
Rich nations have pledged to provide $100 billion a year to the developing world for adaptation and mitigation by 2020, a promise that has yet to be fulfilled.
However, many of the world’s poorest countries say that even that amount is not enough and are increasingly pushing for climate redress for the damage and loss caused over the years. The limited funds available remain inaccessible to many.
According to Sonam Wangdi, president of the Least Developed Countries Group, the poorest countries are forced to borrow money, leading to what he called “debt traps”.
“We don’t have the capacity, access is a big problem because most of these financing windows have different requirements, different challenges,” he said.
“I mean, if you have a weather disaster and ask for a loan, it takes four or five years. Does not make sense. You cannot help your people, you are not able to refinance, rebuild or secure livelihoods.”
Climate finance is “out of control”
The head of climate and disaster risk reduction at the World Food Program (WFP), Gernot Laganda, told the CNN that climate finance needs to “immediately balance the scales” to get more finance for the people who are most vulnerable.
Mitigation focuses on making climate change less severe by transitioning to a green economy and reducing carbon emissions—adaptation is all about minimizing the impacts of rising temperatures.
Mitigation funding, for example, would be a grant to build a wind farm, while adaptation money would go towards building flood defenses.
Laganda said that “80% of the investment is in energy mitigation and electric cars and only 20% of the investment is in building resilience — this is woefully out of step.”
The WFP head also said that as the frequency of climate-driven extremes has accelerated, more needs to be invested in resilience. In 2020 alone, extreme weather conditions drove 30 million people from their homes, according to the WFP.
Bankers Against Climate Change
Banks, insurance companies, pension funds, money managers and other financial firms with $130 trillion in assets signed up to tackle the climate crisis, adding to the ranks of a coalition led by former Bank of England Governor Mark Carney.
The more than 450 companies in 45 countries that have signed the Glasgow Financial Alliance for Net Zero (GFANZ) control more than 40% of global banking assets. Its organizers predict it could provide $100 trillion in funding over the next three decades — more than $3 trillion a year — to accelerate the transition to net zero carbon emissions.
While the promise sounds great, the net zero commitments made by companies often include loopholes, a lack of transparency, and no enforcement mechanisms to ensure they are met.
“We need to ensure that the commitments made are tracked and held accountable. Ensuring the integrity of these commitments over time is critical to making a real difference, and now we need to resolutely focus on the quality of promises made by financial institutions, not just their quantity,” said Ben Caldecott, director of the Oxford Sustainable Finance Group at the University of Oxford.
(*This text has been translated. Click here to read the original in English)
Reference: CNN Brasil
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