{"id":51617,"date":"2024-06-10T14:23:06","date_gmt":"2024-06-10T13:23:06","guid":{"rendered":"https:\/\/www.climatechangenews.com\/?p=51617"},"modified":"2024-06-11T08:30:11","modified_gmt":"2024-06-11T07:30:11","slug":"no-shortage-of-public-money-to-pay-for-a-just-energy-transition","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2024\/06\/10\/no-shortage-of-public-money-to-pay-for-a-just-energy-transition\/","title":{"rendered":"No shortage of public money to pay for a just energy transition"},"content":{"rendered":"

Tasneem Essop is executive director of Climate Action Network International and Elizabeth Bast is executive director of Oil Change International.<\/i><\/strong><\/p>\n

Rich countries have a bill to pay. A study in the journal Nature says they will owe low- and middle-income countries an estimated $100 trillion-$200 trillion by 2050 since they have<\/a> caused the climate crisis with their outsized emissions, while developing nations bear the brunt of the impacts.\u00a0<\/strong><\/p>\n

As negotiators gather in Bonn this week to prepare for November\u2019s COP29 climate summit, wealthy governments have to face the music and pay their fair share of climate finance. With low-income countries struggling with rising seas and spiralling unjust debts, the stakes have never been higher.<\/a> The good news? Rich countries can<\/i> deliver the funds needed for climate action. What is lacking is the political will, as usual. But we can change this.<\/p>\n

Bonn bulletin:<\/strong> Crunch time for climate finance <\/a><\/p><\/blockquote>\n

At last year\u2019s COP negotiations, world leaders recognised for the first time that all countries must \u201ctransition away from fossil fuels<\/a>\u201d in energy systems. This year they must agree on a new climate finance goal for 2025, which will set a new benchmark for the quantity and terms of the money owed.<\/p>\n

Year after year, wealthy countries have failed to pay up. While transitioning away from fossil fuels is technically possible and relatively low-cost, the failure to finance transformative climate solutions like 100% renewable-ready grids, energy access, and programs to support workers and community transitions is one of the key remaining obstacles to tackling the climate crisis. Meanwhile, the lack of funding to adapt and respond to climate impacts means fires, droughts and floods are already bringing devastating consequences.<\/p>\n

As UN Climate Change Executive Secretary Simon Stiell has said, \u201cA quantum leap this year in climate finance is both essential and entirely achievable.\u201d<\/a> But, as negotiations have begun to establish a new global climate finance target, wealthy countries are once again trying to shirk their responsibilities.<\/p>\n

Loans and \u2018private-sector first\u2019<\/b><\/h3>\n

They have come to the table with only tiny amounts of money. Worse, they argue it should be delivered mostly as loans, investments and guarantees – which they profit from, while climate vulnerable \u2018recipient\u2019 countries rack up debt<\/a>. The US, Canada, UK and their peers claim <\/a>that there is not enough public money to do anything else. Yet we know they can come up with enormous sums, like for COVID stimulus plans<\/a> and for bailing out the banks.<\/p>\n

Wealthy countries say the private sector can cover most of the costs instead. This \u2018private sector first\u2019 approach is particularly emphasized for energy finance. The idea is that all that is needed is a bit of public finance to \u2018de-risk\u2019 energy investments and attract much greater sums of private finance.<\/p>\n

But as a former World Bank Director has argued, this approach has consistently delivered far less money than promised<\/a> and \u201chas injustice and inequality built in,\u201d<\/a> while reducing the role of government action for creating the right market conditions to deliver profits to investors. We need much more public funding to be delivered as grants for a fair energy transition.<\/p>\n

Developing countries suggest<\/strong> rich nations tax arms, fashion and tech firms for climate<\/a><\/p><\/blockquote>\n

Rather than relying on the private sector, rich countries can afford the grants and highly concessional finance required for a fast, fair and full phase-out of fossil fuels, which societies and communities want. There is no shortage of public money available to fund climate action at home and abroad. Rather, a lot of it is currently going to the wrong things, like dirty fossil fuels, wars and the super-rich.<\/p>\n

The lack of progress is also a symptom of a larger global financial system where a handful of Global North governments and corporations have near-full control. This unjust architecture results in a net $2 trillion a year outflow<\/a> from low-income countries to high-income countries, historic levels of inequality and food insecurity, and record profits<\/a> for oil and gas companies.<\/p>\n

Make polluters pay<\/b><\/h3>\n

To raise the funds, wealthy governments can start by cutting off the flow of public money to fossil fuels and making polluters pay. The science is clear that there is no room for any new investments in oil, gas or coal infrastructure if we want to secure a liveable planet. And yet governments continue to pour more fuel on the fire, using public money to fund continued fossil fuel expansion to the tune of $1.7 trillion in 2022.\u00a0<\/a><\/p>\n

There is already momentum to stop a particularly influential form of fossil fuel support. At the COP26 global climate conference in Glasgow, 41 countries and institutions joined the Clean Energy Transition Partnership (CETP)<\/a>. They pledged to end all direct international public finance for unabated fossil fuels by the end of 2022 and instead prioritise their international public finance for the clean energy transition.<\/p>\n

Rich nations meet $100bn climate finance goal<\/strong> \u2013 two years late<\/a><\/p><\/blockquote>\n

With the passing of the end of the 2022 deadline, eight out of the sixteen CETP signatories with significant amounts of international energy finance have adopted policies that end fossil fuel support – and we see international fossil finance figures dropping by billions as a result.<\/p>\n

Making fossil fuel companies pay for their pollution through a \u2018windfall\u2019 tax on fossil fuel companies in the richest countries could raise an estimated $900<\/a> billion by 2030. Alongside taxing windfall profits, a progressive tax on extreme wealth starting at 2% would raise $2.5 trillion to 3.6 trillion<\/a> a year. Brazil currently has a proposal to tax the super-rich globally, which is gaining momentum at the G20.\u00a0<\/a><\/p>\n

Canceling illegitimate debts in the Global South<\/a> can free up even more.<\/p>\n

The public money is there for a liveable future for all. As leaders negotiate on the next climate target, we must ensure those most responsible for the climate crisis finally pay up.<\/p>\n","protected":false},"excerpt":{"rendered":"With negotiations underway to establish a new global climate finance goal, wealthy countries are once again trying to shirk their 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