World leaders and negotiators at the UN climate conference in Baku are working towards setting a new climate finance target to address the trillion-dollar costs of assisting lower-income nations in adapting to climate change. The current target of $100 billion set in 2009 was just met in 2022, two years behind schedule.
Reports indicate that global climate finance has increased significantly over the years, reaching $1.3 trillion a year on average in 2021/2022. However, experts estimate that trillions of dollars are needed annually to combat climate change effectively.
Governments around the world are exploring various funding options, including wealth taxes, levies on shipping, and addressing debt. International development banks, supported by taxpayer funding, play a crucial role in providing climate financing to developing nations.
Despite acknowledging the significant climate investment needs of developing countries, developed nations, including the US and EU, have not yet set a specific target for international financial support. The World Bank delivered $42.6 billion in climate finance in its most recent fiscal year, with developing nations heavily reliant on these banks for financing climate projects.
Disparities exist in climate financing between regions, with commercial banks and corporations financing over half of climate-friendly projects in the US and Canada, while private lenders only contributed 7% of such funding in sub-Saharan Africa. It is crucial for international financial institutions to act more swiftly and effectively in providing climate financing to developing nations to address the escalating impacts of climate change.
Source
Photo credit www.euronews.com