Climate Finance Shadow Report 2020 | UPSC
HEADLINES:
Climate financing adds to poor countries’ debt pile: Oxfam
WHY IN NEWS:
Eighty per cent of climate financing was provided as loans in 2017-18, according to study
SYLLABUS COVERED: GS 3: Reports
LEARNING:
For PRELIMS this report gives you a fair chance to understand the debt trap of Developed countries in the shadow of climate finance . Keep an eye on increasing and decreasing parameters . Take a note on largest donors in your Prelims book.
For MAINS this is an important report explaining – never ending debt of LDC’s and Small Island Countries. Understand the different types of loans under climate financing and go with the recommendations of this report . Let us dive in !
ISSUE:
CLIMATE FINANCE SHADOW REPORT 2020
- International climate finance is a cornerstone of global cooperation on climate change.
- It is rooted in a recognition that climate change is deadly, costly, and that those least responsible for causing it are being hardest hit.
TITLE
Climate finance shadow report 2020 – assessing progress towards the $100 billion commitment.
PUBLISHED BY
Oxfam– A global nonprofit group .
IMPORTANT DEFINITION
CONCERNS
- Public climate finance has increased from $44.5bn per year in 2015–16 to an estimated $59.5bn per year in 2017–18.
- An estimated 20.5% of bilateral climate finance went to Least Developed Countries (LDCs) and 3% to Small Island Developing States.
CLIMATE FINANCE 2017–18: KEY TAKEAWAYS
- Of the estimated $59.5bn in public climate finance reported by developed countries (annual average), climate-specific net assistance may be just $19–22.5bn.
- The net financial value of climate finance to developing countries may be less than half of what is reported by developed countries.
- 80% reported as loans and other non-grant instruments; of all reported climate finance, an estimated 40% was non-concessional.
- Only an estimated 25% of reported public climate finance was for adaptation and 66% was for mitigation.
- The majority of climate finance counted towards donor commitments to increase aid to 0.7% of gross national income.
- Consistent and transparent information is not publicly available to estimate the level of private finance mobilized towards the $100bn goal.
REPORT ANALYSIS
CLIMATE-SPECIFIC NET ASSISTANCE
- Reported climate finance is significantly higher than climate-specific net assistance remains valid.
- It is between $19bn and $22.5bn per year in 2017–18, of which between $6bn and $7bn per year is for adaptation.
- Of the estimated $59.5bn in public climate finance reported by developed countries, climate-specific net assistance may be just $19–22.5bn.
Developed countries’ reported climate finance versus Oxfam’s estimate of climate-specific net assistance(CREDITS : Oxfamilibrary.com)
GRANT EQUIVALENT
- The grant equivalent of reported climate finance in 2017–18 was $25bn (annual average).
- This is less than half the estimated $59.5bn in total public climate finance when donor numbers are taken at face value.
- For Japan, Spain and Germany, it is around half.
CLIMATE FINANCE- MAJOR DONORS (CREDITS : Oxfamilibrary.com)
CLIMATE RELEVANCE
- Due to over-reporting of climate relevance, bilateral climate finance could be around a third lower than reported.
- Some countries count the climate component as 100% of the project budget.
- Even though such projects are explicitly defined as not primarily targeting climate action.
CREDITS : Oxfamilibrary.com
LOANS AND OTHER NON-GRANT INSTRUMENTS
- Around 20% of reported public climate finance was estimated to be grants.
- Compared to 80% loans and other non-grant instruments; of all reported climate finance, an estimated 40% was non-concessional.
- Non-concessional finance has increased significantly.
Climate finance by instrument via bilateral and multilateral channels
(CREDITS : Oxfamilibrary.com)
- Grant-based finance has flatlined.
- Non-concessional finance has increased significantly.
Climate finance broken down by instrument for major country donors.(CREDITS : Oxfamilibrary.com)
IASbhai WINDUP:
RECOMMENDATIONS FROM THE REPORT
- Expand resources and support for locally led action on climate change.
- All countries need to support urgent action to implement the most promising new national and international sources of climate finance.
- Climate funds counted towards the $100bn commitment and UNFCCC obligations should not also be counted towards the 0.7% of GNI aid target.
- All donors should commit to significantly increasing climate finance to LDCs and SIDS.
- COP26 needs to agree a near-term Adaptation Finance Goal to urgently accelerate adaptation finance by 2022.
SOURCES:DownToEarth | Climate Finance Shadow Report 2020 | UPSC
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