Climate Finance: Who's paying their fair share?
At the 2009 UN Climate Change Conference, held in Copenhagen, developed countries promised to provide $30 billion for the period 2010-2012, and to mobilize long-term finance of a further $100 billion a year by 2020 from a variety of sources.
This $100 billion per year was intended to meet the needs of developing countries most impacted by climate change. However, this commitment relies on each developing country involved pledging, and does not include any formulae for determining how the target should be apportioned.
New research from the Overseas Development Institute (ODI) seeks to provide a formula based on 3 metrics: gross national income, cumulative carbon dioxide emissions and population. Acknowledging that these metrics are not perfect, the authors offer these metrics as an indicative range to begin holding individual governments to account.
Using these metrics, the ODI report finds that of the 23 developed countries responsible for providing international climate finance, only Germany, Norway and Sweden have been paying their fair share of the annual $100 billion goal. All other countries, including Ireland, are falling short. Australia, Canada, Greece, New Zealand, Portugal and the United States (US) all contributed less than 20% of their fair share of international climate finance. The greatest shortfall in absolute terms is the US, which provides less funding than France, Germany, Japan or the United Kingdom – though its economy is larger than all of them combined.
When it comes to Ireland, the report notes that "Ireland should be contributing $364–900 million a year depending on which metric is used to attribute fair share. In 2017–2018, it provided an annual average of $199 million, or 33% of its fair share measured against the composite index." (p.14). While Ireland has a proud record of providing Overseas Development Assistance (ODA), which has increased in the past number of years, we still lack a strategy for reaching the UN-agreed 0.7 per cent target. We need also to include a strategy to meet our climate finance targets in addition to our ODA target. Social Justice Ireland has called on the Government to develop such a strategy with a view to reaching the UN target by 2030. Notwithstanding our current economic difficulties, Ireland must continue to recover lost ground in relation to our ODA and climate finance commitments if developing countries are to have a chance of emerging from this pandemic and mitigating against future events.
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The ODI report also contains a scorecard of progress towards a fair share of international climate finance (2017–2018) (Table 3, p.10, reproduced below). Countries in dark green are paying their fair share of climate finance. Colours are in quartile increments. Light green, paying 75–100% of their fair share; yellow, paying 50–75% of their fair share; orange, paying 25–50% of their fair share; red, paying less than 25% of their fair share. Ireland is one of the orange countries, paying 25-50% of our fair share.
The ODI report further notes that Ireland "has committed to at least double the percentage of official development assistance spent on climate finance by 2030 (IrishAid, 2021), further indicating that this would be a minimum of €80 million ($94.4 million) annually (Germany and the European Commission, 2020). At this minimum rate, Ireland would provide only 26% of its fair share." (p.14). Clearly more is needed, ring-fenced outside of our ODA commitments. Rebuilding our commitment to ODA , honouring the UN target, and developing a comprehensive strategy to meet our ODA and climate finance targets should be important policy paths for Ireland to pursue in the coming years.