The issue of financing the fight against climate change monopolized the two-week long COP27, the U.N. climate talks in the seaside resort town of Sharm el-Sheikh, Egypt. They especially focused on how wealthier countries can help less developed ones cut emissions and adapt to the dramatic impacts of global warming. With this aim, U.N. experts published a list of projects worth $120 billion that investors could back.
However, another report suggested that developing countries would need to secure $1 trillion in external financing every year by 2030. To this sum, these countries would have to add their own funding to effectively meet the world’s goal of preventing climate change. By contrast, the world’s leading development banks only lent 51 billion dollars to developing countries in 2021, nowhere near enough to make a dent into this issue. For example, Italy, Britain and Sweden were among the countries that pledged more than $350 million to finance solutions to the climate crisis in countries such as Egypt, Fiji, Kenya and Malawi. Britain’s latest Prime Minister, Rishi Sunak, has underlined that “government spending to combat climate change is the right thing to do, from an environmental, moral and economic perspective”.
Leaders from poor countries criticized wealthy governments and oil companies for driving global warming, using their speeches at the COP27 to demand that they pay for damages being inflicted on their economies. In particular, oil companies were called on to use some of their enormous surplus profits to help countries already affected by increasing natural disasters, such as floods and droughts, adapt to these new conditions. Gaston Browne, Antigua’s prime minister, speaking at the conference on behalf of the Alliance of Small Island States, declared, “the oil and gas industry continues to earn almost $3 billion in daily profits. It is about time that these companies are made to pay a global carbon tax on their profits as a source of funding for loss and damage. While they are profiting, the planet is burning”.
The comments reflected increasing tension in international climate negotiations between rich and poor states. Multi-billion-dollar oil industry profits since Russia’s invasion of Ukraine in February, which has roiled markets and disrupted supplies, have angered governments worldwide concerned about climate change and rampant consumer inflation. Senegal’s President Macky Sall told the conference poor developing countries in Africa need increased funding from wealthy nations for adaptation to worsening climate change, and would resist calls for an immediate shift away from fossil fuels African countries need to expand their economies. Although they are in favor of developing renewable energies, they currently still need considerable amount of fossil fuel, just like wealthy countries have used to achieve economic growth. Demand for compensation for the “loss and damage” caused by global warming has long been rejected by wealthy countries, whose leaders are wary of accepting liability for the emissions driving climate change.
Finally, Ukrainian President Volodymyr Zelenskiy told conference delegates in a video message that Russia’s invasion of Ukraine has distracted world governments from efforts to combat climate change and boosted demand for coal: “There can be no effective climate policy without peace.”