As COP29 begins, what is Canada’s role in climate finance negotiations? – Nationally
This year’s climate talks are expected to be headlined by heated debates about whether Canada and other rich countries, which have contributed to global warming, should financially compensate other countries in their struggle to deal with climate change.
Many pressing questions for negotiators are on the table: How much should those rich countries pay? Which countries will have to contribute? And how should the money be given?
The answers may determine how much money developing countries can get for everything from renewable energy projects to wetland conservation.
Failure to meet a new goal at the United Nations’ annual climate talks could undermine confidence in major international agreements and undermine efforts to limit global warming, observers say.
“It’s very high,” said Bill Hare, CEO of Climate Analytics, a Berlin-based climate think tank.
Here’s what you need to know about climate finance talks – and Canada’s role in them – as the 29th annual United Nations climate conference, or COP29, begins in Azerbaijan’s capital, Baku.
The UN climate talks have recognized that rich and historically oil-producing countries bear the greatest responsibility for solving the climate change problem.
To put it in perspective, Canada and 22 other high-income countries – among them, the United States, Japan, Australia and Western European countries – are responsible for half of the world’s average greenhouse gas emissions since the mid-19th century, despite making up about 12 people. On a per capita basis, Canada is among the most polluting countries.
Canada and those 22 wealthy nations agreed in 2009 to pool $100 billion a year by 2020 to support other countries to reduce their emissions and protect their citizens from the worst effects of climate change. That funding comes from both public and private finance, such as government loans and grants or private sector investment in new green technology sectors.
In Canada, that led to contributions as diverse as $225,000 for solar plants in Samoa to $240 million in grants for the world’s largest dedicated climate fund. The Green Climate Fund has supported projects to expand the electric bus fleet in Jamaica and built one of the world’s largest solar energy projects in Egypt.
However, the international goal of $100-billion was met for the first time in 2022, two years later. In some cases, developing countries often have difficulty accessing such funds, said Soomin Han, a climate finance policy analyst at Climate Action Network Canada.
“That led to a loss of trust between the north and the south of the world,” said Han.
On the contrary, negotiating a new climate finance agreement that is both attractive and fair is a “moral imperative,” he said.
Why will climate finance dominate these discussions?
Countries have agreed to come up with a new joint goal by 2025 that will replace the $100-billion bond. With that deadline approaching, negotiators are expected to outline the details of the new pledge at COP29.
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It coincides with another deadline next year for countries to release their updated climate plans – detailing how they plan to reduce emissions by 2035 in an effort to limit global warming to 1.5 degrees, as set out in the agreement reached in Paris at COP21.
Setting a realistic climate finance goal will be key to making those plans a reality, said Catherine McKenna, Canada’s former environment minister.
“To what extent pollution must be reduced, money must go from fuel to clean (energy) at a high level, and then you have to think about people,” said McKenna.
“And you can’t do any of those three things without money.”
How much does Canada owe?
Under the existing target, Canada by 2021 doubled its climate finance pledge to $5.3 billion over five years. A coalition of Canadian charities has pushed the government to at least triple that amount, to $15.9 billion, over the next five years ending in 2031.
Naomi Johnson, co-chair of the Canadian Coalition on Climate Change and Development, or C4D, called it “down payment.”
“There will need to be a lot more going forward to meet our climate goals and meet our global commitments,” Johnson said.
It can represent only a small part of the larger goal that will be discussed in the discussions. Several independent assessments say developing countries may need more than $1 trillion to meet their climate goals.
The United Nations Trade and Development, a UN agency that proposed an annual goal of $1.46 trillion by 2030, suggested that it would be equal to what rich countries spend on their military budgets and less than their combined fuel subsidies.
Canada, along with other rich countries, did not introduce a dollar proposal.
The Minister of Environment and Climate Change, Steven Guilbeault, suggested that it may not be a single number, reflecting layers of public and private funding, as well as international commitments from institutions such as the World Bank.
However, it may be a roadblock to find out how much rich countries owe, some observers say, and who should pay.
“The new climate finance promise is going to be a really bad negotiation,” said Catherine Abreu, director of the International Climate Politics Hub and a leading Canadian climate policy advisor.
The current list of 23 donor countries is more than 30 years old. Rich countries, including Canada, are now suggesting that China and other Gulf states, for example, should be required to contribute to a new climate finance goal as their emissions have increased significantly as their economies grow.
However, there are concerns that some rich countries may use those arguments in a bad-faith attempt to evade their obligations after years of failing to meet their climate finance goals, Abreu said.
“Canada will have to and can play a positive role in closing these divisions,” he said.
What is Canada’s role in climate finance discussions?
Guilbeault says Canada has played an important role for many years in international financial discussions.
“I think people see Canada as a reliable partner and a bridge builder in these negotiations to help countries find solutions to these difficult negotiations, and I will certainly be happy to try to play that role again in Baku this year,” he said in a recent statement. interview.
Alongside Germany, Canada was asked to take the lead in getting rich countries to meet the previous $100 billion target.
Recently, Canada and Switzerland were the first countries to put forward specific eligibility criteria to expand the donor base to include new countries. Canada’s proposal would see Russia, Saudi Arabia and China added to the list.
Canada has already shown leadership in navigating this “complex issue,” said Han, a climate finance policy analyst with Climate Action Network Canada. Now, Canada must ensure that discussions about who pays do not interfere with the adoption of the new objective.
“It needs to increase speed to build consensus among developed countries,” Han said.
Where should the money go and how should it be delivered?
Johnson, who is the co-chair of C4D, suggested how countries would deliver a new climate finance policy that would be more important than the dollar value. The coalition, along with developing countries, has been calling for a large portion of climate finance to be government grants, instead of loans that could drive developing countries into debt.
An analysis by the International Institute for Environment and Development found small developing countries and a group of least developed countries would spend about US $59 billion on debt payments by 2022, compared to the $28 billion they received in climate finance. Of that $28 billion, about half was given as loans, the analysis suggests.
Johnson said it was “appalling” that Canada was one of the largest lenders to its climate finance obligations.
Guilbeault said Canada is making progress and aims to split between loans and grants in climate finance, still falling short of the 60-40 loan-favoring split announced by the coalition.
“My hope is that we can get to 50-50 soon,” he said.
Observers also pushed for countries to better allocate funding for projects that help countries reduce emissions and those that help them adapt to the effects of climate change.
Complicating those discussions is the question of whether the goal should include money to help pay for the losses and damages developing countries are already facing as a result of climate change.
Although last year’s negotiations started a fund for losses and injuries, developing countries have expressed concern that if they are not included under the new policy, they may lose money.
Canada, which was an early supporter of the fund with a pledge of $16 million, wants to keep it separate because of concerns it could derail the talks.
The talks are set to address several other major issues, including how to track the money transparently and how to split contributions between the public and private sectors.
