This has had a severe impact on joint efforts globally to combat climate change in the context that poor countries have been heavily affected by climate change, which is largely caused by industrial activities in developed countries.
In 2009, developed countries committed to transfer 100 billion USD per year to vulnerable nations hit by increasingly severe climate-linked impacts and disasters by 2020. However, according to the OECD, in fact, developed countries only provided 83.3 billion USD in 2020, 16.7 billion USD short of the set target. Rich countries have also defined that they will not meet this target by 2023.
The figures were announced ahead of the UN Climate Change Conference (COP27) which is scheduled in November, where countries will face pressure to cut CO2 emissions faster. The world is around 1.2 degrees Celsius warmer than in pre-industrial times, creating intense heat waves and more frequent wildfires as recently recorded in the US and Europe.
Under the 2015 Paris Agreement on Climate Change, the signatories pledged to act to limit global temperature rise to below 2 degrees Celsius and 1.5 degrees Celsius as possible. Since then, many studies have been carried out and the reality showed that the world has experienced increasingly severe extreme weather events, posing a great challenge to the goal of curbing the rise of the Earth's temperature.
Finance is one of the necessary conditions, even the key to solving problems related to climate change. However, the financial issue has become a “hot” problem in the negotiations, and developing economies said pollution cannot be controlled without support from the rich countries which have been responsible for most of the CO2 emissions.
Yamide Dagnet, Director for Climate Justice at Open Society Foundations noted: “Honouring that commitment is central to renewing trust. We need developed countries to present credible plans to escalate their climate finance”.
When countries signed the Paris Agreement on climate change in 2015, they accepted that rich countries take bigger and faster steps to reduce CO2 emissions, while providing financial support to help poorer countries reduce their dependence on fossil fuels. The UN has called on the rich countries in the OECD to gradually phase out the use of fossil fuels.
According to experts, rich countries need to stop exploiting oil and gas by 2034 to limit the increase in Earth's temperature to 1.5 degrees Celsius, while giving poorer countries time to replace the income from fossil fuels. For a 50% chance of limiting the global temperature rise to 1.5 degrees Celsius, 19 countries with average non-oil GDP per capita of more than US$50,000 must end production by 2034. Only the “lowest-capacity” countries can continue oil production until 2050.
This stems from the fact that the fossil fuel extraction output of some poor countries is dependent on that source of income, so if fossil fuel revenues are eliminated quickly, the political stability in these nations can be threatened.
In recent years, the European Union (EU) and its 27 member countries have been the largest climate change, financial providers. As crop-shrivelling droughts, rising sea levels and deadly heat strikes the poorest nations, they are also demanding compensation for these escalating climate-linked losses. However, the US, EU and other major polluters still oppose measures that could lead to reparations.
Despite the world's alarms on combating climate change, financial difficulties and the implementation of action programmes have been significantly hindering the set goals. In an assessment of each country's capacity to manage the crisis, experts concluded that most countries were not prepared for the fight against climate change. Most developed countries are most resilient to the effects of climate change thanks to advantages such as systematic governance, the purchasing power of people, and high-quality infrastructure.
However, the recent extreme heatwave in Europe is proof that even developed nations need to factor climate change into their future business and governance decisions. Meanwhile, developing countries are mainly considered to be the vulnerable group due to the lack of protection measures and the need for assistance from developed countries.
