Global Climate Finance: Waiting for Godot, or Much Ado About Nothing?

By Dr. Raj V. Rajan-

Dr. Raj V. Rajan

Dr. Raj V. Rajan serves on the Board of Directors of non-profits Climate Generation, Environmental Initiative, Fresh Energy, and Pangea World Theater and is a Fellow of the Institute on the Environment, University of Minnesota. Views expressed are his own.

I was not sure if I should go back 70 years and borrow from Samuel Beckett or go back 400 years and borrow from William Shakespeare, to title this earth day rant of mine. The phrase ‘waiting for Godot’ is often used to describe situations where we wait for something to happen, but don’t see signs that it ever will. It seems to describe the current situation in global climate finance. The phrase ‘much ado about nothing” implies a lot of fuss about something which is not important. This seems to describe most of the mainstream western media’s coverage of the ‘news’ around climate finance. You can take your pick if you are a cynic. Some may say I am being just that.

Every year on this day, Earth Day marks the anniversary of the birth of the modern environmental movement in 1970. Wisconsin Senator Gary Nelson, outraged by the massive oil spill outside Santa Barbara California in 1969, leveraged the energy of the student anti-war movement to propose the first Earth Day and capitalize on “emerging public consciousness about air and water pollution”. Act, we did. President Nixon created the USEPA and we successfully relocated much of the belching smokestacks and oozing toxic sludge to dark corners of the world, where people had little say in autocracies or regions constantly in armed conflict we stoke and fuel, where billions of the rest of humanity continue to toil and contribute to our bright future, now cleaner than ever before. Our clean energy future is now fueled by young children mining for battery minerals in conflict-ridden Congo, while we protect our privilege to canoe the pristine Boundary Waters.

Add to this the fact that less than 10% of the world’s population (Europe and its key industrial progeny in the US, Canada, and Australia/New Zealand) have contributed over two-thirds of cumulative greenhouse gas emissions, leaving 90% of humanity holding the bag on most of its impacts. Which brings us to global climate finance.

Climate finance dates back to 1992, with the creation of the United Nations Framework Convention on Climate Change and the Kyoto Protocol’s commitments to fund mitigation and adaptation. Fifteen years later, the Bali Action Plan was launched in 2007 to explicitly focus on developing countries, following up on 2001 commitments made in Marrakech, Morocco. Ten years later, the adaptation fund loudly celebrated the peanuts contributed– $462 million through 2017.

Fast forward to today. I woke up to this headline “The Missing $1 Trillion” last week. For a moment, I wondered if we had scaled back our decades-long annual tax subsidies to our military industrial complex. No, this was the number quoted by a former World Bank Official, on what developing countries will need, to make significant progress on climate adaptation and mitigation. $1 to $3 Trillion a year, to be precise. And this wasn’t the first time we heard this number- it was shouted out loud and clear at COP 27 in Egypt (where they even talked about a loss and damage fund for vulnerable countries) and again at the fossil fuel Mecca that hosted COP28 (where we heard that the world needs $5-$7 Trillion annually through at least 2030).

There is no shortage of alarm bells that keep going off. In 2023, global post-industrial atmospheric greenhouse gas levels reached another record high, while fossil fuel emissions did the same. Yes, over 30 years after the Earth Summit in Rio! Heat waves continue to scorch billion in South and Southeast Asia. Can’t think and see that far? How about what happened to our fellow citizens in Washington DC last summer? Don’t want to focus on the Beltway? How about the seasonal temperature outlook for the rest of the US this summer? 50-60% above normal in New England and from Texas to Idaho. And 40-50% above normal in northern Alaska!

Who is expected to shepherd the implementation of these climate funds, once committed, you ask. Well, 80 years ago, the powers that be created the World Bank Group and the International Monetary Fund- the former to work with developing countries to reduce poverty and increase shared prosperity, and the latter to stabilize the international monetary system. Where are they, you ask. Well, the World Resources Institute asked the right question- “Can Climate Change the IMF?”, after noting that climate-related risks and policies are only considered by the IMF on an “ad hoc and infrequent basis”. At the World Bank, the former Chief resigned a year before his term ended, after refusing to acknowledge that fossil fuels were causing global temperatures to rise. Much was expected of the new World Bank President Ajay Banga, who committed to a new “emergency tool kit” at the “New” Global Financial Pact Summit in Paris a year ago. Where is he today? “Banga Bucks” on the $100 billion a year International Development Association financing commitment, says another byline that quoted him as saying “We are an instrument of the ambition of our donors. I can’t fabricate money out of thin air.” Well, at least, he is honest.

Where are we on the “loss and damage fund”, you ask. How about $656 million, compared to the estimated $400 billion in losses suffered by developing countries each year? Where are we on the “climate adaptation fund”, you ask. After 23 years of talking about it, we are now at $1.1 billion of the trillions needed.  Yes, it is almost time to gather at Baku for COP29 and hear new commitments. $656 million for loss and damage and $1.1 billion for adaptation is not “nothing”, you say. I can tell you what it is, though. They both happen to be about 0.1% of what is needed. I for one will be glad to become a “glass-half-full” guy and stop my “glass-half-empty” rants. When we get to the “half”.

And there are billions besides me who are waiting. Including 1.4 billion in India, who cannot afford to breathe the air, but continue to burn coal because they cannot afford to mitigate or adapt. Never mind that they should not be expected to pay for our mess and we cannot get to the promised land without them. China is doing better because it took most of our belching smokestacks and oozing toxic sludge to become the world’s manufacturer. It saw what that did to its air and water, but also saw profits it could now put to good use. And because it does not suffer from the deadlock of decisions in democracies, China is doing better than the rest of the world put together, without any help from those of us who created the problem. We sit on our hands and complain about India and China, instead. And celebrate Earth Days, thankful for our clean air and water. Sadly. out of sight is still out of mind.