Throughout the climate negotiations at COP21, climate finance has remained the elephant in the room – and there is a yawning gap between theory and reality. In this article by Anand Patwardhan, he notes that at the centre of the debate was the promise in Copenhagen to mobilise up to US $100 billion of finance annually by 2020. Of course, the actual text of the accord hedges and caveats this commitment, by noting that “this funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance”.
So, while only the most die-hard optimists would expect that the bulk of the US $100 billion would be new and additional public finance delivered under the United Nations Framework Convention on Climate Change (UNFCCC) process; it is not an unreasonable expectation in the minds of developing countries that there would, in fact, be a substantial scale-up of exactly this kind of low-cost (grant-based) multilateral finance.
Going into Paris, therefore, a key question was the extent to which this promise was on track to be fulfilled. An OECD report released just before Paris painted a rather rosy picture of the situation, saying that total climate finance had risen to US $52 billion in 2013 and US $62 billion in 2014, giving the impression that developed nations were well on their way to meeting the original US $100 billion by 2020 promise. Unfortunately the reality of climate finance appears to be much closer to the Indian assessment.