The Pantanal, the world’s largest tropical wetland sprawling across Brazil, Bolivia, and Paraguay, has been ravaged by intense wildfires since May 2024, becoming drier, and making wildfires more likely. Meanwhile, plans to dredge a 500-mile waterway through the Pantanal for animal feed transport would endanger the livelihoods of three million Indigenous people who live there.
Meanwhile in Africa, at least 20 countries all over the continent—including normally dry Sahara Desert nations—have experienced flash flooding and mudslides this year, killing thousands and displacing millions. South Sudan, involved in a civil war aggravated by the extreme drought brought on by the climate crisis, is simultaneously being ravaged by flash floods.
Similar horrific climate catastrophes are happening in India, Pakistan, Southeast Asia, China, Mexico and Pacific Island countries.
What all of these events have in common is that every single one of these BIPOC in the Global South are innocent victims of climatic collapse caused by the carbon-rich lifestyles of people in the industrialized countries of the Global North, especially the United States.
The day of reckoning has arrived for the world’s richest 10%—especially the jet-setting top 1%. Will they and their governments take ethical and financial responsibility for the loss and damage suffered by billions living in poor countries?
What is climate finance?
The sum total of all public and private funds for mitigation and adaptation to the extremes of the climate crisis is referred to as climate finance. Article 9 of the Paris Climate Accord, a quasi-legally binding agreement signed by 194 nations plus the European Union in 2015 to cap carbon emissions with the goal of keeping the average global temperature at or below 1.5℃ above pre-industrial levels, includes a reinstatement of a climate finance mandate: “Developed countries shall provide financial resources to assist developing countries with respect to both climate change mitigation and adaptation.”
Earlier in the non-binding Copenhagen Agreement of 2009, the Global North pledged $30 billion between 2010 and 2012 to Global South countries for mitigation and adaptation activities, followed by $100 billion per year by 2020. The Paris Agreement extended the aid until 2025.
The United Nations serves as the arbiter of climate finance between the Global North and South. Climate finance may take the form of concessional loans characterized by longer repayment periods and lower interest rates, grants that don’t have to be repaid, or donations. Green bonds and debt swaps are other mechanisms of climate finance.
The UN suggested recently that at their next international meeting in November 2024, they should “instigate a major step up in climate finance” from “billions to trillions.”
Why is climate finance important?
Climate finance is important because it helps poor countries suffering the worst effects of human-caused climate change. It jumpstarts renewable energy development, sustainable transport, and other ways the Global South can avoid adopting fossil fuel infrastructure which would set them on the same path of high carbon emissions that industrialized countries have taken.
Examples of climate finance
There are numerous examples of how funds from climate finance are being used around the world. Here are a few:
- Cambodia accelerates solar energy adoption
- Mauritius builds a coastal sea wall
- Nepal restores forests and practices climate-smart agriculture
Is climate finance working?
The general consensus among Global South countries is that they’re being drastically underfunded by climate finance even while climate crisis effects are intensifying, indicating ever-increasing needs for more permanent and effective mitigation and adaptation. Climate-financed forest restoration, sea walls, and drought-resistant seeds are mere stop-gap measures to an existential crisis. Here are two examples of how woefully inadequate climate finance is for BIPOC countries.
Africa and climate finance
The World Meteorological Organization estimates that climate adaptation in sub-Saharan Africa will cost $30 billion to $50 billion every year. However, in 2021, the region received roughly $10.8 billion in adaptation finance, according to the non-profit Climate Policy Initiative that tracks climate finance flows.
At a September 2024 conference of environment ministers in Africa, Simon Stiell, the Executive Secretary of the United Nations Framework Convention on Climate Change, urged the Global North to move away from the current “epidemic of underinvestment” toward robust and comprehensive climate finance for Africa in renewable energy and climate resilience, especially clean cooking.
According to a 2024 report by the International Energy Agency, the African continent is home to roughly 20% of the human population, but 600 million—53% of people—lack electricity and over 1 billion cook over open fires, often using wood, charcoal, or animal waste, endangering human health and contributing to deforestation and carbon emissions.
Yet, on an equatorial continent where the potential for solar power is great, only 2% of global clean energy investment occurs there. Instead, fossil fuel companies are building power plants run on coal or methane.
Africa is also home to 40% of the world’s mineral deposits needed for electric vehicles. The Democratic Republic of Congo, in fact, possesses 60% of global cobalt needed to manufacture lithium-ion batteries.
As it stands, the Global North is poised to use Africa for cheap mineral extraction, but keep manufacturing at home. For example, the European Union has set forth a policy that 40% of mineral processing should occur there. The UK has a similar strategy in the works.
However, if mineral processing stayed in Africa, according to the nonprofit Publish What We Pay, Africa’s annual GDP would balloon by $24 billion and create 2.3 million jobs, injecting a major boost to its economy.
Pacific Islands and climate finance
In an open letter to Mukhtar Babayev, president-designate of the COP29 United Nations climate summit, which will take place in November 2024 in Baku, Azerbaijan, Joseph Zane Sikulu, the Pacific Director for the nonprofit 350.org, expresses his frustration about the abject failure of climate finance:
“We need action. Fossil fuels are at the root of this crisis, fossil fuels threaten our islands…Instead of holding the fossil fuel industry to account, you have presented a greenwashing fund to allow industry to continue with business as usual…The $1-billion fund will operate at market rates instead of concessional finance, a pitiful gesture when set against the colossal sums needed for genuine climate action and reparations—a cynical attempt to distract from your country’s destructive environmental practices…We have neither the time nor the patience for more scams, or games of smoke and mirrors like your greenwashing fund. To keep global warming below 1.5℃, we need a full and immediate phase-out of fossil fuels—period.”
If that were to happen, the world would save tons of money. According to an April 2024 report, the costs of unmitigated climate change—$38 trillion by 2050—are already six times higher than those for implementing measures to curb it in order to stay below 2℃ above pre-industrial temperatures. Study coauthor Anders Levermann commented: “Staying on the path we are currently on will lead to catastrophic consequences. The temperature of the planet can only be stabilized if we stop burning oil, gas, and coal.”
Despite the alarms raised by scientists over the past 30 years, oil and gas production is at record levels in the US, and several fossil fuel companies are reneging on their pledges to invest in renewable energy.
