UK COP26 Presidency is publishing the Climate Finance Delivery Plan, to provide clarity on when and how developed countries will meet the $100 billion climate finance goal and how the financing will prospectively proceed until 2025.
Climate finance plays a critical role in helping developing countries fight climate change and adapt to its impacts. That’s why, in 2009, developed countries agreed to mobilize $100 billion in climate finance per year by 2020, and in 2015 agreed to extend this goal through to 2025. While developed countries have significantly scaled up their support over the last decade, recent trends show that it is unlikely the $100 billion goal was met in 2020.
Against this background and with COP26 approaching, the Honourable Jonathan Wilkinson, Canada’s Minister of Environment and Climate Change, and Jochen Flasbarth, Germany’s State Secretary at the Ministry for Environment, Nature Conservation, and Nuclear Safety, accepted a request from COP26 President-Designate Alok Sharma to work together to produce a focused Delivery Plan on the $100 billion commitment with the objective of building confidence and trust that developed countries will deliver on their promise.
Building on assessments of progress on the $100 billion goal to date, the Delivery Plan sets out an estimated trajectory of climate finance from 2021 through to 2025, taking into account new climate finance pledges from individual developed countries and multilateral development banks, as well as collective qualitative actions to improve the delivery of climate finance.
Based on the analysis from the Organisation for Economic Cooperation and Development (OECD) of recent climate finance pledges, the forward-looking Delivery Plan shows that developed countries will make significant progress towards the $100 billion goal in 2022, and provides confidence that it will be met in 2023. The data also provides confidence that developed countries can mobilize more than $100 billion per year thereafter through to 2025.
Though it is disappointing that the goal was not met on time, the redoubling or significantly increased efforts from a large number of developed countries—including Canada, UK, Germany and others—provide important signals of willingness to deliver to developing countries. The vast majority of increased climate finance in the projections comes from public finance. Given that levels of mobilized private climate finance to date have underperformed against expectations, the plan makes clear that more needs to be done in this respect, but does not rely on a significant improvement in this for the goal to be met by 2023.
Furthermore, based on consultations undertaken by Minister Wilkinson and State Secretary Flasbarth, additional pledges from developed countries may be expected this year but are not yet ready to be included in the analysis at the time of publishing. These additional pledges are likely to further increase the projections outlined in the report. Individual country pledges to date have been published on the UK COP Presidency’s Website. The Plan acknowledges a number of additional issues that developed countries will look to improve in the delivery and mobilization of climate finance to 2025, and lays out a set of guiding principles for collective actions, including increasing financing for adaptation, the need for a reasonable share of grant-financing besides loans, addressing barriers to accessing climate finance, and improving private finance mobilization.
Importantly, the Plan states that developed countries will continue to engage with developing countries and other key stakeholders and partners to ensure climate finance is delivered effectively, efficiently, and at scale.
The OECD supported the work on this Delivery Plan with its expert analysis that provides aggregate, forward-looking estimates of an increase in climate finance from 2021 to 2025. The co-authors would also like to thank Sweden for its valuable input.
Climate finance will be key at COP26 in Glasgow later this month. Providing clarity on the timing and sources of funding is only the first step on the path towards delivery. Robust conversations will continue at COP26 on ways to ensure countries are collectively doing what is needed to deliver on the goals of the Paris Agreement.
Notes to editors
- In 2009, developed countries committed to a goal of mobilizing jointly $100 billion a year by 2020 to address the needs of developing countries, in the context of meaningful mitigation actions and transparency on implementation. This collective goal was reaffirmed under the Paris Agreement in 2015 as Parties committed to continue delivering on this goal through 2025.
- In June 2021, the Prime Minister of Canada announced that Canada will double its international climate finance commitment to $5.3 billion over the next five years. Canada’s increased commitment to climate finance includes an increased focus on adaptation and recognizes that urgent action is needed to address the interconnected crises of climate change and biodiversity loss, which disproportionately affect the poorest and most vulnerable.
- Since 2015, the Government of Canada has invested over $100 billion in clean growth. The Government of Canada’s existing climate actions put Canada on a path to exceed its previous target and allowed the government to set an ambitious new target of 40%–45%reductions below 2005 levels by 2030 earlier this year.
- Germany is to become climate neutral by 2045 and has outlined a path to achieve this with binding targets for the 2020s and 2030s.
- The interim target for 2030, currently 55 percent, is being increased to a 65 percent greenhouse gas reduction compared to 1990. A new interim reduction target of 88 percent has been set for 2040.
- Climate action efforts up to 2045 will thus be more appropriately distributed across the current and future generations. Germany is moving away from coal during the 2030s. Coal-fired power generation is set to end by 2038 at the latest.
- By its Climate Change Act Germany has retained the system of year-specific permissible emission levels for the individual sectors for this decade, with these levels significantly reduced.
- The new German 2030 climate target also takes account of the new, higher EU climate target for 2030, which all member states agreed on at the end of 2020 during Germany’s Council Presidency.
- The EU and its Member States wish to communicate the following Nationally Determined Contribution. The EU and its Member States, acting jointly, are committed to a binding target of a net domestic reduction of at least 55% in greenhouse gas emissions by 2030 compared to 1990.
- With new 2030 mitigation targets this year from the Canada, Japan and the US, combined with ambitious action from the EU and UK countries accounting for more than half of the world’s economy have now committed to the pace of emission reductions required globally to limit warming to 1.5°C.
- The financial support for international climate action has been consistently increasing and on a high level in recent years. In 2020, Germany provided in total EUR 7.83 billion for international climate finance. As part of that, Germany was significantly surpassing its pledge to double climate finance from budgetary sources to EUR 4 billion by 2020. As announced at the G7 summit, Germany also wants perspectively to further increase its climate finance, from 4 to EUR 6 billion annually by 2025 at the latest.
- The United Kingdom holds the Presidency of COP26, this year’s international climate meeting and negotiations. Climate finance is one of the four COP26 goals, a key priority for the UK’s COP26 Presidency.
- In 2019, the UK doubled its climate finance commitment to £11.6 billion between April 2021 and March 2026, compared with the previous five-year commitment of £5.8 billion between April 2016 and March 2021. These amounts follow on from the £3.8 billion spent on international climate finance between April 2011 and March 2016.