Climate change is already hurting our planet and its people. Flooding, drought, more intense storms, decreased food production, increasing water scarcity and greater vulnerability to disease are causing heightened suffering around the world. Although wealthy countries like the United States are most responsible for creating the climate crisis, the world’s poorest and most vulnerable people are paying the highest price — in lives and livelihoods lost.
Developing countries need hundreds of billions of dollars every year to deal with climate change. Though cost estimates vary, the bottom line is that the less we do now, the more we will pay later. International climate finance is the provision of funds by developed countries for developing countries to take climate action.
People in developing countries require climate finance to meet their health, food, energy and other daily needs. Climate finance is also an essential component of international climate negotiations.
Climate action broadly falls into three categories:
- Adaptation: adjusting to the unavoidable impacts of climate change;
- Loss & Damage: harm caused by climate change that is unavoidable and to which it is not possible to adapt, such as the submergence of island nations due to sea level rise and catastrophic weather events like Typhoon Haiyan that struck the Philippines in 2013; and
- Mitigation: reducing climate pollution and embarking on clean development pathways.
The United States is obligated to provide its fair share of climate finance. This obligation stems from:
- The “polluter pays” principle. Polluters – top among them the United States – must clean up the climate pollution which they caused.
- A legal obligation. The United States ratified the United Nations Framework Convention on Climate Change in 1992.
- A moral obligation. The United State bears responsibility as the world’s largest historical polluter and also its largest economy.
For an overview of climate finance, see Paying the High Cost of Climate Chaos: The Story of Climate Finance. Our infographic visualizes who is most responsible for climate change on a global scale (spoiler alert – the U.S.!), who gets hurt the most, what needs to be done, who should pay, where the money can come from and where the money should go.
To learn more about what the United States should be providing in terms of its fair share of climate finance, based on its historical responsibility and capacity to act, see ClimateFairShares.org.
To learn more about what the United States should be doing in terms of its fair share of greenhouse gas reductions, see Fair Shares: A Civil Society Equity Review of INDCs.
Green Climate Fund
The Green Climate Fund is the world’s premier multilateral climate fund. Established under the United Nations Framework Convention on Climate Change, the GCF finances adaptation and mitigation activities in developing countries. Since before the GCF was even established, Friends of the Earth U.S. has been campaigning to ensure that the institution would be as equitable, effective and environmentally sound as possible in meeting the needs of peoples in developing countries and that the U.S. contributes its fair share of funds. We are working to make sure the GCF does not fund dirty energy, and that it does not become an institution dominated by multinational corporations or Wall Street investors that would leave critical, yet unprofitable, climate priorities by the wayside.
Learn more about the GCF here.
Robin Hood Tax: A source of climate finance
Also known as a financial transaction tax or Wall Street Tax, a Robin Hood Tax is a tiny fee on the trades of stocks, bonds and other financial instruments that would generate hundreds of billions of dollars of new revenue. Friends of the Earth is working to establish a Robin Hood Tax in the United States, with a portion of the proceeds allocated to climate finance.
Europe is far along in the process of establishing a regional Robin Hood Tax amongst at least 10 countries. France already has a Robin Hood Tax that in part benefits climate finance.
Learn more about efforts to establish a Robin Hood Tax in the U.S. and internationally here and through the following videos.
What Counts as Climate Finance & the $100 Billion Goal
Developed countries have promised to provide $100 billion by 2020 in climate finance for developing countries. Though $100 billion might sound like a lot of money, it is actually magnitudes below the need. In fact, $100 billion is an arbitrary figure based on politics, not science. But developed countries are far from meeting even the $100 billion pledge.
How developed countries do, or do not, account for their climate finance contributions has proven to be an area of intense controversy and is of critical importance to ensuring that climate finance actually serves those most in need, rather than wealthy governments, multinational corporations or Wall Street. In large part due to the resistance of developed countries, there is no universal system or common methodology to determine what counts as climate finance. For example, does climate finance include private as well as public funds? Does it include any type of financial instrument – grants, concessional and non-concessional loans, guarantees, equity or others? Does the face value of a loan count, or just the grant element? What about financing that benefits multinational corporations rather than local communities in developing countries?
Friends of the Earth believes that to count as international climate finance, funds must be public; grants or grant equivalents; come from developed countries; and remain in, and benefit, developing countries – governments, ordinary people, especially those who are marginalized, and local economies. Finance directed toward dirty energy — including fossil fuels, biofuels and large-scale hydropower – must not be counted as climate finance.
Learn more about how to account for international climate finance and the $100 billion pledge here.