Speaking at the Brookings Institution’s Global Economy and Development Programme Virtual Event, Stiell stressed on the urgent need to rapid ramp up funding to protect the progress made at COP28 in Dubai, “to convert the pledges in the UAE Consensus—to triple renewable energy, double energy efficiency, boost adaptation and transition away from fossil fuels—into real-world, real-economy results”. For all this to be possible Stiell said, “international climate finance must grow up, step up, and scale up, to meet this moment”.
Stiell’s address to the Washington-based think tank on Thursday comes close on the heels of the release of a “draft text” for the NCQG. The text, prepared after a negotiating process that began following the Glasgow talks, still contains a great of divergences in views.
The UN climate chief touched on a two-pronged approach to progress on the vexed issue of climate finance—progress within the UNFCCC process focusing on the new collective finance goal that is to be finalized in Baku and progress outside the UN process in which the World Bank/IMF and the G20 have a critical role. The Annual Meetings this week are therefore an important moment to get climate finance to a state that is fit for purpose. “Progress on climate finance outside our negotiation process enables breakthroughs within it and vice-versa. If we fail at either, it could be a knock-out blow to crucial parts of the Paris Agreement,” said Stiell.
The World bank Annual Meetings, he said, “are once again a huge opportunity to create change” The UNFCCC Executive Secretary referred to steps taken by the multilateral development banks—the World Bank announcing more concessional lending for climate and the IMF looking at ways to incorporate climate action and risks across their work. Acknowledging that this was good news, Stiell warned that “incremental increases” will not lead to an exponential surge of investment and green growth. “On climate finance, we have a need for speed, and without much larger scale, all economies will fail.”
That would mean addressing the fact that too many developing countries are dealing with debt crisis and the sky-high cost of capital. Replenishing the International Development Association, more on debt-related clauses, debt relief, and lending on climate supplemented by continuing progress on reforming the wider international financial architecture and making it fairer and better for developing countries are areas of progress that the UN climate chief hopes for.It is not just the World Bank/IMF that needs to step up. Stiell referred to the G20’s important role. “The G20 countries are their largest shareholders and must fund them properly and demand more, including wider reforms to the international financial architecture, while also working to find new and innovative sources of finance.” Acknowledging that under Brazil’s G20 leadership, climate and finance ministers have “finally been brought together” Stiell said that “this essential collaboration must continue and be translated into clear outcomes.”Even as he pushes on all levers to ramp up climate finance, when it comes to new collective quantified goal to be agreed upon in Baku, the UNFCCC Executive Secretary is clear that it is not his job “to prejudge what the new goal will look like”. He does articulate the broad contours of that goal–public finance must be at the core, and as much as possible needs to be grant or concessional, and it must be accessible to those who need it most. Stiell is clear that public finance alone will not meet the needs, so he calls for making “climate cash count”, that is wherever possible leveraging more private finance and “sending signals to financial markets that green is where the gains are.” It also requires putting in place the mechanism to track and ensure the promised funds are being delivered.
In articulating the contours of the goal, Stiell also makes it clear that Baku is not about renegotiating the Paris Agreement. “COP29 must be the stand-and-deliver COP, recognising that climate finance is core business to save the global economy and billions of lives and livelihoods from rampaging climate impacts. The vital business of who pays and how much can be agreed in Baku, but we are not going there to renegotiate the Paris Agreement.”
Stiell’s vision of the goal goes to yet unresolved question of its structure. The Paris Agreement is clear on the importance of developed countries taking the lead, but it does not preclude other countries from voluntarily contributing. This could take many forms including referencing South-South cooperation that is already taking place. It requires addressing the question of the structure of the goal and whether it is only about mobilizing investment and money into developing countries or if there is broader global investment goal that takes into account what countries are doing domestically. These are yet unresolved questions.
The question of why climate finance is critical is an important aspect of Stiell’s intervention. Through various interventions, Stiell has underscored the importance of recognizing that climate finance for developing countries is not a charity, and while an important pillar of climate justice it is in every country’s interest to step up climate finance. “This is a moment of profound fracture between nations and within them. In times like these, there is a temptation to turn inward. A delusional belief that what happens in my neighbor’s backyard is not my problem or my concern. If we go down this path, it will soon be game-over in the world’s climate fight.”
He stresses the need to recognise that “bigger and better climate finance is entirely in every nation’s interests, and can deliver results everywhere.”
