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GLASGOW, Scotland — More than 450 companies with a combined $130 trillion in assets have joined the Glasgow Financial Alliance for Net Zero, a coalition of financial firms that have pledged to reach net-zero greenhouse gas emissions by midcentury, it was announced on Wednesday.
Despite that commitment, advocates for “climate justice” at the U.N. Climate Change Conference say there are a number of unresolved issues that the private sector commitments do not address.
“Yesterday we had Finance Day. Unfortunately, we didn't get the assurance, the signals, that developing countries were looking for from the developed countries,” said Mohamed Adow, the director of Power Shift Africa, a climate and energy think tank, at a press conference Thursday morning. “Finance Day” refers to Wednesday’s official theme at the conference, also known as COP26.
Overall, Adow said, the announcements amounted to “dismal progress.”
There are five main reasons that activists and experts say the financial commitments from wealthy nations and their industries are still insufficient to ensure a fair agreement that prevents catastrophic climate change:
Lack of government funding for dealing with climate change in poorer countries
Back in 2009, in order to get developing nations to sign on to the Copenhagen Accord, developed nations pledged to provide $100 billion to combat and adapt to climate change by 2020. But 12 years later, that $100 billion hasn’t been reached. Mobilizing private sector investment is considered a valid way of meeting that goal, under the terms of the agreement, but the pledges made Wednesday are set out over a long time horizon. Essentially, developing countries are saying, “Show us the money, now!”
At Thursday’s press conference, which was organized by the Climate Action Network, Adow called on developed countries to “provide assurance to the vulnerable countries that the $100 billion they were promised 12 years ago is going to be delivered.” Otherwise, all pledges of future action are going to be taken with a big grain of salt.
The private sector doesn't pay as much for adaptation
Banks lend money for projects that they think will make them a profit. So to live up to a pledge of reaching net-zero emissions by 2050, banks will probably have to transition from lending money to fossil fuel companies to produce oil, gas and coal to lending money to companies that build solar panels, wind turbines and other forms of clean energy.
But what about the effects of climate change that have already happened, or will soon occur? Poorer countries — which also tend to be in regions like South Asia, Africa, the Middle East and Latin America — are already dealing with problems like extreme heat waves, more intense storms and sea level rise that they are ill equipped to handle. The agreement for $100 billion per year is supposed to set aside half of that funding for adapting to climate change, but funds for adaptation have been especially lagging, because giving a country like Bangladesh money to build a sea wall doesn’t turn a profit for an American bank.
“Adaptation is generally just a bit more challenging to finance compared to mitigation projects, which often the private sector is more willing to invest in ... because there’s a better return on investment,” Lauren Stuart, a policy adviser at Oxfam, told Yahoo News in advance of the climate change conference. (A mitigation project is one that reduces climate change, like building electric cars or solar panels.) “Developing countries are really going to be looking for a commitment to significantly scale up adaptation finance.”
In a report released on Monday, the United Nations Environment Program (UNEP) found that there is an enormous shortfall in funding for adapting to climate change. “As the world looks to step up efforts to cut greenhouse gas emissions — efforts that are still not anywhere strong enough — it must also dramatically up its game to adapt to climate change,” UNEP executive director Inger Andersen said in a statement tied to the report’s release. “We need a step change in adaptation ambition for funding and implementation to significantly reduce damages and losses from climate change. And we need it now.”
The private sector doesn't invest at all in 'loss and damage'
There is a growing movement for reparations for climate change, because some changes will harm people no matter what is done on adaptation. For example, stronger and more frequent hurricanes are already damaging property and destroying lives.
Activists from developing countries say the countries and corporations that got rich by burning fossil fuels should pay back the poorer people and countries getting hit hardest by the result. Some of them refer to this as “loss and damage” to highlight the fact that this is the same principle as saying you should repay your neighbor for damage caused if you dump pollution on their property.
None of the climate finance announcements from Wednesday included funding for this, however.
“It is time to address the needs of those already suffering from irreversible and unavoidable impacts that are beyond the scope of adaptation,” said Ineza Grace, a Rwandan who co-founded the Loss and Damage Youth Coalition, at Thursday’s press conference.
Rich countries still need to cut their own emissions before demanding poor countries cut theirs
The U.S. and U.K. want developing countries such as India to commit to low ceilings on their emissions that would be implemented soon. But rich countries emit far more per person than developing countries, and they have emitted far more historically.
Prakash Kashwan, a political scientist at the University of Connecticut, summarized the view among developing countries for Yahoo News: “About 75 percent of the current stock of accumulated greenhouse gases came from the developed world. They’re the ones that should be addressing climate change. And, in fact, they should be sort of freeing up some of that space by drastically reducing emissions, but also maybe taking on some of the carbon-removal and carbon-storage kind of responsibilities, so that there is some space for the poorest people in the global South — they can have schools and hospitals, they can grow some food, which actually does release emissions.”
Rich countries are still using fossil fuels
“Net zero” means something has no net climate pollution, because every ton of carbon dioxide that is put into the atmosphere would be pulled out, whether by planting trees or by capturing the carbon and storing it somewhere. But fossil fuels cause other problems too: They emit other forms of pollution that contaminate the air and water of communities near where they are burned, and the process of drilling, mining and transporting them can harm the air, water, land and other industries such as fishing, especially when accidents like oil spills occur. Because poorer areas tend to have less political power, they are more likely to have fossil fuels extracted or burned nearby.
Climate justice advocates and representatives of Indigenous peoples at COP26 want all that to end. Instead, they see rich countries promising only to reach net zero 30 years from now, while the mining and drilling keep going on.
“It's a step in the right direction,” Bineshi Albert, executive director of the Climate Justice Alliance, told Yahoo News in response to Wednesday’s climate finance announcement. “But here's the challenge: It's still based on net zero. Those same banks are still financing oil and gas investment. What we're asking for is divestment from fossil fuels.”
“The U.S. wants to give the impression of climate leadership when, in fact, what it's doing is advancing U.S. oil and gas interests,” Adow said. For instance, he said, President Biden is touting his commitment to reducing emissions of methane, a potent greenhouse gas, by 30 percent by 2030. Achieving that is only a matter of requiring oil and gas producers to clamp down on methane leaking from wells and pipelines, rather than actually phasing out fossil fuels.
To be fair to Biden, the oil and gas industry would be surprised to hear he is advancing their interests. They opposed his plan to charge a fee for methane leaks. Their lobbying against it helped to get it stripped from his Build Back Better package, and the rule limiting leakage is the most he can do through issuing new regulations.
Of course, getting rid of oil and gas requires political will that the U.S. clearly lacks. Biden couldn’t muster the votes in the Senate merely to induce utilities to ditch fossil fuels with financial carrots and sticks, and he’s under pressure politically over rising gasoline prices. But from the vantage point of someone on the frontlines of the climate crisis in a country with one-40th the average income of America, that isn’t a good reason for their country to sign onto an agreement that doesn’t seem fair to them.
Global temperatures are on the rise and have been for decades. Step inside the data and see the magnitude of climate change.
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