It’s time to put our money where our mouths are

Teresa Anderson is the global climate justice lead at ActionAid International.

The devastating weather patterns that set new records in 2023, claiming lives across the world, have heightened expectations for real and lasting solutions to the climate crisis at this year’s climate change conference in Dubai.

At COP28, world leaders have their work cut out to turn the tide of the climate crisis. But with more than a hundred different and parallel negotiation tracks this year, a handful of key issues require particular attention if we are to have a chance of making this year a success.

Coming up with finance

Finance, and the need to make sure we are putting our money where our mouths are, is a cross-cutting theme. From finalising and filling the long-overdue Loss and Damage Fund to funding the phaseout of fossil fuels, shaping the new climate finance target, shifting finance flows, and taking stock of our progress on implementing the Paris Agreement so far, questions of finance are likely to signal whether we are serious about climate action, or just want to score points.

When you think about it, it’s beyond bizarre that UN climate negotiations are about to hold their 28th COP, and yet are only now putting forward tangible steps to assist communities at the forefront of the climate crisis.

It’s an embarrassment to the entire UN climate framework that it took so long for climate-impacted people to finally be considered as a centrepiece of the climate story.

This decades-long injustice illustrates how powerful countries in the Global North have been throwing their weight around, refusing to own up to their responsibility for causing the climate crisis, and refusing to budge an inch.

In early November, countries eventually agreed on a severely compromised text that is far from what developing countries had hoped for. This text will be submitted to COP, proposing that the World Bank host the Loss and Damage Fund for the next four years, despite huge opposition by the most affected countries.

Big question marks remain on whether the World Bank will meet the agreed conditions to ensure effective distribution of the funds to the communities that need them most.

However, that is the hand we have been dealt. The success of COP28 will now depend on whether developed countries are going to step forward and provide the hundreds of billions of dollars needed to help communities on the front lines to recover and rebuild in the aftermath of climate disasters.

Fossil fuels in the spotlight

Meanwhile, fossil fuels are in the spotlight like never before. To avert runaway climate breakdown, the fossil fuel era must come to an end. No amount of carbon capture and storage technology (CCS), so-called “abatement” of CO2, or any other techno-fantasy can make fossil fuels compatible with a livable planet.

Damage to the planet from the fossil industry is well documented. Rich countries, the ones that have been extracting and industrializing for a century or more, have the responsibility and the means to make the most urgent move away from fossil fuel dependency and to provide finance to the Global South to follow suit.

Hand in hand with this, the need to shift to renewable energy alternatives and ensure that the process is fair and funded is also key.

Linked to all of it is the need for negotiations to develop a New Collective Quantified Goal on finance, to come into effect after 2025.

Learning the lessons from the current $100 billion promise of annual climate finance – reportedly finally met this year, two years late - the new target needs to be more in line with the scale of need, and be based on grants instead of counter-productive loans that push climate-vulnerable countries deeper into spiralling poverty.

There is a moral expectation that rich countries will commit to scaling up climate finance to help developing countries leapfrog the fossil era and go straight to renewables and sustainable farming practices such as agroecology.

Banks still funding fossil fuels

Meanwhile, more money is still being pumped into the causes of climate change than the solutions.

It is a shame that in the seven years since the Paris Agreement, the world’s leading banks have pumped a staggering $3.2 trillion into fossil fuel businesses and a further $370 billion into unsustainable industrial agriculture in the Global South, according to new research published by ActionAid.

We need to address the absurdity that trillions of dollars continue to flow through banks, investors, subsidies, and services towards the expansion of fossil fuels and harmful industrial agriculture corporations, pushing the planet to the brink at a critical time when the planet’s resources need to be put towards ensuring our safe future.

At COP28, the Paris Agreement commitment to “align financial flows with low greenhouse gas emission pathways” will finally put the world’s financial systems in the climate spotlight.

Tying this all together will be the Global Stocktake, a cyclical review of our collective progress in implementing the Paris Agreement in full. Spoiler alert: We’re not on track.

The question now is, what do we do with that information? For the stocktake to have a real impact on scaling up action, it needs to be both “backward-looking” in its frank analysis of how and why the richest polluting countries have so far failed to do their part, and “forward-looking” in prescribing a fully funded and fair phase-out of fossil fuels.

As with almost all issues negotiated at COP, finance will be key to unlocking trust and real progress. Finance does not only make climate action fair. It’s what makes climate action possible.

Climate action needs to go beyond finger-pointing, to putting forward real money to make things happen.