TThe costs of adapting to global warming for vulnerable countries are up to 10 times greater than available funding, the United Nations said last week, warning that rising debt is putting more strain on them to face growing climate threats.
Developing countries alone will need $ 500 billion by 2050 for adaptation, which includes such things as building flood defenses, planting urban trees and introducing resistant crops. drought, the United Nations Environment Program (UNEP) said in a report.
But only a fraction of the money needed is on the table, with the gap widening and the cost of debt servicing rising due to the Covid-19 pandemic preventing countries from spending on measures crucial to adapt to global warming, according to the report.
UNEP Chief Inger Andersen told reporters on Thursday that vulnerable countries cannot find cheap finance when they need it most to cope with both the pandemic and climate impacts.
âThey are in a real rush from all sides,â she said. âThat is why it will become absolutely essential to find new ways of enabling funding for these and other countries. “
The report, the latest in a series, said adaptation costs for developing countries are now expected to be “in the upper end” of a previously estimated range of $ 140 billion to $ 300 billion per year. by 2030, before increasing to $ 280 to $ 500 billion per year by 2050.
The world has ‘missed’ an opportunity to invest in more policies and measures to support climate adaptation, as only a small portion of the estimated $ 17 trillion of Covid-19 stimulus packages has been devoted to this area.
Henry Neufeldt, editor-in-chief of the report and senior UNEP researcher, said the increase in debt is “particularly onerous” for low-income countries, urging advanced economies to offer more substantial debt relief.
“Adding additional debt due to Covid-19 will make managing adaptation to reduce climate risks even more difficult than it already is,” he told the Thomson Reuters Foundation.
Most climate finance is currently spent on developing clean energy systems and other ways to reduce global warming emissions – with just a quarter of the nearly $ 80 billion in funding from rich states in 2019. allocated for adaptation – and mainly in the form of loans that must be repaid.
Aid charity CARE International said the UNEP report did not offer ideas on how the adaptation funding gap could be closed.
CARE climate advisor John Nordbo called for a decision at the ongoing COP26 climate summit in Glasgow that âends the blah-bla-bla of developed countries on climate adaptation finance, and puts people first by providing a clear path forward â.
The greatest injustice
Climate finance is high on the agenda as leaders and negotiators continue their meeting in Scotland for the UN COP26 climate talks this week, to keep the goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels.
UN Secretary-General Antonio Guterres, who has urged donors to allocate half of their climate finance to adaptation, said countries must have faster and easier access to finance, cutting red tape administrative issues and being able to access debt relief.
“The solidarity you need is lacking,” he said at the summit last week, referring to climate-vulnerable countries.
A new study last week found that 22 of the world’s poorest countries would need around $ 212 billion collectively to implement planned measures to adapt to climate change, but could only borrow a fifth. of this sum before falling into over-indebtedness.
This is “insane, immoral and unfair” for countries that have done so little to bring about climate change, said Sejal Patel, an economist at the London-based International Institute for Environment and Development (IIED), who published the study.
Many of these governments use up to 20 percent of their budget spending to repay loans, IIED said.
The debt burden of low-income countries around the world hit a record $ 860 billion in 2020 due to the Covid-19 pandemic, the World Bank said in October.
But the International Money Fund and the World Bank struggled to come up with a long-awaited proposal on climate debt swaps that was expected ahead of the COP26 summit, with talks set to continue for some time.
Debt swaps for climate occur when the debtor country, instead of continuing to repay its external debt in foreign currency, makes payments in local currency to finance climate projects in its country on agreed terms.
An adviser to the V20, a group of developing economies vulnerable to climate change, said failure to execute the climate debt swap deal “would undermine confidence” in global climate talks.
“There is a huge gap between this great fire we find ourselves in and the efforts to put it out,” said Sara Jane Ahmed, V20 financial advisor.
“The greatest injustice is that finance and tools like debt-climate swaps can exist but are not on the table.”