Climate risk disproportionately affects the most exposed and vulnerable; therefore, sharing climate risk is a matter of justice and a just transition. A key goal is the mobilisation of US$100 billion annually from developed to less developed nations. Also, the correlation between climate change vulnerability and geopolitical conflict makes climate change a global security concern. 

4 min read | Last updated 5 March 2021

Most news stories about climate financing focus on private sector funds flows, ie ESG investment to ‘shift the trillions’ in the bonds and equities markets toward businesses taking climate action.

But climate finance also includes public funds flows between nations.

Source: Heinrich-Böll-Stiftung

There has been a decade-long global pledge to shift US$100 billion dollars per year from developed nations to less developed nations in order to redistribute global climate risk. This idea has been in climate accords since the Copenhagen Accord, 2009, which described potential funding sources as ‘public and private, bilateral and multilateral, including alternative sources of finance’. The Independent Expert Group on Climate Finance asserts that US$100 billion per annum by 2020 is a floor, not a ceiling. UNEP estimates that global adaptation costs could be up to US$300 billion per annum by 2030 and US$500 billion per annum by 2050 (UNEP, 2016).

SDG 13 embeds climate risk sharing in target 13.a.1 to mobilise $100 billion annually by 2020 from all sources to address the needs of developing countries. This goal was shifted to 2025 as it became clear that it would not be achieved by 2020.

The international climate finance commitment is not being met, which means that climate risk is not being fairly shared. It is a challenge to calculate exactly how much climate finance is actually being mobilised. In 2015, conflicting estimates ranged from just over US$2 billion per year to around US$60 billion (Brookings, 2015). Transparency is an issue, with proven greenwash occurring in climate finance reporting, such as double accounting, despite generous accounting methodologies (eg loans are allowable as climate finance).

At COP25 in Madrid, 2020, some developed countries (whose wealth has been built on the use of fossil fuels) indicated that they are not inclined to compensate less developed nations suffering the effects of climate change (WRI, 2019). COP26 President Alok Sharma is determined that developed countries must meet the US$100 billion commitment and has also called for the best use of climate finance, such as gender responsive financing, more adaptation funding, more grant-based financing and nature-based solutions (WWF, 2020).

In 2018, New Zealand committed to providing NZ$300 million in climate-related overseas aid over four years, including NZ$15 million to the Green Climate Fund, with half of these funds committed to Pacific Island countries (MFAT, 2019). Support includes: infrastructure, climate hazard mapping and risk planning, customised climate information, projects to get rid of invasive species, technical assistance to improve access to international climate finance and resilience projects (Prevention Web, 2019).

However, funds for global climate finance under the Paris Agreement are supposed to be additional to other climate-related Official Development Assistance support so that it does not displace other crucial sustainable development aid – Oxfam reports that this distinction seems blurred in New Zealand’s accounting for climate-finance and climate-related support (ibid.).

New Zealand’s contribution toward the US$100 billion per year is about NZ$75 million per year, while its fair share would be between NZ$300 million and NZ$540 million per year. New Zealand ranks poorly, at 21st out of 23 highly developed nations in actual per capita donation terms. That said, New Zealand provides funding in the form of grants, not loans, and contributes at least 59% of funds toward adaptation measures (Oxfam, 2020 (pdf)).

There is a correlation between climate change vulnerability and geopolitical conflict. Seven of the ten countries assessed as most vulnerable and least prepared for climate change host a peacekeeping mission (UN News 2020).

Countries enduring conflict have not only a lower absorptive capacity (less able to absorb climate shocks, such as floods and famines), but also a lower adaptive capacity (such as the ability to improve infrastructure or shift agricultural system). Yemen, Mali, Afghanistan, Democratic Republic of the Congo and Somalia are all in conflict and are among the lowest ranked nations for climate change resilience.

Exacerbating this, countries in conflict often suffer environmental damage, due, for instance, to the destruction of natural assets and agricultural and industrial facilities, causing pollution, and exploitation of resources to fund or supply the war machine (ICRC, 2020 (pdf)).

The UN Security Council held its first debate on climate change in 2007 and its second in 2011, during which it was questioned whether climate change really fitted into the UNSC’s scope and what actions it could possibly take (Scott and Andrade, 2012). But by 2020, the real and potential impacts of climate change on peace were well documented and it was pointed out that the UNSC, being the only UN body that can adopt binding agreements, could be a vehicle for hard intervention (Adelphi, 2020 (pdf)).

New Zealand expressed concerns to the UN Security Council in 2011 about the threat of climate change to peace and security, pointing out that low-lying small island states face ‘the ultimate security risk – that of ceasing to exist’ (UN, 2011). New Zealand used its presidency of the UNSC in July 2015 to chair debate led by small island developing states (not only those in the Pacific) about their concerns, including climate change. New Zealand ‘viewed its own peace and security as being directly affected by the prosperity and stability of the small island developing states in its region, the Pacific’ (Breach, 2017 (pdf)).

Nevertheless, the UNSC is a divided body in which permanent members (the US, the UK, France, Russia and China) hold vetoing rights. In early 2021, the British prime minister urged members to consider that ‘climate change is a threat to our collective security and the security of our nations’ and that if a warlord or civil war had caused the suffering caused by climate change, ‘nobody would question the duty of the UNSC to act’.

Russia argued that the Council should leave climate action to specialised agencies, and India argued that there is no accepted methodology showing that conflict is caused by climate change (Politico, 2021).