During the year of the G7 in Biarritz, France announced the doubling of its contribution. With a contribution of 1.5 billion euros, France becomes the second largest contributor to the Green Fund for the period 2020-2023. To date, 124 projects worth $5.6 billion have been funded by the Green Fund for nearly 100 countries. At the end of 2020, a clear measure of the success of the climate finance system is the progress of the reaffirmed commitment in Paris to mobilize the $100 billion per year. The latest “One Planet” event, on the sidelines of the Green Fund resupply conference in Paris (24 and 25 October), mobilized the international community. The event showcased the new avenues of “mixed funding” and the Green Fund was recapitalized to the level of nearly $10 billion expected by the President. It is notoriously difficult to assess progress towards the $100 billion climate finance target. Five years after the conclusion of the Paris Agreement, it is time to pursue the broader goal of offshoring all financial flows in order to reduce emissions and adapt to climate change. In this context, France has committed to increase its climate financing in developing countries from 3 billion euros in 2015 to 5 billion euros in 2020, including an increase in adjustment funding to 1 billion euros per year, compared to an average of 400 million euros for the period 2010-2015.
This will be linked to the 4 billion euro increase in annual loans from the French Development Agency (AFD) and the increase in grants of almost 400 million euros in 2020 compared to 2015. Added to these funding problems is the fact that the gap between what is needed and what is available continues to widen each year. The euphoria of Paris has since dissipated, as it turned out that the promised money would cover only a fraction of the real cost of combating climate change. Containment alone will cost developing countries $600 billion a year. The initial commitment of the Paris Agreement can only cover the $60 to $100 billion a year needed for the IPCC`s proposed adaptation measures. And fulfilling this initial promise is far from certain. With initial commitments of $10.3 billion for the period 2015-2018, France was the fifth largest contributor to the Fund (774 million euros). Nevertheless, there is little indication that the $100 billion commitment will be met, but there are ambiguous objectives alone. The U.S. exit from the Paris Agreement has cast a long shadow over the commitments made by industrialized countries to developing countries.
Australia`s recent decision to end its own contributions to the Green Climate Fund is the most recent disappointment. COP26 will begin discussions on setting the next climate change target within the framework of the UNFCCC. In this context, it is important to note that the IPCC has estimated that investments of $3.5 trillion would be needed to reduce greenhouse gas emissions and keep warming below 1.5 degrees Celsius. A UNEP report estimates that between $70 billion and $500 billion are for adjustment in developing countries. An OECD report has shown that efforts need to be stepped up if developed countries plan to deliver on their pledge to make $100 billion a year available to the global South from 2020.