COP28: What Exactly Constitutes Climate Finance? India Seeks Clear Definition

India Friday called on all countries to agree on a common framework for defining what exactly constitutes climate finance.

At a high-level ministerial meeting on climate finance during the UN Climate Change Conference, COP28 in Dubai, Environment Minister Bhupender Yadav said the lack of clarity affects transparency and trust.

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Why India is seeking definition of Climate Finance

"I strongly believe this is the most crucial outcome we should all strive for," Yadav said.

He said that current estimates from the Organisation for Economic Co-operation and Development (OECD) and Oxfam reports (a transnational NGO) vary significantly and create uncertainty about the actual amount of climate finance provided.

OECD estimated about $83 billion provided by developed countries in 2020, while Oxfam's Climate Finance Shadow Report suggests an amount ranging between $21 to $24.5 billion, he said.

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How it will help fight climate change better

Yadav said a clear definition of climate finance should ensure it is climate-specific, additional, grant-based, and provided under highly concessional terms.

He expressed concern over the ¡°paltry resource flow¡± from rich nations to developing countries and said it needs to be scaled up "several times over".

The minister said that not just financial support but also access to crucial technologies like offshore wind and battery storage is essential for developing countries to fulfill their commitments under the United Nations Framework Convention on Climate Change and the Paris Agreement.

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Why climate finance matters

Over the years, billions have been pledged for climate financing, but campaigners have long alleged that the funds never reach the poor nations and those most vulnerable to climate change.

¡°We don¡¯t have the money to adapt to the climate crisis and yet we do not cause the climate crisis, we are least responsible for the climate crisis. So, we're demanding for leaders to put in place adaptation finance,¡± Evelyn Achan, a climate activist from Uganda said.

Observers say a goal for adaptation is likely to be decided at the summit, but as things stand, it¡¯s set to be only a fraction of what some nations are calling for.

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What is adaptation finance gap

At plenary remarks on Wednesday, COP28 President Sultan al-Jaber said adaptation ¡°is a key element of climate action" and urged countries to ¡°consider how we can make real progress to address the adaptation finance gap¡± between what¡¯s been promised and what¡¯s needed.

A UN report found that developing countries need nearly $400 billion per year to prepare for climate change but only $21 billion was given in 2021. The report also said that an additional $194 to $366 billion is needed with every passing year.

Why rich countries are not financing enough

According to Teresa Anderson, the global lead of climate justice at Action Aid International, the negotiations haven¡¯t matched the urgency and pace and type of ambitious commitments we need to see because adaptation money doesn¡¯t give funders a return on investment.

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¡°Rich countries see mitigation action in their own interest. Wherever it happens in the world, it¡¯s going to benefit everyone, even in the global north. Adaptation efforts and finance will only benefit people in the global south," Anderson said. ¡°The only reason they (rich countries) apparently want to give climate finance is if it¡¯s going to help themselves.¡±

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