- Speaking at UNGA today, President Biden has announced a new climate finance pledge to double US core climate finance, from $5.7bn to approximately $11-12bn per year.
- According to analysis of current pledges, this new US pledge would put the $100bn within reach. It therefore opens up new space for climate ambition before COP26.
- E3G supports this increase, and now calls for new actions by the US and its allies in the run-up to COP26, to move beyond the $100bn and mobilise trillions, including via MDB recapitalisation and finance mobilisation.
Story – US doubles climate finance
Today’s announcement by President Joe Biden, a redoubling of the doubling to around $11bn-12bn per year, responds to clear pushes from civil society and US allies in recent months.
By putting the $100bn within reach, this announcement helps answer calls for demonstrations of solidarity with climate vulnerable developing countries, as required for success at COP26. The new announcement helps create space over the next five weeks to land the climate action needed before COP26 to keep 1.5 alive: allowing the US to up the pressure on countries’ 2030 emissions reduction pledges and shifting finance out of fossil fuels.
More action is needed, however, to build on this announcement to close the $100bn solidarity gap by COP and work toward scaling beyond the $100bn. The pledge needs to be delivered through US Congress, while being leveraged to shift other finance contributor laggards (e.g. Italy, Australia) to step up. In the weeks that remain before Glasgow, developed countries can pursue practical actions toward scaling financial flows, including toward development bank recapitalisation in the G20, as well as finance mobilisation platforms.
The US must work with German and Canadian ministers who are working on behalf of developed countries to land a credible collective $100bn Delivery Plan before Glasgow. Annual flows well beyond the $100bn are needed from 2022-25 to meet the core demand from climate vulnerable countries of providing for shortfalls in past years by delivering an aggregate of $500bn over five years. The Plan will also need to look beyond scale, aiming to significantly increase annual adaptation finance within the $100bn, while addressing issues of access and quality, notably the need for grants.
According to analyses of needs by the Intergovernmental Panel on Climate Change (IPCC), trillions of dollars per year are needed to deliver the real economy and societal transformation we need this decade. Developed countries collectively must therefore aim to do more to scale financial flows, both for trust and for real economy transformation to keep 1.5 alive.
Claire Healy, Head of E3Gs Washington DC office, said
“There’s a long way to go to rebuild trust in multilateralism but Biden’s announcement today that the US will double its commitment toward the $100 billion international climate finance target is a big step in the right direction. With five weeks left until COP, we’ve got to see countries coming together as never before to leverage higher finance commitments for fairer roll-out of vaccines, faster phase-out of fossil fuels, and deeper cuts in emissions from all major emitters.”
Alden Meyer, E3G Senior Associate, said:
“Delivering on the $100 billion climate finance pledge is one of the keys to success at COP26 in Glasgow, and the higher US commitment put forward by President Biden goes a long way towards achieving that result.
Delivering the $100 billion won’t guarantee success on getting the needed increases in domestic climate ambition in countries such as China and India, but it will definitely help.”
Iskander Erzini Vernoit, E3G Climate Finance Expert, said:
“The new US climate finance pledge will help to close the gap to $100bn, but developed countries have much more to do, to mobilize the trillions needed to keep 1.5 alive in this critical decade.
The collective $100bn Delivery Plan must therefore go beyond climate finance pledges to envision new international architecture for finance mobilisation, with a key role for recapitalised MDBs.”
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Please contact directly:
Claire Healy, Washington DC Director, (Geopolitics, US politics)
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Iskander Erzini Vernoit, E3G Climate Finance expert,
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Alden Meyer, Senior Associate, E3G (COP26, G20, geopolitics, US policy)
m: +1 (202) 378-8619, Alden.Meyer@e3g.org