President Joe Biden’s vow to spend $5.7 billion annually helping developing nations deal with climate change and propel clean energy has disappointed environmental activists who say it falls far short of what the U.S. should be spending.
Biden’s funding pledge, made before a Thursday climate summit with the leaders of 40 nations, would represent a doubling of climate-finance spending during the second half of the Obama administration. But it’s much less than that sought by environmental advocates, who called for funds ranging from $8 billion to $800 billion through 2030.
Financial aid to vulnerable countries has underpinned the Paris climate agreement, after rich nations pledged in 2009 that by 2020 they would collectively devote $100 billion annually to climate finance. So far, they haven’t done that. The U.S., in particular, is woefully behind on meeting former President Barack Obama’s pledge of $3 billion for the United Nations Green Climate Fund, and some environmentalists expected Biden to rectify that by going big on spending.
The new pledge promises $5.7 billion in climate finance annually by 2024, including $1.5 billion specifically earmarked to help other countries adapt to a warming planet.
That doesn’t go far enough, “amounting to little more than a quarter of public climate finance in 2024,” said Joe Thwaites, an associate with the World Resources Institute’s Sustainable Finance Center.
“This is insufficient to address the needs described by vulnerable countries today, and nowhere near the balance with mitigation finance called for in the Paris Agreement,” he said.
Biden cast his planned government spending as a vital complement to private sector investment that will pay dividends by reducing the costs of disasters and avoiding conflicts.
“Meeting this challenge will require financing at an unprecedented scale,” Biden said. “The private sector can’t meet these challenges alone. Governments need to step up and they need to lead.”
And on Thursday, developing nations made clear they want more help.
Indonesia President Joko Widodo said developing countries could consider tougher climate targets, but only if they receive finance and capacity support. Bangladesh Prime Minister Sheikh Hasina renewed her call for rich countries to deliver on their $100 billion goal. And Brazilian President Jair Bolsonaro reiterated his appeal for funding to compensate the environmental benefits delivered by the country’s Amazon rainforest, a major carbon sink.
“There must be fair payment for the environmental services provided by our biomes to the planet at large as a way to recognize the economic nature of environmental conservation activities,” Bolsonaro said through a translator.
Under Biden’s climate finance plan, federal agencies will seek to end international investments in carbon-intensive fossil fuel-based energy projects. The White House also said the U.S. Agency for International Development will release a new climate change strategy in November that will “make investments in climate mitigation and adaptation a top priority.”
Environmentalists said the administration’s efforts didn’t meet the urgency of the climate threat. And they panned a related pledge by the U.S. International Development Finance Corporation, which finances energy projects overseas, to reach net-zero emissions in its investment portfolio by 2040.
While the DFC’s broad-based restrictions on fossil fuel financing are a first for any U.S. institution, they still allow for investments in natural gas infrastructure and other fossil projects, according to an analysis by Friends of the Earth U.S.
“DFC should have taken the opportunity of the climate summit to once and for all end support for all fossil fuels immediately,” said Kate DeAngelis, international financial program manager at Friends of the Earth U.S. “In putting forward a net-zero target, DFC is ignoring the lifetime and lifecycle emissions of its portfolio while putting off real climate action with dangerous and ineffective offsets.”
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