O climate finance should be the biggest challenge faced by Brazil during COP30according to experts interviewed by CNN Brazil. The term refers to the mobilization of financial resources to help countries – especially those that are still developing – to carry out the energy transition and cover the costs of possible climate disasters.
The idea is not new: since the past decade, nations participating in the COP have recognized the need for financing from rich countries so that developing countries can face the climate crisis with financial support. However, reaching consensus among all participants has proven to be a challenge.
The lack of a robust agreement on climate finance was what caused COP29 to be considered a failure by experts. Negotiators reached a consensus that it should reach US$300 billion per year by 2035, with an expansion trajectory that could reach US$1.3 trillion annually. The origin of these resources, however, has not been properly clarified.
At COP30 in Belém, Brazil has the challenge of not repeating a disappointing conclusion involving the topic.
How important is climate finance
The resources have two main objectives: to enable energy transition for renewable sources in emerging countries and reconstruction of these countries in cases of extreme weather events – without nations being forced to take on high-interest debt after tragedies.
Tatiana Oliveira, leader of International Strategy at WWF-Brazil, highlights that the Paris Agreement provides for the Climate finance as a “climate justice” device: “It refers to an aspect of historical reparation for the pollution that developed countries dumped into the atmosphere for centuries, even before developing countries developed their own industrialization processes.”
“Rich countries and oil companies have already polluted the atmosphere a lot and, therefore, have made a lot of money and have a lot of resources”, adds Carlos Bocuhy, president of the Brazilian Institute for Environmental Protection (Proam). “These countries must strive to help the most vulnerable countries that have not polluted the planet as much.”
Bocuhy also highlights that it is necessary “a high degree of solidarity and economic intelligence” on the part of developed countries to understand the need to provide these financial resources for climate change around the world.
Oliveira agrees: “This support must not be in the form of loans, much less loans with market-based interest. This financing must be predictable, it must be highly concessional, the money must be granted.”
The challenge of consensus
Defining a clear agreement that specifies where the money comes from and how it will be allocated has proven to be a challenge over the last few years. And expectations are high for the meeting taking place in Belém.
“This is the main point that COP30 faces”according to Bocuhy. “COP30 really brings this great mission, this great commitment to financing the future, financing the survival of humanity.”
For Tatiana Oliveira, it is possible to summarize the challenges and discomforts involved in the discussion on climate finance in three main points:
- The agreement clearly illustrates the political and economic asymmetries between the global North and South;
- The ambition of developing countries has grown as more extreme weather events occur every year, increasing the need for more climate-related public policies;
- Developed countries have shown a certain veiled refusal to financially help developing countries, with the pattern of not meeting internationally agreed targets in practice.
“We have great expectations that the [que será discutido na COP30] can present a concrete, feasible path, with clear annual responsibilities and a very transparent process for capturing, executing and allocating these resources, so that we can reach at least US$1.3 trillion annually”, says Oliveira.
Who pays and who receives
There is no division as clear as a list of which countries would be investors or beneficiaries of resources obtained through climate finance.
“In theory, those who should pay are the developed countries, pioneers in the industrialization process and which, therefore, polluted the atmosphere more from a historical perspective and, for this very reason, have this legal and ethical obligation to provide financial support to developing countries”, says Tatiana Oliveira.
“However, we increasingly see the fraying of this clear division about who pays and who receives”, she adds.
This division was one of the central points discussed at COP29, with developed countries wanting to expand the number of donor nations to include developing countries, which reject this responsibility.
Oliveira says that we can expect changes: “In the coming years, we will most likely see a climate finance rearrangementso that all countries contribute in some way to these resources, which must be subsequently distributed to populations most vulnerable to climate change.”
See also: Not every COP is the same, understand the differences between Climate Conferences
