Vice President Bharrat Jagdeo has stated that the pledge of US$400 million at COP 28 to financially assist countries who are impacted by climate change, cannot account for the gravity of this global issue.
Jagdeo, who made this remark at a press conference held at the Office of the President on Thursday last, said that although the UN Climate Change Conference which is currently ongoing in Dubai, United Arab Emirates, provided opportunities for Guyana to discuss a few matters of national interest, issues such as the importance of climate financing, and forest incentives are still languishing.
On November 30, more than US$400 million in pledges were announced to financially support countries which are adversely affected by climate change, classified as the “loss and damage” fund at the start of the 28th United Nations Climate Change Conference (COP28) in Dubai. The draft resolution on a “loss and damage” fund marked a historic moment for the world’s strategy on climate change.
It is the culmination of a 30-year effort by low and middle-income countries to be compensated by high-income countries for the harm caused by the effects of climate change.
Of 197 countries represented at COP28, the UAE and Germany pledged $100 million each to the fund; other European Union member states have together promised $125 million, and the United Kingdom pledged around $50 million. The United States pledged $17.5 million and Japan $10 million. The fund will be administered from the World Bank in Washington DC, until a more permanent home can be found.
However, the Vice President said he was worried that entrusting these funds with the World Bank would lead to many low-income countries being disenfranchised from the necessary financial resources needed to mitigate the woes of climate change.
“The worst part of it is that the countries who pledged have handed it over to the World Bank which is not suitable for sustaining intermediate climate funds based on its track record,” Jagdeo lamented. “We were very careful of this, from the beginning, we have seen this happen before, we have seen this happen particularly in Glasgow, where the leaders came in for the first two days and after the announcement and high-level speeches were made, they left and the negotiations fell flat.”
He continued “Now just to give you an idea, McKinzie said recently that you needed US$600 billion in adaptation funding per year. We are about 120th of that amount globally and that is what it will take for climate adaptation. Now considering US$400 million, that is the difference in magnitude although that sounds a lot and people are excited about this, many of the international NGOs are saying we have the money which is practically nothing compared to the needs of other countries.”
There were dialogues on the building blocks of a 1.5°C-aligned energy transition and strong support for an ambitious decision on the Global Stocktake at COP28. Additionally, a total of 118 countries pledged last week Saturday to triple global renewable energy capacity by 2030 and double the progress in energy efficiency.
The International Energy Agency and the International Renewable Energy Agency forecasted that to limit warming to 1.5°C, the world requires three times more renewable energy capacity by 2030, or at least 11,000 GW, and must double the global average annual rate of energy efficiency improvements from around 2% to over 4% every year until 2030.
To meet the Paris Agreement goal, the deployment of renewables must be accompanied by a rapid increase in energy efficiency and the phase-down of unabated coal power, which in other words means that there must be a particular ending to the continued investment in unabated new coal-fired power plants, which is incompatible with efforts to limit warming to 1.5°C.
With regard to this, Jagdeo asked how can renewable energy be tripled when there is a conflict between fossil fuel producers and lobbyists for ending fossil fuel production. He also highlighted that there are no incentives or mechanisms in place to achieve this.
“The second element has tripled renewable energy by 2030 now it would take per annum $2.7 trillion to achieve that now. Where is the money? The problem is that there isn’t enough money for that. There were no provisions for incentives and that is why we are pushing for a carbon price as an incentive to trigger a large exodus of investment away from fossil fuel into renewable energy and the incentives to invest in it,” Jagdeo contended.
“The carbon tax or carbon trade is nowhere near to being agreed at COP 28 so it is another pledge to triple renewable energy, but how can we achieve it when some companies said they will end flaring by 2030? By the way, we have a zero-flaring policy in Guyana but some global oil and gas companies said that they will end that by 2030.
“There is no means of enforcement, these are just voluntary pledges. We saw a lot of pledges but they are not grounded nor anchored in the core United Nations Framework Convention on Climate Change (UNFCCC) agreement and so that is why they are not going to be measured as significant.”
The outcome of COP 26 in Glasgow, Scotland, marked a breakthrough in finalising these rules and opening up the promise of carbon markets.
Jagdeo noted that climate financing is needed for mitigation because large-scale investments are required to significantly reduce emissions. According to him, this mechanism is equally important for adaptation, as significant financial resources are needed to adapt to the adverse effects and reduce the impacts of a changing climate.
The Paris Agreement reaffirmed the obligations of developed countries, while for the first time also encouraging voluntary contributions by other parties. Through this mechanism, a company in one country can reduce emissions in that country and have those reductions credited so that it can sell them to another company in another country. The agreement recommended that parties should also continue to take the lead in mobilising climate finance from a wide variety of sources, instruments, and channels, noting the significant role of public funds, through a variety of actions, including supporting country-driven strategies, and taking into account the needs and priorities of developing countries.
That second company may use them to comply with its emission reduction obligations or to help it meet net zero.
Against this background, Jagdeo believes that it is important for all governments and stakeholders to understand and assess the financial needs of developing countries, as well as understand how these financial resources can be mobilised.
He noted that the provision of resources should also aim to achieve a balance between adaptation and mitigation
