The World's 450 multilateral development banks have jointly pledged to “support the transformation of the global economy and societies towards sustainable and resilient development”. At a first "Finance in Common" Summit, the banks reaffirmed the need to respond to the impacts of COVID-19 and work cooperatively in order to deliver provide the support in each and every country, across the globe.
The 12 November declaration will require an important and necessary shift in strategies, investment patterns, and operating mechanisms so that financing and investment activities align to achieve the SDGs and the Paris Climate Agreement objectives and to support the green recovery in poor countries.
A virtual summit was held in lieu of the meeting originally scheduled for the same day and time that COP 26 would have occurred in Glasgow, Scotland, a Convention now postponed to November 2021.
In advance of the meeting a number of research projects drew to a conclusion, including those from WaterAid and ODI, and the UN International Fund for Agricultural Development (IFAD) and Climate Policy Initiative.
In 2009, at the UN climate talks, member countries pledged a total of $100 Billion USD in climate finance and developing countries agreed to curtail greenhouse gas emissions in order to access this assistance. The OECD calculates that by 2018, financing had reached $79 Billion USD, falling far short of the commitment. An estimated 70 Percent of the total went to reducing emissions, while only 21 Percent was allocated for climate adaptation.
Water, in particular, is a crucial issue, as the impacts of extreme weather are felt in droughts, floods and other threats to water supplies.
A new report from WaterAid and Overseas Development Institute (ODI) reveals that only about 1 Percent of this funding goes to protecting and providing water for vulnerable communities. The report, released ahead of the meeting, details the climate finance requirements and suggests how and where donors and national governments should re-priortise climate investment.
This assessment reiterates that two billion people across the world do not have access to safe and reliable water supply. These populations are more vulnerable to the impacts of increasingly severe and frequent droughts, floods and extreme weather events. Investment is needed to build resilience.
The report found that only 10 Percent of the climate-related finance allocated for water programmes goes to projects that provide water, toilets and good hygiene services. In some countries for those facing the climate-caused floods, droughts and disease, the allocation is as low as $1 per person per year.
Jonathan Farr, Senior Policy Analyst for Climate Change at WaterAid, said: “This report shows us that the world is not responding to the climate crisis by prioritising the most vulnerable. Instead, the poorest communities, those on the front lines of climate change who are already feeling the impacts, are being left to pick up the bill themselves.
“We must meet this injustice with urgent and significant action on a global scale, and provide everyone, everywhere with the tools they need to combat the growing threat of climate change.”
Separately, the UN International Fund for Agricultural Development (IFAD) and think-tank Climate Policy Initiative (CPI) report that less than 2 Percent of climate-related finance goes to support small-scale farmers in developing nations, despite their crucial role in feeding billions of people and the increasing vulnerability to weather extremes.
Again, this is considered "a small fraction" of the hundreds of billions of dollars needed annually to provide farmers with adequate programmes to build resilience to climate change. The report estimates that small farmers require about $240 Billion USD per year for expenses on their land and at home.
Rising temperatures, erratic weather and disasters, including more frequent droughts and floods, destroy crops and livestock on many such farms and lead to displacement and climate migration.
IFAD has called on both governments and private investors to channel more money to these farmers so they can adapt to weather shifts at the same time as curbing planet-warming emissions. In addition, IFAD suggests that agribusiness companies need additional financing to invest in technology and transport to reach remote farmers.
Ahead of the summit, 13 public banks from sub-Saharan Africa, Asia and Latin America, as well as IFAD and regional credit associations, committed to increase their investment in food and agriculture, including to small farmers who are also struggling due to the coronavirus pandemic. In addition, the Green Climate Fund approved two UN-led projects totalling almost $270 Million USD to help small farmers in Guatemala and Brazil.
Jonathan Farr, of WaterAid, points out that water in particular is a crucial issue:
“We are calling on public development banks to support a package of essential public services, including ensuring access to water, sanitation and hygiene services. This will enable developing countries to be so much more resilient to all sorts of crises, both now and in the future.
“We must support the three billion people who are facing down a pandemic without access to the water and soap they need to wash their hands, and the two billion who don’t have access to safely managed drinking water and are under threat from the droughts, floods and extreme weather caused by climate change.”