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During the 15th Conference of Parties (COP) by the United Nations Framework Convention on Climate Change (UNFCCC) secretariat in 2009, wealthy nations committed to investing USD $100 billion per year in climate change adaptation and mitigation efforts by 2020. At COP21 in Paris 2015, this agreement was extended until 2025, a move praised for its efforts to help poorer nations mobilize climate action. 

However, in reality, climate funding lagged behind the $100 bn goal, only reaching $83.3 billion in the year 2020, a failure that has loomed over climate conferences since. While conversations of climate financing and justice have made progress in international forums like COP27, the failure to reach $100 bn illustrates some of the common pitfalls climate financing falls into, and the changes needed in order to pursue climate justice through international forums. 

What is Climate Justice?

Climate justice is a concept originating largely from activists in countries with lower to middle incomes who have been historically marginalized in international forums. It urges us to look at climate change not solely through the lens of emissions, but as a human rights issue. This seems intuitive considering that climate change impacts things like rights to security, housing, food, and health. However, talks of climate justice are relatively new, with prior international forums like the UNFCCC not adequately addressing the human impacts of climate change. 

Concepts of justice also urge us to consider how countries with high historic emissions, many of whom amassed their wealth due to their use of fossil fuels, should bear a greater responsibility for mitigation efforts. For instance, the world’s highest-income countries are responsible for 44% of post-industrial CO2 emissions despite only making up 14% of the population. While countries like India and China are now some of the world’s highest net polluters, their historic emissions and emissions per capita lag behind many historically wealthy countries.


On the other end, countries that have contributed the least to global emissions are more likely to be the most impacted by climate change. The World Economic Forum predicts that 132 million people will be pushed into extreme poverty from climate change by 2030 from natural disasters destroying homes, livestock, and crops, with negative impacts being disproportionately skewed towards poorer nations and marginalized peoples. 

Some of this is due to geographic warming differences. Extreme heat-related disasters will most significantly impact countries in the Middle East and Africa around the equator, increasing risks of heat-related deaths and other health detriments. Countries near the tropics, particularly smaller island states in Asia, are most at risk of rising sea levels. 

Furthermore, poverty worsens the impacts of climate change. A lack of infrastructure, like air conditioning availability and limited access to hospitals, needed to deal with extreme weather events like heat waves and food scarcity spurs climate-related migration and displacement. These issues are not as common in wealthier countries, which have the economic means to develop recovery policies. 

Climate justice also stresses the importance of a ‘just transition.’ A just transition mandates that communities are supported in the shift to a greener economy, a change which requires a great deal of a country’ resources. Demands for a rapid transition from fossil fuels, which necessitate large-scale investments, have major impacts on countries that have to choose between funding for climate adaptation versus basic services for citizens—a choice industrialized countries do not generally face.

Climate Financing in Pursuit of Climate Justice

Climate financing attempts to meet some of these demands, providing the necessary resources for transitions away from fossil fuels. It is funding, either public or private, that attempts to support efforts for mitigating emissions or helping adapt to climate change. Mitigation often involves efforts to reduce greenhouse gas emissions like funding renewable energy, and adaptation often involves efforts like larger-scale infrastructure changes to help countries adapt to the impacts of climate change. 

Wealthier countries contributing to climate financing for poorer countries have become an important pillar of climate agreements like the Paris Agreement (PA). The concept of “common but differentiated responsibilities” was important to the PA, recognizing that while all states had a common responsibility of limiting climate change, the specific responsibilities were unique to states, often dependent on their level of industrialization, historic emissions, and wealth. 

Climate financing is necessary for a global response to climate change, as switching to greener technology requires large-scale investments. However, these investments simply aren’t possible for many countries that have limited economic or technological resources, often having to choose between funding climate initiatives or other important sectors like housing or medicine. For example, African countries which are especially vulnerable to climate shocks due to location and a lack of established infrastructure will have to spend up to five times as much on adaptation rather than healthcare, despite their historically low emissions. The $100 bn agreed to in the PA attempts to address the fact that goals like limiting warming to 2℃ or 1.5℃ require nations to have the resources to do so. 

However, even if nations had reached $100 bn, the amount is widely recognized to be insufficient for reaching international goals and preventing climate disasters. Estimates for necessary flows to achieve net zero emissions instead put this number at 4.5 – 5 trillion annually. 

COP27 and the Role of International Forums

COP27 in 2022 brought hopeful progress on the topic of climate financing after the failure of the $100 bn pledge, including a historic decision for a “loss and damage fund” dedicated to helping vulnerable countries respond to climate-related damages. This was particularly significant, as these types of compensatory plans have been historically blocked by richer nations, notably the United States. 

Compared to a past where climate justice was not even recognized at international forums like the United Nations, the steady increase of climate funding over the past decade has been hopeful for adaptation and mitigation projects. However, the failures of the $100 bn goal illustrate some of the most common problems in the implementation of climate financing initiatives, things that should be prevented as the next COP draws closer. 

The first issue is that the majority of climate financing goes towards mitigation rather than adaptation. While mitigation funding helps reduce greenhouse gasses from being emitted in the first place, adaptation attempts to build the necessary infrastructure for preventing or coping with climate change effects. For instance, funding social safety nets or building storm drains.

The concentration given to mitigation funding is largely practical, as there are many more corporate projects that focus on limiting industrial emission output rather than building robust infrastructure. However, countries will require much more funding to adapt to climate impacts, with the UNEP estimating that adaptation costs in developing countries may reach $155-300 bn by 2030. 

90% of climate financing has historically gone towards mitigation efforts, with much of this funding being given to large corporations rather than the communities most impacted. This has come closer to parity in 2020 with increases in financing for adaptation, reaching 34% of all climate funding. Future climate agreements should attend to goals like those set in Paris, which called for an even balance between adaptation and mitigation funding. 

Another barrier preventing the poorest countries from adapting to climate change is the fact that the majority of climate funding is spent on middle-income countries. In 2016-2018, lower-middle-income countries received an average $28 bn of climate funding, upper-middle-income countries $20 bn, and low-income countries only $5 bn. While climate finance is internationally important, the countries often most in need of financial aid do not receive it to the necessary scale. This is a particular concern with poorer small island states like Haiti, Guam, and Bahrain that lack adequate resources but are most at risk of climate change incidents, particularly rising sea levels. These countries received only 3% of climate financing funds in 2017-2018. 

Technical issues such as adequate monitoring can also prove problematic. Estimates by the UNCTAD place the actual flow of financing in 2020 well below the purported $83.3 billion, and could be as low as $21 bn. This is due to a lack of robust oversight measures to ensure verifiable accounting and to prevent overestimates.

Perhaps the most detrimental factor to climate financing as it is now to pursue climate justice is that up to 70% of money is distributed mostly through loans rather than grants, often non-concessional ones, meaning the loan’s terms are often not any more generous than they would be on the market. Considering that the purpose of climate financing is to provide resources for climate adaptation where they otherwise do not exist, repaying debt is not an easy task. UNCTAD estimates that 60% of low-income countries experience, or are on the verge of experiencing, debt distress. 

Cycles of repayment in the context of economic shocks like COVID-19 and worsening climate impacts, which force the need for additional funding, are toxic for economies and harm the goal of climate adaptation. In the end, debt-distressed nations spend 5 times more on debt repayment than climate adaptation annually.

Potential Pathways for Climate Finance Success 

The failure of the $100 bn goal reminds us that while ambitious plans like those agreed to at COP27 are important to fund initial efforts to mitigate and adapt, the structure of climate financing needs to change in order to begin successfully pursuing climate justice.

One pathway for more impactful results is to increase the voices of less industrialized countries, through both diplomats and activists, in climate discussions. The domination of Western and wealthy states in international forums often results in the needs of poorer countries being ignored. This was the case during COP15, where the Copenhagen Accord was led by a small group of countries (Brazil, South Africa, India and China taking the lead) with very minimal input from poorer nations. In the end, the results were non-binding and low-ambition climate targets, preventing emissions declines, which harms Global South countries the most. Political economist Dr. Keston Perry suggests that a similar outcome happened in Paris, where discussions were dominated by industrialized nations that led to the insufficiently ambitious $100 bn goal. 

Importantly, debt forgiveness and lenience also need to be considered. At a minimum, there should be more favourable terms given to climate financing loans, like lower rates or prolonged periods for return. UNCTAD suggests a system of temporary debt standstills for cases of significant climate disaster, so that a nation can focus on achieving their other economic, social, and survival needs rather than repayment. 

Ideally, this also exists as a move to grant-based rather than loan-based funding, in order to help sever the cycle between debt repayment and financial stress that contribute to fewer resources for climate adaptation. As the rate of climate disasters grows, this is especially important as countries will need to increase borrowing after a shock. While wealthier nations have the economic means to implement measures to protect their citizens against global shocks like pandemics or wars, nations with no other choice but to borrow need the additional leeway. 

These initiatives aid countries most at risk for climate disaster, but are also internationally important for addressing the borderless concern of climate change. Without the necessary funds for climate action, crises cannot be averted. Climate justice reminds us that addressing climate change means recognizing the historic inequalities that lead to huge present-day gaps, and that costs of adaptation are not equal.

Edited by Chelsea Bean

Helen Guan

Helen (she/her) is a third-year student studying political science at the University of British Columbia. Originally from China but immigrating to Vancouver, Canada at a young age, she is particularly...