The blueprint for climate and biodiversity funding may be established with unity rather than conflict

 The blueprint for climate and biodiversity funding may be established with unity rather than conflict

While the World Bank's planned Loss and Damage Fund is commendable, it shouldn't be the only source of funding for climate change initiatives.

It is becoming harder to keep the increase in global temperature at 1.5°C above pre-industrial levels because of natural unbalances, environmental risks brought on by climate change, and biodiversity loss. Efforts will be made more difficult by stark differences in national stances toward financing for climate change adaptation and mitigation.

At the UN Transitional Committee meeting on November 6 in Abu Dhabi, United Arab Emirates, the divisions among nations were clearly visible. The committee suggested adopting a modified Loss and Damage Fund agreement at the next UN climate change conference (UNFCCC COP 28).

The World Bank will serve as the host organization for the Loss and Damage Fund, under the plan. After being approved by almost 200 COP28 participating countries, the fund will act as a financial bridge for a four-year interim.

Developed countries will pay voluntarily to the fund; they will not be coerced into making a contribution. Responses to the plan have been conflicting. Developing nations have raised concern about the fund's unannounced size.

Extra Careful Estimate

Opponents have pointed out that the World Bank houses the Loss and Damage fund, which hasn't been suggested as a stand-alone fund. Many nations would never have hoped to accept a compromise since, according to others, this fund would have made it more difficult for them to achieve their demands for climate adaptation.

At the 27th COP Summit, which took place in Sharm-el-Sheikh, Egypt, in 2022, the aforementioned Loss and Damage Fund was launched in order to support nations that are more susceptible to the negative consequences of climate change. In a similar vein, other biodiversity-related agreements were made during the 15th Conference of Parties to the Convention on Biodiversity (CBD), which took place in Montreal in December 2022.

According to a UN projection, by 2030 the annual cost of loss and damage in developing nations might reach $580 billion. The effects of climate change might force an additional 132 million people into poverty by this year. Given that it was obtained before the epidemic, this estimate is by all means cautious.

Regarding financing for biodiversity, it has been proclaimed that a commitment to raise at least $200 billion annually from public and private sources by 2030 is essential to halting and reversing the loss of biodiversity.

The amount of money poor nations need to spend on climate adaptation initiatives and the amount wealthy nations and international financial institutions—like the World Bank—give them differ significantly.

The damage and losses incurred by poor nations due to the effects of climate change and biodiversity loss will increase as time goes on. This gap is growing with each passing year. Multiple sources of financing are necessary to mitigate the harm caused by biodiversity losses and climate change.

In light of this, CUTS International's campaign on Innovative Finance for Climate and the Planet contends that a variety of creative solutions that may be included into the global financial system are needed.

In order to create a pool of money for the planet's recovery, it is necessary to investigate a global roadmap that makes effective use of tax and non-tax measures from public and commercial sources—but more crucially, from non-governmental sources.

Possible tax solutions include a financial transactions tax, a cess on biodiversity especially climate resilience, and taxes on digital services, air pollutants, and real estate. In addition, novel approaches to non-conventional funding are suggested, including debt-to-nature swaps, blended finance, green bonds, and loans connected to sustainability.

Other Choices

Combining these choices into a single strategy can either assist produce noteworthy results or cause a more serious disaster. While we applaud the World Bank's proposed Loss and Damage Fund, it shouldn't be considered the only source of funding for climate change.

To establish a bouquet of sources, options like co-financing with the private sector and blended finance might be added to the public finance flows. Go Fund Me, a well-known crowdfunding portal, provides evidence that crowdsourcing may be a source of climate money.

But a lot of the more recent international financing organizations that are spearheading massive infrastructure investments—like the Brazil, Russia, India, China, and South Africa (BRICS) Bank including the China-led Asian Infrastructure Investment Bank (AIIB)—do not prioritize sustainability, particularly in light of climate change.

Trade and investment accords still fall far short of encouraging climate action, and the policymaking community continues to function in silos. Conventional trade and investment agreements fail to acknowledge the serious threat posed by climate change. There are discrepancies, overlaps, and holes in the accords signed before to 2010 that support climate action.

Reforming policy frameworks and treaties is only one of the many tasks still to be done since old-generation accords are still in effect. A new generation of sustainable treaties must also be created and approved by nations. Tax changes and the integration of ESG (environmental, social, and governance) factors would also be necessary to promote sustainable development.

In order to leave a cleaner and greener environment for future generations, we are running out of time. Therefore, in order to produce results that are appropriate and timely, nations must put aside their differences and work together.