Climate policy is a constant struggle for every tenth of a degree of global warming prevented – and for billions of US dollars. Today, the donor countries of the UN Green Climate Fund are meeting in the German city of Bonn to announce their new contributions to the fund. China will not be there. The largest CO2 emitter is refraining from climate financing at the UN level for many reasons. The People’s Republic wanted to provide billions of dollars through its own channels, but so far, only a fraction of the promised sums have been disbursed. Nevertheless, experts say the People’s Republic is in a good negotiating position at COP28.
Pressure on China and other major emitters is mounting in the meantime. Yesterday, the new EU Climate Commissioner Wopke Hoekstra, approved by the EU Environment Committee, urges China, the US, but also the United Arab Emirates to make a greater contribution to international climate financing. Hoekstra promised to lobby worldwide for an expansion of carbon pricing and a global aviation tax.
Funds from such a tax could also benefit Nigeria. The West African state finances itself primarily through oil exports. Now, Nigeria has established a gas ministry to drive economic development with additional fossil revenues. A fossil fuel phase-out is only possible with sufficient climate financing, say high-ranking politicians. So we’ve come full circle: At COP28, any successes for the climate will once again depend on money.
A lot of money is at stake today in Bonn: The donor countries of the UN Green Climate Fund are gathering in the former federal capital to announce their contributions to the climate fund for the next four years. Some states, such as Germany, have already disclosed their pledges (two billion euros).
China has not yet participated in this fund and has not announced any plans to do so. On the contrary, the People’s Republic has so far refused to make its own contributions to the financing of climate action, adaptation or climate damage reduction within the UN framework. According to UN definitions, the world’s second-largest economy and by far the largest CO2 emitter is classified as a so-called Non-Annex-I country – mostly developing countries.
This classification was made by the UN in 1992. According to UN statutes, China is not required to participate in international climate financing, even though the country has since experienced an unprecedented economic boom: Per capita, economic power is 34 times higher than in 1992, and the state has accumulated trillions in currency reserves.
What China contributes to climate financing is, therefore, voluntary and is distributed through channels controlled by China. The Asian Infrastructure Investment Bank (AIIB), led by China, announced at the end of September that it would triple its climate financing to at least 7 billion dollars annually by 2030. However, experts criticize China for not keeping its promises. While there have been bold announcements, only relatively small amounts have been paid out so far, and the payments are marked by significant opacity.
According to various studies, China provided between 14 billion and 17 billion dollars in climate financing from 2000 to 2017, according to researcher Nicolas Lippolis of the University of Oxford. The think tank E3G also criticizes the low level of Chinese climate financing. Since the launch of the “Belt and Road Initiative” in 2013, climate financing has averaged 1.4 billion dollars per year. However, it accounts for only two percent of China’s development financing. By comparison, according to government figures, Germany provided 6.3 billion dollars for climate financing in 2022.
Furthermore, China, like some Western countries, announces more than it actually pays. In 2015, the People’s Republic pledged 3.1 billion dollars for the “China South-South Climate Cooperation Fund”. According to E3G research, less than ten percent of this money, 286 million dollars, had been disbursed by the end of 2022.
Most of China’s money is also granted on “commercial terms”, according to Lippolis – partner countries rarely receive concessional loans. The fact that a large part of global climate financing – regardless of China – is provided in the form of loans also contributes to the debt problems of many Global South countries.
China’s initiatives in climate financing are dominated by bilateral, regional, and international partnerships, according to E3G. However, many of these projects and programs are characterized by a lack of transparency. E3G criticizes, for example, that “information on financial commitments and the implementation of projects under regional initiatives is sparse and vague.” Unlike other donor nations, China does not disclose whether a development financing measure is aligned with environmental or climate goals, writes Oxford researcher Lippolis. This further restricts transparency.
If China were to participate in climate financing within the UN framework, the country would have to accept greater transparency and would have less control over the use of the funds. “The main reason why China does not participate in UN climate funds is likely to be a fundamental one: For China, it is a strategic priority not to lose its status as a ‘developing country,’” says Martin Voß, climate diplomacy and cooperation officer at the environmental and development organization Germanwatch.
It is in “China’s geopolitical interest” to continue negotiating within the UN context with the group of developing countries (Group of 77), says Voss. However, “many developing countries expect more from China in compensating other developing countries,” says Gørild Heggelund, China expert at the Fridtjof Nansen Institute in Oslo. Expectations for China to increase climate financing are growing, says Heggelund.
In climate diplomacy, discussions are already underway about a financial target for the period after 2025, the so-called New Collective Quantified Goal (NCQG). Likewise, the fund for losses and damages caused by climate change, created at COP27, must be filled. After 2025, donor countries will probably have to spend larger sums than 100 billion dollars, which is the annual target until 2025. This greater need for funds could deter China from participating in UN funds. The NCQG is part of the Paris Climate Agreement, says Voss. Accordingly, China and other major emerging countries would only have to participate voluntarily.
However, classic developed countries are pushing for China and other states to be obligated to pay into the NCQG, explains Voss. And in the future, China could also come under more pressure regarding the loss and damage fund. It does not fall under Article 9 of the Paris Climate Agreement, says Voss, so China’s status as a developing country does not protect it from participation.
With regard to the upcoming climate conference at the end of the year (COP28), Voss expects “no major concessions” from China. The People’s Republic is “in a comfortable negotiating position” and can point out that it has no payment obligations and that other states are not fully meeting their commitments. Voss also assumes that the United States “will not contribute more to climate financing than before, even if an ambitious NCQG were to be adopted.” This plays into China’s hands.
Byford Tsang of the E3G think tank says with regard to COP28: “The Chinese government should increase its funding for developing countries to help them adapt to climate change and strengthen their resilience to its effects.” China could present a “clear roadmap for the provision of the promised 3.1 billion dollars,” support the reform of multilateral development banks, or jointly with the COP host to “develop new and innovative financing sources based on a voluntary basis, such as independent climate investment funds outside the UNFCCC system.”
The creation of a new “Ministry of Gas Resources” has sparked a debate in Nigeria about the country’s climate policy. The government stresses the potential economic advantages of using domestic natural gas and sees this as strengthening the planned energy transition. Critics, on the other hand, see the country’s climate goals at risk and fear the new ministry will lead to less commitment to renewables.
President Bola Tinubu created the “Ministry of Gas Resources” as part of the newly added ten ministries for his cabinet to promote economic development. Like the Ministry of Petroleum Resources, the ministry is closely supervised by President Bola Tinubu. But both ministries have a “minister of state” who reports to the president and sits at the cabinet table like other ministers.
The new Minister of State for Gas, Ekperikpe Ekpo, said the creation of the new ministry indicates that the president is poised to explore Nigeria’s rich resources to benefit the nation’s economy beyond crude oil. “The result will help ameliorate the economic hardships Nigerians are experiencing, to the extent that businesses will be created, employment opportunities will be available for Nigerians, energy will be available, and of course, the benefits will be enormous for all,” Ekpo said.
However, critics fear that the new ministry will make decarbonization in Nigeria more difficult. They argue that the special focus on the gas industry and its extraction hinders the development of clean energy alternatives. The debate shows the complicated situation of developing countries with fossil reserves: On the one hand, they also contribute to climate change, from which these countries particularly suffer. On the other hand, they generate money for urgently needed economic and social development investments.
Nnimmo Bassey, Executive Director of the Health of Mother Earth Foundation (HOMEF), criticizes the new gas ministry. It justifies CO2 emissions in Nigeria and sets this fossil fuel path for many years to come. However, the resulting climate change would then affect the communities in Nigeria.
Daniel Oladoja, a climate change evangelist, said the perennial issue with Nigeria has been policy somersaults and conflicts, which have often resulted in incoherent strategy. He said this is why the country has a 10-year Climate Action Plan, a climate change act and an Energy Transition Plan (ETP), all promising one thing and a new government policy going in an entirely new direction.
“We are still in the early days of a new administration, and we will need a few more months of data gathering to be able to speak categorically about their climate action plan,” Oladoja told Table.Media. “The current administration seems to have taken a page out of hymnal of the previous government, which bought into and propagated the myth that gas is clean and, as such, should be a transition fuel, but the truth is that gas is not clean and continued investment in gas resources is only going to lengthen our addiction to fossil fuels.”
Nigeria pledged to achieve net zero emissions by 2060. In a bid to strengthen this, the country’s ETP was launched to transform the global energy sector from fossil-based to zero-carbon.
At the African Climate Summit in Nairobi, former Nigerian Vice President Yemi Osinbajo said Africa could not be forced to phase out fossil fuels without the availability of climate finance. He pointed out that Africa must first use its abundant gas resources before it can switch from fossil fuels to renewables: “The truth of the matter is that, if Africa developed at a trajectory as the global north using fossil fuel, no one is ever going to achieve net zero by any target,” adding that investments are needed to make Africa the first truly green civilization. “if we are able to do so, everyone will achieve their net zero objectives.”
Adebayo Jogunsinmi, head of investment and strategy at consulting firm International Energy Services, says Nigeria’s pledge to achieve net zero greenhouse gas emissions by 2060 is a long-term strategy, even if it is still in its infancy. At the same time, Nigeria is meeting international demand, including from Europe, which itself strives to achieve net zero, he said. Regarding the strategy to wean fossil fuel, he said the Nigerian government has embarked on initiatives to cultivate renewable energy sources, such as solar power, in several states nationwide, particularly in areas not integrated into the national power grid.
To achieve net zero in 2060, Nigeria has declared the current decade the “Decade of Natural Gas.” The goal: Using abundant domestic gas to promote economic growth and national development. As natural gas burns the cleanest of all fossil fuels, it is considered a “bridging technology” for the energy transition towards net zero emissions – a perspective that the EU also emphasizes. However, other studies show that the gas industry can heat up the earth’s atmosphere in the short term in a similar way to coal, mainly through methane emissions.
Commotion was high in the summer of 2022 – a population of Asian tiger mosquitoes was discovered in a community garden in Berlin, which were already found the year before. The Senate administration reported evidence of successful overwintering and that a permanent colonization was to be feared. This makes Berlin the northernmost German region where the species has so far been officially detected.
Asian tiger mosquitoes are an invasive species capable of transmitting tropical diseases such as dengue and chikungunya fever. Climate change allows them to spread further and further north in Europe. This also increases the risk of diseases.
Currently, the number of cases is low – last year, only 71 locally transmitted cases of dengue fever were reported in Europe. But this calm could be deceptive. Experts warn that Europe is unprepared for a possible wave of tropical disease infections. The European Environment Agency (EEA) warns that awareness of such health risks posed by climate change is only slowly emerging.
These “infectious diseases have epidemic potential,” Jan Semenza told Table.Media. Until recently, Semenza worked at the European Centre for Disease Prevention and Control (ECDC) in Stockholm and has researched the connection between climate change and infectious diseases for decades. In the event of an outbreak, the number of cases could explode at a rapid rate. “Obviously, we are not doing enough in Europe to prevent this, as the COVID pandemic has shown,” Semenza adds.
Eline Vanuytrecht, who works at the EEA on the intersection of climate change and health, warns that while the risks of heat have been recognized, awareness of the links between infectious diseases and climate change is only slowly emerging.
Yet several aspects of climate change cause infectious diseases to spread faster, Vanuytrecht told Table.Media. The main factors are:
“Climate change alone is not responsible for more diseases, but rather the interplay of various aspects,” says expert Vanuytrecht. Social factors and behavioral patterns, such as hygiene and travel behavior, also play a role.
Three main groups of infectious diseases interact with the effects of climate change and may become more dangerous as a result. The German Robert Koch Institute discusses them in detail in the first part of its status report on climate change and health.
According to the Robert Koch Institute, around two-thirds of pathogens are climate-sensitive. The most common vector-borne disease is Lyme disease, transmitted by ticks. Estimates put the number of infections in Europe at 65,000 per year. There are no exact figures because the disease does not have to be reported everywhere. In recent years, tick risk areas have spread further north.
The Asian tiger mosquito receives considerable attention. It was brought to Europe and transmits, for example, dengue fever. Worldwide, around 400 million people contract dengue fever every year, with 40,000 fatalities. Dengue cases have increased dramatically in tropical and subtropical countries over the past 30 years, and cases outside these regions are also on the rise.
But Jan Semenza believes that the West Nile virus, which is transmitted by mosquitoes to birds and then occasionally to humans, also poses a serious threat. For instance, 1,113 West Nile virus cases were reported in Europe last year, with 92 deaths. What is particularly alarming is that up to 80 percent of infected cases are asymptomatic, which means there is a high risk of the virus being passed on through blood donations. In contrast, the danger of malaria spreading in Europe under warmer conditions is low: Higher temperatures alone are not enough.
But countries are not defenseless against infectious diseases. There are ways of prevention. Experts agree on the importance of monitoring and early-warning systems. Jan Semenza explains, for example, how the ECDC uses satellites to monitor Vibrio activity in the Baltic Sea – it tends to increase with higher temperatures. Countries are informed to issue warnings or close beaches whenever activity is high. In Germany, for example, vulnerable groups were warned against swimming in the Baltic Sea in 2018. At least risk groups should receive available vaccines against diseases such as TBE or dengue fever.
In addition, an awareness of the diseases must be raised, says Vanuytrecht. She cites the German mosquito atlas as a good example, where private individuals map mosquito areas. The Czech Republic also has an excellent monitoring system that allows the population to track the activity of ticks. Vanuytrecht also points out that some climate adaptation measures could clash with the prevention of infectious diseases: For instance, increased blue infrastructure, such as ponds and waterways, may provide breeding grounds for mosquitoes. Therefore, climate adaptation measures must be well considered to avoid “maladaptation.”
California has once again lived up to its reputation as an environmental and climate action pioneer. In September, the Sacramento parliament passed Senate Bill 253 and Senate Bill 261 by a large majority, with both bills expected to be signed into law by Democratic Governor Gavin Newsom in the near future. They represent the most far-reaching US laws to date regarding the disclosure of greenhouse gas emissions as well as the risks of climate change for companies.
From 2026 onwards, the Climate Corporate Data Accountability Act (SB-253) obliges all companies active in California with an annual revenue of over 1 billion US dollars to report their annual carbon emissions. This includes the direct and indirect emissions (Scope 1 and 2) generated by companies and emissions emitted along the value chain (Scope 3). The report must be certified by an independent auditor.
A second bill, entitled Greenhouse Gases: Climate-related Risk (SB-261), requires California-based companies with annual revenues of more than 500 million US dollars to submit biennial reports, starting in January 2026, disclosing climate-related financial risks, such as hazards to production facilities, and outlining measures for minimizing them, such as resilient value chains. These reports must be made public on company websites.
So far, the USA has no legally mandated disclosure requirements for carbon emissions. However, many stock exchange-listed companies provide voluntary reports based on the 1998 Greenhouse Gas Protocol. The classification of greenhouse gas emissions into Scope 1, 2 and 3 also goes back to the GHG Protocol. It is considered the most commonly used standard worldwide for compiling greenhouse gas balances.
Meanwhile, a US-wide government regulation on the disclosure of companies’ carbon footprint is still pending. The responsible regulatory authority in Washington, the Securities and Exchange Commission (SEC), had submitted a proposal for listed companies in March 2022. Three months later, the public consultation process ended. At the turn of 2022/23, the final guideline was supposed to be available. However, the public and companies have been awaiting progress ever since.
After more than a year, the final version is still not available. The reason: The SEC is playing for time. Behind the scenes, there is still a dispute about how far the reporting requirements should actually go. “Really important issues have been raised around Scope 3,” SEC head Gary Gensler said mid-September at a hearing before the US Senate Banking Committee. “We’re going to have to think about what to do with so-called Scope 3.”
California has now directly intervened in this process with its initiative by setting a kind of national standard. If California were a nation-state, it would not only be the world’s fifth largest economy with a GDP of around 3.6 trillion US dollars but also the economically strongest US state. More than 5,000 large US companies, whether listed or not, have branches in the state and are thus subject to SB-253 and SB-261 regulations. This also applies to corporations headquartered overseas, for example, in Europe.
But not just SB-253 and SB-261 have drawn national attention in recent weeks. At least as much attention has been paid to the civil lawsuit filed by the state of California against five of the world’s largest oil and gas companies. The 135-page complaint to the State Superior Court in San Francisco accuses ExxonMobil, Shell, Chevron, Conoco Phillips, BP and the lobby organization The American Petroleum Institute of deliberately misleading the public about the dangers of fossil fuels.
“For more than 50 years, Big Oil has been lying to us – covering up the fact that they’ve long known how dangerous the fossil fuels they produce are for our planet,” a statement from Governor Newsom reads.
According to the complaint, the scientists of the named companies have been aware of the severe effects of burning fossil fuels on the climate since the 1950s. Instead of acting accordingly, however, they allegedly launched a disinformation campaign in the 1970s at the latest to discredit the scientific discussion on climate change and its risks.
The complaint accuses the companies of, among other things, causing or contributing to climate change in California, false advertising, damaging natural resources and deceiving the public about climate change through illegal business practices.
“Wildfires wiping out entire communities, toxic smoke clogging our air, deadly heat waves, record-breaking droughts parching our wells. California taxpayers shouldn’t have to foot the bill,” Newsom said.
After a record summer, new figures also show a global heat record for September 2023. September temperatures were 0.5 degrees above the previous September peak set in 2020. A jump of this magnitude is unprecedented, says climate scientist Zeke Hausfather. “Climate scientists are running out of superlatives to describe 2023,” Hausfather tells Bloomberg.
The considerable temperature rise is caused by global climate change. However, this year also saw exceptional effects due to the weather phenomenon El Niño. For this reason, the following September will probably not be as extreme, Hausfather speculates. Nevertheless, September 2023 is a “sneak peek” of what September will regularly feel like in the near future. nib
Amid an escalating climate emergency and a global debt crisis, calls for a new “fit for climate” global financial architecture are growing louder throughout the developing world. The urgent need for decisive action has been underscored by Barbadian Prime Minister Mia Mottley’s Bridgetown Initiative, the V20 group of climate-vulnerable countries, and the recent Paris Summit for a New Global Financing Pact. The Africa Climate Summit in Nairobi last September presented a unique opportunity to promote much-needed measures to support low-income countries in pursuing sustainable growth.
The situation is particularly urgent in Africa. According to recent estimates by the African Development Bank (AfDB), the continent requires 2.8 trillion US dollars in climate financing between 2020 and 2030. But Africa currently receives only 3 percent of global climate finance, of which just 14 percent comes from the private sector. It is worth noting that the continent accounts for 3.8 percent of global greenhouse-gas (GHG) emissions, while the Global North is responsible for 90 percent.
But even though the world’s most vulnerable countries are bearing the brunt of a crisis they did not create, development-related climate financing has actually decreased, as has overall development aid to Africa. Preliminary 2022 figures show that flows of bilateral official development assistance (ODA) from OECD Development Assistance Committee members to Africa totaled 34 billion US dollars last year, a decline of 7.4 percent in real terms compared to 2021. Meanwhile, total private market assets under management surged to 11.7 trillion US dollars in 2022, having increased at an annual rate of nearly 20 percent since 2017.
Given the severity and urgency of the climate crisis, the international community must rally to devise and agree on concrete solutions ahead of November’s United Nations Climate Change Conference (COP28) in Dubai. To build resilience against inevitable climate shocks, we must fully fund the “loss and damage” fund global leaders agreed to establish at last year’s COP27 in Egypt, agree to double funding for adaptation efforts, and apply the “polluter pays” principle to maritime activities.
To reduce GHG emissions and mitigate the worst effects of climate change will require mobilizing financial resources on an unprecedented scale. But the proposals currently circulating among global policymakers lack focus. In the face of the greatest challenge to human survivability, we risk getting trapped, like Sisyphus, in a cycle of futile, incremental actions. In the lead-up to COP28, we must focus on a few essential steps that could spur global climate action and help limit global warming to the internationally agreed target of 1.5° Celsius.
First, we must tackle Africa’s debt problem. The international community must support vulnerable developing countries grappling with debt crises and enable them to invest in climate adaptation, resilience, and sustainable development. To achieve debt sustainability, developing countries must diversify their economies, negotiate debt-restructuring deals, and ensure transparent and accountable governance. Developed countries and global financial institutions, especially the 550 members of the Glasgow Financial Alliance for Net Zero, could support these efforts by providing concessional financing for climate-adaptation policies.
Second, ongoing efforts to reform the system of multilateral development banks, including the World Bank’s “Evolution Roadmap” initiative, could enable MDBs to assist developing countries at the speed and scale necessary to meet global development goals and address challenges such as climate change, energy access, and pandemic preparedness. These reforms should also seek to direct resources toward regional lenders such as the AfDB and the Inter-American Development Bank.
Third, significant investments should be redirected toward the green transition, with a particular focus on expanding climate-vulnerable countries’ access to renewable energy. To this end, African governments could initiate regional programs to harness their natural resources to produce clean energy.
Lastly, the International Development Association, the World Bank’s soft-loan facility, has emerged as a crucial tool capable of delivering the level of support Africa requires. The IDA already serves as Africa’s primary source of concessional financing, and African countries account for 75 percent of IDA commitments totaling 34.2 billion US dollars – or 25.8 billion – in the fiscal year ending June 30, 2023.
Apart from being familiar to and trusted by governments across the continent, the IDA effectively amplifies donor contributions, a particularly valuable feature at a time when donor countries are fiscally constrained. We hope that the G20 and the Paris Summit’s call for an ambitious IDA replenishment will translate into substantial support aimed at addressing the challenges facing beneficiary countries.
Despite the massive challenges ahead, establishing a new climate-ready global financial architecture remains feasible. By working together and ensuring that all countries pay their fair share, the international community could bridge political divides and achieve tangible progress toward ensuring a habitable world.
But to do this, we must maintain the current momentum until we reach our goal: enabling climate-vulnerable countries to achieve sustainable, resilient growth.
Ken Ofori-Atta, Minister of Finance for the Republic of Ghana, is Chair of the V20. Axel van Trotsenburg is Senior Managing Director of Development Policy and Partnerships at the World Bank.
In cooperation with Project Syndicate, 2023.
Climate policy is a constant struggle for every tenth of a degree of global warming prevented – and for billions of US dollars. Today, the donor countries of the UN Green Climate Fund are meeting in the German city of Bonn to announce their new contributions to the fund. China will not be there. The largest CO2 emitter is refraining from climate financing at the UN level for many reasons. The People’s Republic wanted to provide billions of dollars through its own channels, but so far, only a fraction of the promised sums have been disbursed. Nevertheless, experts say the People’s Republic is in a good negotiating position at COP28.
Pressure on China and other major emitters is mounting in the meantime. Yesterday, the new EU Climate Commissioner Wopke Hoekstra, approved by the EU Environment Committee, urges China, the US, but also the United Arab Emirates to make a greater contribution to international climate financing. Hoekstra promised to lobby worldwide for an expansion of carbon pricing and a global aviation tax.
Funds from such a tax could also benefit Nigeria. The West African state finances itself primarily through oil exports. Now, Nigeria has established a gas ministry to drive economic development with additional fossil revenues. A fossil fuel phase-out is only possible with sufficient climate financing, say high-ranking politicians. So we’ve come full circle: At COP28, any successes for the climate will once again depend on money.
A lot of money is at stake today in Bonn: The donor countries of the UN Green Climate Fund are gathering in the former federal capital to announce their contributions to the climate fund for the next four years. Some states, such as Germany, have already disclosed their pledges (two billion euros).
China has not yet participated in this fund and has not announced any plans to do so. On the contrary, the People’s Republic has so far refused to make its own contributions to the financing of climate action, adaptation or climate damage reduction within the UN framework. According to UN definitions, the world’s second-largest economy and by far the largest CO2 emitter is classified as a so-called Non-Annex-I country – mostly developing countries.
This classification was made by the UN in 1992. According to UN statutes, China is not required to participate in international climate financing, even though the country has since experienced an unprecedented economic boom: Per capita, economic power is 34 times higher than in 1992, and the state has accumulated trillions in currency reserves.
What China contributes to climate financing is, therefore, voluntary and is distributed through channels controlled by China. The Asian Infrastructure Investment Bank (AIIB), led by China, announced at the end of September that it would triple its climate financing to at least 7 billion dollars annually by 2030. However, experts criticize China for not keeping its promises. While there have been bold announcements, only relatively small amounts have been paid out so far, and the payments are marked by significant opacity.
According to various studies, China provided between 14 billion and 17 billion dollars in climate financing from 2000 to 2017, according to researcher Nicolas Lippolis of the University of Oxford. The think tank E3G also criticizes the low level of Chinese climate financing. Since the launch of the “Belt and Road Initiative” in 2013, climate financing has averaged 1.4 billion dollars per year. However, it accounts for only two percent of China’s development financing. By comparison, according to government figures, Germany provided 6.3 billion dollars for climate financing in 2022.
Furthermore, China, like some Western countries, announces more than it actually pays. In 2015, the People’s Republic pledged 3.1 billion dollars for the “China South-South Climate Cooperation Fund”. According to E3G research, less than ten percent of this money, 286 million dollars, had been disbursed by the end of 2022.
Most of China’s money is also granted on “commercial terms”, according to Lippolis – partner countries rarely receive concessional loans. The fact that a large part of global climate financing – regardless of China – is provided in the form of loans also contributes to the debt problems of many Global South countries.
China’s initiatives in climate financing are dominated by bilateral, regional, and international partnerships, according to E3G. However, many of these projects and programs are characterized by a lack of transparency. E3G criticizes, for example, that “information on financial commitments and the implementation of projects under regional initiatives is sparse and vague.” Unlike other donor nations, China does not disclose whether a development financing measure is aligned with environmental or climate goals, writes Oxford researcher Lippolis. This further restricts transparency.
If China were to participate in climate financing within the UN framework, the country would have to accept greater transparency and would have less control over the use of the funds. “The main reason why China does not participate in UN climate funds is likely to be a fundamental one: For China, it is a strategic priority not to lose its status as a ‘developing country,’” says Martin Voß, climate diplomacy and cooperation officer at the environmental and development organization Germanwatch.
It is in “China’s geopolitical interest” to continue negotiating within the UN context with the group of developing countries (Group of 77), says Voss. However, “many developing countries expect more from China in compensating other developing countries,” says Gørild Heggelund, China expert at the Fridtjof Nansen Institute in Oslo. Expectations for China to increase climate financing are growing, says Heggelund.
In climate diplomacy, discussions are already underway about a financial target for the period after 2025, the so-called New Collective Quantified Goal (NCQG). Likewise, the fund for losses and damages caused by climate change, created at COP27, must be filled. After 2025, donor countries will probably have to spend larger sums than 100 billion dollars, which is the annual target until 2025. This greater need for funds could deter China from participating in UN funds. The NCQG is part of the Paris Climate Agreement, says Voss. Accordingly, China and other major emerging countries would only have to participate voluntarily.
However, classic developed countries are pushing for China and other states to be obligated to pay into the NCQG, explains Voss. And in the future, China could also come under more pressure regarding the loss and damage fund. It does not fall under Article 9 of the Paris Climate Agreement, says Voss, so China’s status as a developing country does not protect it from participation.
With regard to the upcoming climate conference at the end of the year (COP28), Voss expects “no major concessions” from China. The People’s Republic is “in a comfortable negotiating position” and can point out that it has no payment obligations and that other states are not fully meeting their commitments. Voss also assumes that the United States “will not contribute more to climate financing than before, even if an ambitious NCQG were to be adopted.” This plays into China’s hands.
Byford Tsang of the E3G think tank says with regard to COP28: “The Chinese government should increase its funding for developing countries to help them adapt to climate change and strengthen their resilience to its effects.” China could present a “clear roadmap for the provision of the promised 3.1 billion dollars,” support the reform of multilateral development banks, or jointly with the COP host to “develop new and innovative financing sources based on a voluntary basis, such as independent climate investment funds outside the UNFCCC system.”
The creation of a new “Ministry of Gas Resources” has sparked a debate in Nigeria about the country’s climate policy. The government stresses the potential economic advantages of using domestic natural gas and sees this as strengthening the planned energy transition. Critics, on the other hand, see the country’s climate goals at risk and fear the new ministry will lead to less commitment to renewables.
President Bola Tinubu created the “Ministry of Gas Resources” as part of the newly added ten ministries for his cabinet to promote economic development. Like the Ministry of Petroleum Resources, the ministry is closely supervised by President Bola Tinubu. But both ministries have a “minister of state” who reports to the president and sits at the cabinet table like other ministers.
The new Minister of State for Gas, Ekperikpe Ekpo, said the creation of the new ministry indicates that the president is poised to explore Nigeria’s rich resources to benefit the nation’s economy beyond crude oil. “The result will help ameliorate the economic hardships Nigerians are experiencing, to the extent that businesses will be created, employment opportunities will be available for Nigerians, energy will be available, and of course, the benefits will be enormous for all,” Ekpo said.
However, critics fear that the new ministry will make decarbonization in Nigeria more difficult. They argue that the special focus on the gas industry and its extraction hinders the development of clean energy alternatives. The debate shows the complicated situation of developing countries with fossil reserves: On the one hand, they also contribute to climate change, from which these countries particularly suffer. On the other hand, they generate money for urgently needed economic and social development investments.
Nnimmo Bassey, Executive Director of the Health of Mother Earth Foundation (HOMEF), criticizes the new gas ministry. It justifies CO2 emissions in Nigeria and sets this fossil fuel path for many years to come. However, the resulting climate change would then affect the communities in Nigeria.
Daniel Oladoja, a climate change evangelist, said the perennial issue with Nigeria has been policy somersaults and conflicts, which have often resulted in incoherent strategy. He said this is why the country has a 10-year Climate Action Plan, a climate change act and an Energy Transition Plan (ETP), all promising one thing and a new government policy going in an entirely new direction.
“We are still in the early days of a new administration, and we will need a few more months of data gathering to be able to speak categorically about their climate action plan,” Oladoja told Table.Media. “The current administration seems to have taken a page out of hymnal of the previous government, which bought into and propagated the myth that gas is clean and, as such, should be a transition fuel, but the truth is that gas is not clean and continued investment in gas resources is only going to lengthen our addiction to fossil fuels.”
Nigeria pledged to achieve net zero emissions by 2060. In a bid to strengthen this, the country’s ETP was launched to transform the global energy sector from fossil-based to zero-carbon.
At the African Climate Summit in Nairobi, former Nigerian Vice President Yemi Osinbajo said Africa could not be forced to phase out fossil fuels without the availability of climate finance. He pointed out that Africa must first use its abundant gas resources before it can switch from fossil fuels to renewables: “The truth of the matter is that, if Africa developed at a trajectory as the global north using fossil fuel, no one is ever going to achieve net zero by any target,” adding that investments are needed to make Africa the first truly green civilization. “if we are able to do so, everyone will achieve their net zero objectives.”
Adebayo Jogunsinmi, head of investment and strategy at consulting firm International Energy Services, says Nigeria’s pledge to achieve net zero greenhouse gas emissions by 2060 is a long-term strategy, even if it is still in its infancy. At the same time, Nigeria is meeting international demand, including from Europe, which itself strives to achieve net zero, he said. Regarding the strategy to wean fossil fuel, he said the Nigerian government has embarked on initiatives to cultivate renewable energy sources, such as solar power, in several states nationwide, particularly in areas not integrated into the national power grid.
To achieve net zero in 2060, Nigeria has declared the current decade the “Decade of Natural Gas.” The goal: Using abundant domestic gas to promote economic growth and national development. As natural gas burns the cleanest of all fossil fuels, it is considered a “bridging technology” for the energy transition towards net zero emissions – a perspective that the EU also emphasizes. However, other studies show that the gas industry can heat up the earth’s atmosphere in the short term in a similar way to coal, mainly through methane emissions.
Commotion was high in the summer of 2022 – a population of Asian tiger mosquitoes was discovered in a community garden in Berlin, which were already found the year before. The Senate administration reported evidence of successful overwintering and that a permanent colonization was to be feared. This makes Berlin the northernmost German region where the species has so far been officially detected.
Asian tiger mosquitoes are an invasive species capable of transmitting tropical diseases such as dengue and chikungunya fever. Climate change allows them to spread further and further north in Europe. This also increases the risk of diseases.
Currently, the number of cases is low – last year, only 71 locally transmitted cases of dengue fever were reported in Europe. But this calm could be deceptive. Experts warn that Europe is unprepared for a possible wave of tropical disease infections. The European Environment Agency (EEA) warns that awareness of such health risks posed by climate change is only slowly emerging.
These “infectious diseases have epidemic potential,” Jan Semenza told Table.Media. Until recently, Semenza worked at the European Centre for Disease Prevention and Control (ECDC) in Stockholm and has researched the connection between climate change and infectious diseases for decades. In the event of an outbreak, the number of cases could explode at a rapid rate. “Obviously, we are not doing enough in Europe to prevent this, as the COVID pandemic has shown,” Semenza adds.
Eline Vanuytrecht, who works at the EEA on the intersection of climate change and health, warns that while the risks of heat have been recognized, awareness of the links between infectious diseases and climate change is only slowly emerging.
Yet several aspects of climate change cause infectious diseases to spread faster, Vanuytrecht told Table.Media. The main factors are:
“Climate change alone is not responsible for more diseases, but rather the interplay of various aspects,” says expert Vanuytrecht. Social factors and behavioral patterns, such as hygiene and travel behavior, also play a role.
Three main groups of infectious diseases interact with the effects of climate change and may become more dangerous as a result. The German Robert Koch Institute discusses them in detail in the first part of its status report on climate change and health.
According to the Robert Koch Institute, around two-thirds of pathogens are climate-sensitive. The most common vector-borne disease is Lyme disease, transmitted by ticks. Estimates put the number of infections in Europe at 65,000 per year. There are no exact figures because the disease does not have to be reported everywhere. In recent years, tick risk areas have spread further north.
The Asian tiger mosquito receives considerable attention. It was brought to Europe and transmits, for example, dengue fever. Worldwide, around 400 million people contract dengue fever every year, with 40,000 fatalities. Dengue cases have increased dramatically in tropical and subtropical countries over the past 30 years, and cases outside these regions are also on the rise.
But Jan Semenza believes that the West Nile virus, which is transmitted by mosquitoes to birds and then occasionally to humans, also poses a serious threat. For instance, 1,113 West Nile virus cases were reported in Europe last year, with 92 deaths. What is particularly alarming is that up to 80 percent of infected cases are asymptomatic, which means there is a high risk of the virus being passed on through blood donations. In contrast, the danger of malaria spreading in Europe under warmer conditions is low: Higher temperatures alone are not enough.
But countries are not defenseless against infectious diseases. There are ways of prevention. Experts agree on the importance of monitoring and early-warning systems. Jan Semenza explains, for example, how the ECDC uses satellites to monitor Vibrio activity in the Baltic Sea – it tends to increase with higher temperatures. Countries are informed to issue warnings or close beaches whenever activity is high. In Germany, for example, vulnerable groups were warned against swimming in the Baltic Sea in 2018. At least risk groups should receive available vaccines against diseases such as TBE or dengue fever.
In addition, an awareness of the diseases must be raised, says Vanuytrecht. She cites the German mosquito atlas as a good example, where private individuals map mosquito areas. The Czech Republic also has an excellent monitoring system that allows the population to track the activity of ticks. Vanuytrecht also points out that some climate adaptation measures could clash with the prevention of infectious diseases: For instance, increased blue infrastructure, such as ponds and waterways, may provide breeding grounds for mosquitoes. Therefore, climate adaptation measures must be well considered to avoid “maladaptation.”
California has once again lived up to its reputation as an environmental and climate action pioneer. In September, the Sacramento parliament passed Senate Bill 253 and Senate Bill 261 by a large majority, with both bills expected to be signed into law by Democratic Governor Gavin Newsom in the near future. They represent the most far-reaching US laws to date regarding the disclosure of greenhouse gas emissions as well as the risks of climate change for companies.
From 2026 onwards, the Climate Corporate Data Accountability Act (SB-253) obliges all companies active in California with an annual revenue of over 1 billion US dollars to report their annual carbon emissions. This includes the direct and indirect emissions (Scope 1 and 2) generated by companies and emissions emitted along the value chain (Scope 3). The report must be certified by an independent auditor.
A second bill, entitled Greenhouse Gases: Climate-related Risk (SB-261), requires California-based companies with annual revenues of more than 500 million US dollars to submit biennial reports, starting in January 2026, disclosing climate-related financial risks, such as hazards to production facilities, and outlining measures for minimizing them, such as resilient value chains. These reports must be made public on company websites.
So far, the USA has no legally mandated disclosure requirements for carbon emissions. However, many stock exchange-listed companies provide voluntary reports based on the 1998 Greenhouse Gas Protocol. The classification of greenhouse gas emissions into Scope 1, 2 and 3 also goes back to the GHG Protocol. It is considered the most commonly used standard worldwide for compiling greenhouse gas balances.
Meanwhile, a US-wide government regulation on the disclosure of companies’ carbon footprint is still pending. The responsible regulatory authority in Washington, the Securities and Exchange Commission (SEC), had submitted a proposal for listed companies in March 2022. Three months later, the public consultation process ended. At the turn of 2022/23, the final guideline was supposed to be available. However, the public and companies have been awaiting progress ever since.
After more than a year, the final version is still not available. The reason: The SEC is playing for time. Behind the scenes, there is still a dispute about how far the reporting requirements should actually go. “Really important issues have been raised around Scope 3,” SEC head Gary Gensler said mid-September at a hearing before the US Senate Banking Committee. “We’re going to have to think about what to do with so-called Scope 3.”
California has now directly intervened in this process with its initiative by setting a kind of national standard. If California were a nation-state, it would not only be the world’s fifth largest economy with a GDP of around 3.6 trillion US dollars but also the economically strongest US state. More than 5,000 large US companies, whether listed or not, have branches in the state and are thus subject to SB-253 and SB-261 regulations. This also applies to corporations headquartered overseas, for example, in Europe.
But not just SB-253 and SB-261 have drawn national attention in recent weeks. At least as much attention has been paid to the civil lawsuit filed by the state of California against five of the world’s largest oil and gas companies. The 135-page complaint to the State Superior Court in San Francisco accuses ExxonMobil, Shell, Chevron, Conoco Phillips, BP and the lobby organization The American Petroleum Institute of deliberately misleading the public about the dangers of fossil fuels.
“For more than 50 years, Big Oil has been lying to us – covering up the fact that they’ve long known how dangerous the fossil fuels they produce are for our planet,” a statement from Governor Newsom reads.
According to the complaint, the scientists of the named companies have been aware of the severe effects of burning fossil fuels on the climate since the 1950s. Instead of acting accordingly, however, they allegedly launched a disinformation campaign in the 1970s at the latest to discredit the scientific discussion on climate change and its risks.
The complaint accuses the companies of, among other things, causing or contributing to climate change in California, false advertising, damaging natural resources and deceiving the public about climate change through illegal business practices.
“Wildfires wiping out entire communities, toxic smoke clogging our air, deadly heat waves, record-breaking droughts parching our wells. California taxpayers shouldn’t have to foot the bill,” Newsom said.
After a record summer, new figures also show a global heat record for September 2023. September temperatures were 0.5 degrees above the previous September peak set in 2020. A jump of this magnitude is unprecedented, says climate scientist Zeke Hausfather. “Climate scientists are running out of superlatives to describe 2023,” Hausfather tells Bloomberg.
The considerable temperature rise is caused by global climate change. However, this year also saw exceptional effects due to the weather phenomenon El Niño. For this reason, the following September will probably not be as extreme, Hausfather speculates. Nevertheless, September 2023 is a “sneak peek” of what September will regularly feel like in the near future. nib
Amid an escalating climate emergency and a global debt crisis, calls for a new “fit for climate” global financial architecture are growing louder throughout the developing world. The urgent need for decisive action has been underscored by Barbadian Prime Minister Mia Mottley’s Bridgetown Initiative, the V20 group of climate-vulnerable countries, and the recent Paris Summit for a New Global Financing Pact. The Africa Climate Summit in Nairobi last September presented a unique opportunity to promote much-needed measures to support low-income countries in pursuing sustainable growth.
The situation is particularly urgent in Africa. According to recent estimates by the African Development Bank (AfDB), the continent requires 2.8 trillion US dollars in climate financing between 2020 and 2030. But Africa currently receives only 3 percent of global climate finance, of which just 14 percent comes from the private sector. It is worth noting that the continent accounts for 3.8 percent of global greenhouse-gas (GHG) emissions, while the Global North is responsible for 90 percent.
But even though the world’s most vulnerable countries are bearing the brunt of a crisis they did not create, development-related climate financing has actually decreased, as has overall development aid to Africa. Preliminary 2022 figures show that flows of bilateral official development assistance (ODA) from OECD Development Assistance Committee members to Africa totaled 34 billion US dollars last year, a decline of 7.4 percent in real terms compared to 2021. Meanwhile, total private market assets under management surged to 11.7 trillion US dollars in 2022, having increased at an annual rate of nearly 20 percent since 2017.
Given the severity and urgency of the climate crisis, the international community must rally to devise and agree on concrete solutions ahead of November’s United Nations Climate Change Conference (COP28) in Dubai. To build resilience against inevitable climate shocks, we must fully fund the “loss and damage” fund global leaders agreed to establish at last year’s COP27 in Egypt, agree to double funding for adaptation efforts, and apply the “polluter pays” principle to maritime activities.
To reduce GHG emissions and mitigate the worst effects of climate change will require mobilizing financial resources on an unprecedented scale. But the proposals currently circulating among global policymakers lack focus. In the face of the greatest challenge to human survivability, we risk getting trapped, like Sisyphus, in a cycle of futile, incremental actions. In the lead-up to COP28, we must focus on a few essential steps that could spur global climate action and help limit global warming to the internationally agreed target of 1.5° Celsius.
First, we must tackle Africa’s debt problem. The international community must support vulnerable developing countries grappling with debt crises and enable them to invest in climate adaptation, resilience, and sustainable development. To achieve debt sustainability, developing countries must diversify their economies, negotiate debt-restructuring deals, and ensure transparent and accountable governance. Developed countries and global financial institutions, especially the 550 members of the Glasgow Financial Alliance for Net Zero, could support these efforts by providing concessional financing for climate-adaptation policies.
Second, ongoing efforts to reform the system of multilateral development banks, including the World Bank’s “Evolution Roadmap” initiative, could enable MDBs to assist developing countries at the speed and scale necessary to meet global development goals and address challenges such as climate change, energy access, and pandemic preparedness. These reforms should also seek to direct resources toward regional lenders such as the AfDB and the Inter-American Development Bank.
Third, significant investments should be redirected toward the green transition, with a particular focus on expanding climate-vulnerable countries’ access to renewable energy. To this end, African governments could initiate regional programs to harness their natural resources to produce clean energy.
Lastly, the International Development Association, the World Bank’s soft-loan facility, has emerged as a crucial tool capable of delivering the level of support Africa requires. The IDA already serves as Africa’s primary source of concessional financing, and African countries account for 75 percent of IDA commitments totaling 34.2 billion US dollars – or 25.8 billion – in the fiscal year ending June 30, 2023.
Apart from being familiar to and trusted by governments across the continent, the IDA effectively amplifies donor contributions, a particularly valuable feature at a time when donor countries are fiscally constrained. We hope that the G20 and the Paris Summit’s call for an ambitious IDA replenishment will translate into substantial support aimed at addressing the challenges facing beneficiary countries.
Despite the massive challenges ahead, establishing a new climate-ready global financial architecture remains feasible. By working together and ensuring that all countries pay their fair share, the international community could bridge political divides and achieve tangible progress toward ensuring a habitable world.
But to do this, we must maintain the current momentum until we reach our goal: enabling climate-vulnerable countries to achieve sustainable, resilient growth.
Ken Ofori-Atta, Minister of Finance for the Republic of Ghana, is Chair of the V20. Axel van Trotsenburg is Senior Managing Director of Development Policy and Partnerships at the World Bank.
In cooperation with Project Syndicate, 2023.
