Public climate finance at COP26: still baby steps where a substantial leap is needed

By Ellen Ledger, MA student, PSIA and Carola Klöck, Assistant professor, CERI

Climate finance was at the heart of COP26. In fact, climate finance has been central to the climate talks since the 1992 UN Framework Convention on Climate Change (UNFCCC). Climate finance is, to some extent, a means to build trust between developed and developing countries[1], and a way to acknowledge the enormous and disproportionate contribution to global greenhouse gas emissions of the former, and the enormous and disproportionate effects of those emissions in the latter.

Climate finance is also high on the agenda of Small Island Developing States (SIDS). These are among the least responsible and most vulnerable. Pacific SIDS, for instance, are responsible for only a few tenths of a percent of global greenhouse gas emissions[2], but the costs of the impacts are steadily growing. For example, even for the richer Caribbean SIDS, recovery from progressively more frequent and more intense weather events is a heavy and increasing burden – in 2019-2020 alone, the region experienced nine Category 3+ hurricanes, and a record number of named storms in the 2020 hurricane season – events that can wipe out more than the entire annual GDP of a SIDS[3].

In an effort to account for this injustice, developed countries agreed, in the 2009 Copenhagen Accord as well as the 2015 Paris Agreement, to ‘mobilise’ $100 billion a year of ‘scaled up, new and additional, predictable and adequate’ climate finance for developing countries, to be delivered by 2020[4]. This finance was to be balanced between adaptation and mitigation, with funding for adaptation prioritised for the most vulnerable, like SIDS. Alas, developed countries have not yet delivered on their promise. According to the latest OECD data – which is considered by some to overestimate actual climate finance in view of the balance of grants and loans and inconsistent reporting by donors[5] – only USD 79.6 billion was mobilised in 2019, of which a mere 20% targeted adaptation[6]. At the same time, the first needs report, released ahead of COP26, suggests that developing country Parties’ needs are in the order of trillions of dollars[7] – and this excludes funding for loss and damage, that is, the inevitable costs provoked by climate change that are already experienced by many communities around the world, such as recovery from storms[8].

It is thus not surprising that calls for more, and better, climate finance were omnipresent at COP26. Developing countries including SIDS insisted not only that developed countries finally meet the $100 billion goal; but that they double or better, quadruple, finance for adaptation; that this funding be public and grants-based; that access to funding is improved; that an explicit funding stream for loss and damage be established; and that a clear definition of climate finance be multilaterally agreed. SIDS further asked for a vulnerability indicator that would help donors consider vulnerability rather than income classification (the main criterion for development finance) when allocating funding. Indeed, a fairer allocation of finance is another problem, as currently some of the most vulnerable countries receive the smallest proportion of climate finance – in 2019, for instance, Least Developed Countries (LDCs) received around 19% and SIDS around 1.8%[9].

To what extent were these demands met? Several developed countries did indeed scale up their adaptation pledges, and publicly announced their new finance goals – some of which included doubling (for example Sweden). Yet they were reluctant to agree to very concrete language in the outcome text. The final COP26 decisions thus are dominated by fairly vague and soft language; the cover decision[10] thus ‘notes with deep regret’ the current finance gap, and ‘urges’ parties to fill it. Parties are ‘encouraged’ to ‘consider how vulnerability […] could be reflected in the provision and mobilization of concessional financial resources’. No specific funding stream for loss and damage was agreed, only a process that may eventually lead up to such a stream. Overall, while SIDS recognise some of the positive elements of the Glasgow Climate Pact, there was also much disappointment[11].

Ultimately, the climate finance outcomes of COP26 resemble the baby steps made now more than a decade ago – when what is required is a substantial leap. Recognising the promises made, the enormous sums needed to meet the challenges of climate change in the global South, and the relatively small share the $100 billion target ultimately represents – developed country Parties must deliver on promises, produce tangible outcomes, and provide predictable, measurable flows of grant-dominated public climate finance, in order to re-build trust with developing countries and respond to the effects of climate change that many are already experiencing today.

[1] We here use the terms ‘developed’ and ‘developing’ in the way they are used in the UNFCCC process.

[2]Ourbak, T., Quinquis, B. & Cristofari, C.-F., 2019. ‘L’Océanie, championne de la lutte contre les changements climatiques sur la scène internationale ?’ Journal de la Société des Océanistes, 149(2), pp. 211-221.

[3] World Bank, 2021, World Bank in the Caribbean. Available at: https://www.worldbank.org/en/country/caribbean/overview#1

[4] UNFCCC, 2009, Decision 2/CP.15 Copenhagen Accord. Available at: https://unfccc.int/resource/docs/2009/cop15/eng/11a01.pdf#page=4 ; UNFCCC, 2015, Paris Agreement. Available at: https://unfccc.int/sites/default/files/english_paris_agreement.pdf

[5] See also Carty, T., Kowalzig, J. & Zagema, B., 2020. Climate Finance Shadow Report 2020: Assessing progress towards the $100 billion commitment, Oxford: Oxfam. Available at: https://unfccc.int/sites/default/files/resource/bp-climate-finance-shadow-report-2020-201020-en.pdf

[6] OECD, 2021, Climate Finance Provided and Mobilised by Developed Countries: Aggregate trends updated with 2019 data, Paris: OECD Publishing. Available at: https://www.oecd-ilibrary.org/finance-and-investment/climate-finance-provided-and-mobilised-by-developed-countries-aggregate-trends-updated-with-2019-data_03590fb7-en

[7] The first assessment of the needs of developing countries conducted by the UNFCCC Standing Committee on Finance finds that, from Nationally Determined Contributions alone, needs costed by developing country Parties amounted to USD 5.8-5.9 trillion up to 2030. Includes figures from NDCs up to May 2021. UNFCCC, 2021, Executive summary by the Standing Committee on Finance of the first report on the determination of the needs of developing country Parties related to implementing the Convention and the Paris Agreement. Available at: https://unfccc.int/sites/default/files/resource/54307_2%20-%20UNFCCC%20First%20NDR%20summary%20-%20V6.pdf

[8] This concept, which refers to the actual permanent (loss) or reparable (damage) costs of climate impacts, is distinct from adaptation, which rather refers to long-term preparatory and resilience-building activities.

[9] Refer to 6

[10] Glasgow Climate Pact, contained in Decision -/CP.26. Available at: https://unfccc.int/process-and-meetings/conferences/glasgow-climate-change-conference-october-november-2021/outcomes-of-the-glasgow-climate-change-conference

[11] See e.g., Joubert-Lowen, 2021, Seychelles disappointed with outcomes of UN Climate Change Conference, official says. Available at:

http://www.seychellesnewsagency.com/articles/15832/Seychelles+disappointed+with+outcomes+of+UN+Climate+Change+Conference,+official+says and Jackson, Lagipoiva Cherelle, 2021,

Cop26: Pacific delegates condemn ‘monumental failure’ that leaves islands in peril. Available at: