The second presentation during the EJN Net Zero workshop focused on the complexities and challenges surrounding climate finance, particularly for African countries. The discussion centered on several key points,
It was emphasized that climate finance must be additional to existing aid. If it’s not, it could divert funds from other crucial development areas like healthcare, education, and poverty alleviation. African countries view this as a significant problem, as it could undermine their development priorities.
A major issue discussed was the proportion of grants versus loans in climate finance, much of the $100 billion climate finance commitment was provided as loans, often at market rates, which are difficult for developing countries to afford, there was a call for more concessional finance, which would be less burdensome for these countries.
The allocation of finance between mitigation (efforts to reduce emissions) and adaptation (preparing for climate impacts) was another critical issue. The $100 billion commitment was skewed towards mitigation, leaving many adaptation needs unmet in African countries. Loss and damage, which refers to the costs associated with the impacts of climate change, was not even included in this commitment, further exacerbating the situation.
The presentation highlighted the lack of a clear system for determining individual countries’ obligations to provide climate finance. This has led to discrepancies, with some countries like the United States contributing significantly less than what would be expected based on their historical responsibility for emissions.
The method of disbursing climate finance was another contentious point. Many developing countries prefer funds to be channeled through UN climate funds, where they have a say in governance, rather than through multilateral development banks or private sector channels.
The presentation discussed the ongoing negotiations around setting a new climate finance goal to replace the $100 billion commitment, with developing countries like those in Africa proposing a figure of $1.3 trillion per year. However, developed countries have been reluctant to agree on a specific number and have different views on the composition of this finance, particularly regarding the balance between grants and loans.
The need for greater transparency in how climate finance is counted and reported was underscored. This includes proper definitions of what constitutes climate finance and ensuring that grants and loans are clearly distinguished.
The discussion also touched on the attempts by some developed countries to differentiate between developing countries in terms of who should receive climate finance, with African countries insisting on fair treatment.
There was a debate about whether new emerging economies like China should also be contributing to climate finance, a point that has caused significant tension between developed and developing countries. the presentation highlighted the deep challenges and negotiations still needed to ensure that climate finance is fair, sufficient, and effectively targeted to meet the needs of developing countries, particularly in Africa
Net Zero and Carbon Credits Understanding the Challenges and Opportunities
Introduction
The concept of achieving a balance between the amount of greenhouse gases emitted and the amount removed from the atmosphere, carbon credits certificates representing the reduction, avoidance, or sequestration of one metric ton of CO2 or equivalent gases.
Key Issues
In many cases, developers offer lower price points to individuals participating in carbon credit projects, leading to exploitation. A more collective approach could empower communities and ensure fair compensation.
Governments in some regions, particularly in Africa, might view carbon credit projects as a financial opportunity. However, these projects often fail to benefit local communities, with funds being misappropriated or diverted.
Greenwashing
Companies often claim to be carbon-neutral by purchasing carbon credits without making substantial changes to their operations. This practice of greenwashing is widespread and undermines the credibility of carbon neutrality claims, and the reliance on carbon credits can detract from genuine efforts to reduce emissions, allowing companies to continue harmful practices while appearing environmentally responsible.
The Paris Agreement relies on countries voluntarily reducing emissions, but the lack of a global enforcement mechanism means compliance is uneven, and in many companies operate globally, complicating efforts to regulate their emissions. The current system is based more on self-commitment than on strict, enforceable rules, and the ACMI aims to centralize carbon markets in Africa, potentially increasing transparency and fairness. However, it remains to be seen if this initiative will effectively address the issues of transparency and equitable distribution of benefits.
Civil society must demand transparency and accountability from both governments and project developers to ensure that local communities truly benefit from carbon credit projects, and It is crucial to involve local communities in the development and implementation of carbon credit projects. This ensures that those most affected by climate change are the primary beneficiaries, and establishing clear and fair benefit-sharing arrangements is essential to avoid conflicts and ensure that local landowners and communities are adequately compensated.
There is a need for more emphasis on projects that focus on future benefits and sustainable development. Engaging with people on the ground and addressing their needs will make climate action more relatable and effective, and the transparency on local involvement are key to the success of carbon markets and net-zero initiatives. Without these, the risk of corruption and exploitation remains high, the path to net-zero is complex, with significant challenges related to carbon credits, greenwashing, and equitable distribution of benefits, Governments, companies, and civil society must work together to ensure that carbon markets are transparent, fair, and genuinely beneficial to the communities involved.