As the dust settles from the COP29, we are left with a controversial and rushed-through pledge of public funds for climate finance of $300 billion per year, along with a proposal that this be topped up to $1.3 trillion through a range of sources, including private investment.
This reliance on private investment to generate an adequate level of climate finance is both highly unethical and extremely unwise.
It is unethical because it would impose yet more loans on parts of the world which are already struggling with debts that undermine their ability to provide the most minimal basic services, such as healthcare, for their people. It would also oblige those who are least responsible for the climate crisis to shoulder debt and pay interest to investors who are themselves simply able to pay their way out of, or otherwise avoid, making ‘tiresome’ environmental sacrifices.
Of course, the assumption behind such so-called investments is that they will generate sufficient economic growth to enable everyone – both debtors and creditors – to benefit financially. In the real world however, their only sure economic effect will be to exacerbate pressure to grow the economy at the very time when there is a clear and pressing need to transition away from aggregate economic growth as a goal.
There is also controversy about the distribution of climate finance funds, as there is currently no guarantee that they will actually get to the people who need them most, or be used in a way that helps with climate change mitigation. Some may even be spent on supporting fossil fuels.
So, what to do?
Thankfully, there are other ways to raise the necessary climate finance, and there are also ways to ensure that it will be used appropriately. For example, our Cap and Share proposal could raise $1.4 trillion in its first year if it was implemented on a global basis – with no loans or GDP growth dependency involved – and its per-capita distribution would guarantee that everyone who needed funds would receive them. Moreover, those funds would automatically be spent in a way that would support climate action, because they would be distributed in the context of an overall cap on the fossil fuel supply, along with a phase-out plan for the production of fossil fuels.
While it is true that a global-level Cap and Share would be challenging to implement in the short term, intermediate steps could be taken quite quickly, and could then be scaled up. The Feasta Climate Group proposes that blocs of countries, with varying levels of income, join together to form Cap and Share partnerships. These could include the EU and the members of the Beyond Oil and Gas Alliance. Such partnerships would guarantee a steady flow of climate finance from high-income to the low-income countries (and also from high-income to low-income individuals within countries) while also ensuring a phase-out of their fossil fuel use.
If you’d like to find out more, please see this paper and take a look at these two new short videos on Cap and Share:
You may also find the Cap and Share Climate Alliance website of interest. The Alliance is a group of NGOs from around the world who are working to promote Cap and Share.
Videos produced by https://linktr.ee/thomas.sid.smith
Featured image by Ruth Enyedi on Unsplash.
Caroline Whyte has been involved with Feasta since 2002. She studied ecological economics at Mälardalen University in Sweden, writing a masters thesis on the relationship between central banking and sustainability. She contributed to Feasta’s books Fleeing Vesuvius and Sharing for Survival. Along with four other Feasta climate group members she helped to launch the CapGlobalCarbon initative at the COP-21 summit in Paris in December 2015. She is also an active member of Feasta’s currency group . She is a steering group member of the Wellbeing Economy Hub for Ireland, the Environmental Pillar, and Stop Climate Chaos Ireland, and is one of three Pillar members of the Irish National Economic and Social Council (NESC). She lives in central France, from where she edits the Feasta website.
