Spotlight Activity: The EU is a Leader in Providing International Climate Finance That Has the Potential of Doing More
When the Paris Agreement was signed, the European Union pledged to do its part in contributing its fair share towards the developed countries’ goal of jointly making available USD 100 billion per year by 2020 to support developing countries. This was stipulated under article 9 of the Agreement.
In 2016, total contributions from the EU, its Member States and the European Investment Bank (EIB) amounted to €20.2 billion, a significant increase compared to 2015. This includes climate finance from public budgets and other development finance institutions.
The 2016 amount is the all-time high in climate finance funding to developing countries. For the 2010-2012 period the EU and Member States provided EUR 7.3 billion, in 2013 it provided over EUR 9.5 billion, and in 2014 EUR it contributed 14.5 billion.
The EU’s contribution to the USD 100 billion per year by 2020 will come from a wide variety of public and private, bilateral and multilateral, and alternative sources of finance. So far, the EU is financing developing countries through the following channels and programs:
- Global Climate Change Alliance+ – the main channel to support policy dialogue and specific, targeted climate action in developing countries with a strong focus on Least Developed Countries and Small Island Developing States.
- EU External Investment Plan – a program to mobilise innovative financial instruments to support the preparation and financing of bankable climate relevant development projects. The European Commission contributed EUR 4.1 billion, expecting to leverage more than EUR 44 billion of investments by 2020.
- Green Climate Fund – to which EU Member States pledged USD 4.8 billion since 2014, which is almost half of total pledges.
Status: Right Direction
The EU’s upward trend in financial pledges indicate a serious commitment to the cause. However, the European Union needs to play an even bigger role in international climate finance by committing to a minimum of EUR 30 billion per year by 2020 and by engaging other Annex II countries in securing yearly investments of at least USD100 billion by 2020.
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