Climate justice advocates urge Global North to fix financial flows

Climate justice advocates are sounding an alarm over the widening disparities in climate finance response efforts, calling Global North countries to fix the financial flows to address the severe impacts of the climate crisis faced by the Global South.

The advocates made the call during a webinar, ‘Global South Media Science Cafè-The Finance Flows Failing Our Planet,’ organized by ActionAid International in collaboration with Media for Environment, Science Health, and Agriculture (MESHA).

Despite international agreements such as the 2009 commitment for $100 billion funding annually from wealthy countries, progress remains inadequate as wealthy nations fail to meet the target on time. Advocates also argue that the number is minimal as it was plucked out the air in 2009, well before the scale and costs of climate change were really understood.

“Communities in the Global South need support, especially financing for addressing loss and damage for recovering the aftermath of disasters, adaptation for strengthening resilience to future climate impacts, and mitigation for transitioning to greener pathways to reduce greenhouse gases,” Teresa Anderson, ActionAid International Climate Justice Lead said.

“New financial goals need to be agreed from 2025 onwards. Trillions a year are needed for the Global South to pay for loss and damage, adaptation, and mitigation. These funds need to be in grants not loans and needs to paid by countries from the Global North,” she added.

Despite the need for substantial funding, Anderson noted that Global North countries are still blocking, trying to keep the numbers down, and refusing to take real numbers.

“We are often told by rich countries that increasing climate finance is not possible. But ActionAid has calculated that the Global North can, in fact, raise $2 trillion a year by raising taxes on the biggest corporations and wealthiest people,” Anderson said.

“Rich countries hardly pay a fair share for environmental injustice, if anything a country like US has continually appeared to be sabotaging the talks on reparations,” Susan Otieno, ActionAid International Kenya Executive Director said.

She added; “We need a fair climate justice fund. Climate justice is inherently political, and we must hold our governments accountable but most importantly the countries in the North and also the major polluters.”

Research suggests the rich countries in the Global North owe over $100 trillion in climate debt to the Global South by 2050, hence why the amount of climate finance should be counted in the trillions and not the billions.

The world’s top fossil fuel companies owe at least $209 billion per year in climate reparations to compensate communities most damaged by their polluting business.

According to Anderson, action on tax in countries that are most responsible for carbon emissions could allow them to raise over $2 trillion per year to contribute towards a climate finance goal that must be set in trillions of US dollars every year.

“If the Global North wants to be able to address the climate crisis, they need to agree to an ambitious new climate finance goal,” Anderson said.

Anderson further raised concerns on the need to channel funds to climate solutions, saying the world’s money flows are going in the wrong direction. She said billions of funds are still being channeled into climate-destructive industries, such as fossil fuels and industrial agriculture, which exacerbate the crisis rather than mitigate it.

A 2023 research by ActionAid shows that since the Paris Agreement was signed in 2016, banks have channeled $370 billion to industrial agriculture and $3.2 trillion to fossil fuels in the Global South.

“It’s absurd that so much of the world’s money is still being poured into fueling climate change, while barely any is going to the solutions. This misallocation of funds locks Global South countries into a cycle of debt and environmental degradation. It’s clear that we can’t address the climate crisis unless we fix the finance flows that are failing the planet,” Anderson said.

ActionAid research last year found that 93 percent of the countries most vulnerable to the climate crisis are in debt distress, or at risk of debt distress. This is because they are covering the cost of climate impacts by paying billions, possibly trillions to cope with the impacts of climate change.

“Every time a disaster happens, they are forced to take loans to recover,” Anderson said. “They are unable to invest in education, health or climate action. These Governments are squeezing the poorest to repay those debts.”