Why Climate Finance? It's a Matter of Justice.
Fundamentally, we see climate change as an issue of justice. It represents one of the greatest challenges to human development and has the potential to significantly impact progress in the fight to end poverty. Climate finance funding is directed specifically to addressing the human impact of climate change - assisting vulnerable communities to combat the impact of climate change and the risks it poses to their development.
Climate finance is the recognition that countries who have least contributed to climate change are most vulnerable to its effects, now and into the future, and should be supported. This support takes the form of financial investment by high-income countries who have historically benefited from carbon-intensive industrialisation.
Climate finance can be broadly divided into two main areas; adaptation and mitigation. Adaptation focuses on addressing the realities of climate change, like rising sea levels, and includes projects such as building sea walls. Mitigation focuses on reducing contributing factors to climate change through technology such as renewable energy developments. Private sector engagement in mitigation can be a powerful tool for good, as development of new, sustainable technologies can have significant social and shareholder benefit. Adaptation projects often need governments to play a strong role in their financing.
The Sustainable Development Goals, signed last year by 193 countries, acknowledge the interconnectedness of development and climate change and recognise the importance of a global effort to address these two challenges.
Oaktree campaigned on climate finance in the lead up to the Paris Climate Conference last year, asking the government to commit to AUD$400 million to climate finance with an aim to scale it up in line with global commitments for developed countries to mobilise $100 billion a year by 2020.
The Prime Minister Malcolm Turnbull announced a commitment on Australia’s behalf of at least $1 billion over 5 years at the Paris talks. While positive, unfortunately it is not additional funding to combat this new threat. The money will come from the existing aid budget which has experienced devastating cuts in recent years. Australia needs to do more.
Tragically, climate change is already affecting our neighbours, with a number of islands in the Pacific faced with a need to relocate their populations.Papua New Guinea has some of the world’s first climate change refugees. Rising sea levels are inundating their freshwater supply and causing soil salinization. In the Carteraet Islands a number of families have been relocated to mainland Bougainville in order to escape the very real and present danger that faces them at home. For too many people, climate change is already a reality, impacting their livelihoods and risks pushing them into poverty.
The biggest gains to be made through climate finance lie in the early, preventative action to help protect low-income countries against these effects. Already there is evidence to support the fact that climate-adaption and disaster risk funding provided by Australia’s contribution to the Fast Start Finance program from 2010-12 enabled Vanuatu to better prepare for and respond to Cyclone Pam.
Australia must increase its climate finance contributions to help global commitments to the developing world of $100 billion a year by 2020. This is why Oaktree is calling on the government to provide $550 million this year in climate finance in new and additional funds with at least 50% of this money dedicated to adaptation. This should be a first step in Australia scaling up its contributions and providing its fair share to global climate finance flows by 2020. Investing in climate change adaptation and mitigation now will produce substantial savings in terms of reduced disaster losses and greater support and security for vulnerable communities in the face of future adverse effects of climate change.
Written by Chris Wallace