Climate Action Network Submission on 2.1c

Key Points of Context

•  All countries agreed 2.1c as part of the Paris Agreement, and calls for “[m]aking finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”. It, therefore, applies to mitigation, adaptation, and loss and damage and should not be interpreted narrowly.
• 2.1c should be approached in a just and equitable manner, in line with Common But Differentiated Responsibility and Respective Capabilities (CBDR-RC), based on science, in a gender-responsive approach, with respect for human rights. For mitigation, this implies a just and equitable phase-out of all fossil fuels (coal, oil and gas) before 2050, with significant reductions to be achieved in line with the need to reduce emissions by at least 43% by 2030 compared to 2019 to reach the 1.5°C target and rapidly scaling up and prioritizing finance for renewables and energy investment, targeting particular countries and regions with lower investment; likewise, for adaptation and loss and damage, this implies providing new and additional, predictable and adequate support to developing countries to deal with the increasing severity and frequency of climate disasters, address and adapt to current and future climate impacts and build the resilience of people, communities and ecosystems.
• Making finance flows consistent means consistency both in terms of direction as well as scale and quality of provision — urgently orienting finance away from fossil fuels and other harmful activities as well as urgently scaling up additional finance for climate action in a form that does not undermine the ability of recipient countries to address climate impacts as part of a broader focus on low-carbon and climate-resilient development.
• 2.1c does not replace or override requirements under Article 9 of the Paris Agreement, specifically, the mandate to developed countries under Article 9.1 to “provide financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation of their existing obligations under the Convention.” Article 9.1 is the cornerstone of equitable climate finance provision based on CBDR-RC within the UNFCCC. However, alongside dedicated climate finance for a just and equitable transition, to adapt to climate change, and to address loss and damage, all global finance must align with global climate action. Progress on 2.1c cannot be pursued as a standalone goal but is required alongside and complementary to significant progress on Article 9.1, and must not be used to divert attention away from the much needed core public finance provision responsibilities of developed countries.
• Developed countries say there is not enough public finance and, therefore private finance is required, but in many developing countries, there is not enough public finance to afford the debt servicing costs associated with increased private finance involvement and indebtedness.
• A just and equitable approach to 2.1c must assert a wide and ambitious agenda of scaling public climate finance from developed countries and transforming the wider global financial system to make it more just and equitable for developing countries.
• Currently, achievement of 2.1c is undermined by the flow of wealth out of developing countries into higher-income countries, which is estimated in the trillions per year and thus many times greater than what is provided through ODA and climate finance; but efforts to reform the global financial system are hampered as developing countries continue to be structurally under-represented in financial and economic decision-making outside the UN, which maintain uneven global power relations that are rooted in colonial legacies.