Q+A: Why Should the United States Contribute to Climate Finance?

Global temperatures have been rising for decades, but recent headlines indicate that climate change is happening even faster than climate scientists anticipated. Recent studies show the Earth’s oceans are building and storing heat at rates much higher than previously estimated. The Intergovernmental Panel on Climate Change (IPCC), recently released a sobering report detailing the looming economic and environmental impacts of a rapidly warming world.

“The need for transformative action on climate change is dire,” said Erin Graham, PhD, an assistant professor in Drexel University’s College of Arts and Sciences. Graham is an expert on the design and development of international organizations, and her research focuses on climate change and global health issues. In a recent column in The Bulletin of the Atomic Scientists, she explains why the United States must continue to support developing nations in reducing emissions and adapting to the effects of climate change, despite its withdrawal from the Paris Climate Agreement.

“When the United States announced it would withdraw from the Paris Agreement, the question of how it would affect domestic emissions in the U.S. was front and center. But other U.S. obligations — like the need to provide climate finance to developing countries — were mostly ignored,” she wrote in the column.

In a Q+A with the Drexel News Blog, Graham broke down why the economies of the future need to be low-carbon and why we need to facilitate and finance them now.

What is “climate finance”?

Climate finance is money that is invested in projects to mitigate climate change or adapt to its effects. Mitigation aims to reduce emissions. Adaptation aims to help people deal with the impacts of a changing climate — think seawalls or drought-resistant crops. In the context of international climate agreements, finance is mostly provided by wealthy, developed countries and transferred to poorer, developing countries. Climate finance is delivered through international organizations, like the Global Environment Facility, Green Climate Fund and Adaptation Fund.

Why should the United States provide funding to help developing countries adapt to the effects of climate change?  

Imagine someone is throwing a baseball outside your house and breaks your window. You ask them for money to replace it. If they say “yes,” are they engaged in an act of charity? Most people would say “no.” The ballplayer is not a philanthropist; he is taking responsibility for his actions. One of the cruel twists of climate change is that poor countries that have contributed the least to global warming are among the earliest and worst hit by the consequences. The U.S. is the largest historical emitter of carbon dioxide and is a major source of the problems developing states are experiencing. Politicians who deny climate change pretend their policies don’t hurt Americans, but they also ignore the repercussions of their behavior for those outside U.S. borders. If the U.S. wants to think of itself as a responsible country, then it should help developing countries adapt to climate change.

Which countries are major contributors when it comes to climate finance?

Historically, the U.S. was a major contributor to the Global Environment Facility (GEF), an international organization founded in 1991 to address global environmental issues. The current Republican administration and Congress have cut funding to the GEF and zeroed out funding to the Green Climate Fund, which had been supported by the Obama administration. The largest contributors come from wealthy developed countries like Germany, France, Sweden, Japan, the Netherlands and Canada. All of these countries, and many others, contributed at a much higher per-capita rate than the United States even before the U.S. cut its contributions.

What does the United States gain when it funds mitigation in developing countries?

When we talk about funding mitigation efforts in developing countries, or anywhere else for that matter, the first thing to remember is that the benefits of mitigation anywhere accrue to people everywhere. Greenhouse gas (GHG) emissions produce global warming regardless of their geographic source, so Americans benefit from emission reductions wherever they occur. The self-interested justification to finance mitigation in developing countries is clear: to limit global warming and its effects on the U.S.

In rapidly developing countries like India, what are the benefits of shifting their dependence away from fossil fuels?

Rapidly developing countries like China, India and Indonesia, are crucial to limiting climate change and its effects. If these economies can avoid mass dependence on fossil fuels as they continue to develop, the benefit in avoided emissions will be enormous. Conversely, if they develop using coal and other dirty fuels, emissions will skyrocket. India provides an example. In 2015, India was the world’s third-largest greenhouse gas emitter, after China and the U.S. Yet its per capita emissions were just 1.58 metric tons per person. If Indians move toward consuming fossil fuels like Americans, who do so at a rate of 15.53 tons per capita per year, the effect will be disastrous.

Can cities, states and the private market contribute to climate finance?

Yes, and this is a really important question in the wake of the federal government cutting climate finance. International organizations like the Green Climate Fund, Adaptation Fund and Global Environment Facility are designed to accept funding from just about any type of actor, including cities, states, companies, and even individuals. So, the main barriers aren’t about the international architecture, which can accept money from a wide range of contributors, they’re about political knowledge and political will. One possibility is for cities and states to allow citizens to make individual voluntary contributions to a global climate fund on income tax returns. Companies and philanthropic organizations, which are increasingly active in funding international organizations, can give directly to the climate finance institutions. In the U.S., individuals can make tax-deductible contributions to the Adaptation Fund through the United Nations Foundation. Taken together, these various decentralized efforts could help compensate for decisions by the Trump Administration and the Republican majority in Congress to cut climate finance to developing states.

What makes mitigation efforts more effective on the federal level? Why is a decentralized strategy not ideal?

The critical weakness is the absence of any incentive provided by the federal level to encourage, let alone mandate, action on mitigation. In practice this means that American states that are politically more progressive will act, but states that are more conservative will not. Further, action by progressive states may be less ambitious than in an environment in which all states must act, due to concerns about costs and economic competition.

In conclusion…

Climate change is already causing extended droughts, leading to food shortages. Flooding and extreme weather events like hurricanes are difficult for all communities, but especially those with poor infrastructure and limited emergency response. The risk of vector-borne diseases like malaria and Dengue fever that spread in warmer temperatures, is increasing and the number of people that die from heatstroke in developing states is on the rise. In the extreme, some island states expect they will literally lose their country. The island state of Tuvalu has signed an agreement with New Zealand to begin to resettle the island’s inhabitants.

There is a lack of public knowledge and a lot of misinformation about climate change. Resources that explain what climate finance is are practically nonexistent, according to Graham.

“Opponents of climate finance like to assert that it redistributes wealth and is therefore somehow a bad deal for the United States. But this ignores the clear benefits that the United States reaps from mitigation that occurs outside its borders.” explains Graham. “With regard to the smaller component of climate finance that goes toward adaptation, the aid we need to provide isn’t charity, it’s compensation.”

Erin Graham, PhD, is a Drexel researcher and assistant professor of politics in the College of Arts and Sciences.

Media interested in speaking with Graham should contact Emily Storz at els332@drexel.edu or 215 895-2705.

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