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13 Jun, 2022

5 Min Read


GS-III : Biodiversity & Environment Climate Change


Oxfam International released a report, which says the United Nations requires eight times more climate finance than 20 years ago to be able to provide humanitarian aid to low-income countries during climate-related disasters.

It is also said that United Nation cannot provide poor countries with enough humanitarian relief to recover from climate disasters as rich donor countries are holding back their finances.

CLIMATE DISASTER: Climate disaster refers to activity like floods, storms, drought, and heat waves mainly due to changes in climate over a long period of time either by a shift in temperatures and weather patterns due to natural or anthropogenic activity.


  1. The appealed amount rose to an average of USD 15.5 billion in 2019-2021 from USD 1.6 billion in 2000-2002 which is an increase of 819%.
  2. Rich countries have been able to deliver 545 of the United Nations in the last five years, leaving a massive deficit of USD 28-USD33 billion.
  3. Low-income countries people are most vulnerable to the impact of climate-related disasters either floods or droughts which again cause severe effects on their health.
  4. Besides the huge financial burden, Loss and damage due to climate crisis encompass health, biodiversity and loss of indigenous knowledge among gender issues and another related factor.
  5. Rich donor countries provide USD1 for every USD 2 needed for the UN humanitarian aid, Despite the fact that the richest 15 people on earth are emitting twice as much carbon pollution as the poorest half of humanity.
  6. The country like Afghanistan, Haiti, Kenya, Niger, Somalia, and South Sudan, are in need of climate finance.
  7. Richer people are less to get exposed to climate risk and are better able to weather disasters as they live in more secure places and have more assets were as poor people have less protection and could face more damage.

Oxfam International: It is a group of independent non-governmental organizations formed in 1995. The name Oxfam comes from the oxford committee for famine relief founded in Britain in 1942. Its secretariat is in Nairobi, Kenya. Its aim is to maximize efficiency and achieve a greater impact to reduce global poverty and injustice.

CLIMATE FINANCE: Climate finance refers to financing either from public or private or any other source to support mitigation and adaptation action that will address climate change. It also focuses to reduce the impact of climate change and adversely addressing the climate change issue.

The Kyoto Protocol and Paris Agreement call for financial assistance from parties to adapt to the adverse effects and reduce the impacts of climate change.

The underlying principle behind climate financing are:

  1. Polluters pay the Principle which said that those who produce pollution should bear the cost of managing it and preventing its damage to human health. It was also covered under the 1992 Rio declaration which is based on regulating the pollution of land, water and air.
  2. Common but differentiated Responsibility is a principle of climate financing of UNFCC were developed country Parties have to provide financial aid to developing countries.

Various modes of Climate financing mechanisms are:

  1. Global Environment Facility- is the largest multilateral trust fund with the aim to mobilize funds for the implementation of environmental conventions on biodiversity, desertification, climate change, pollution and chemicals. It was established on the eve of the Rio earth summit.
  2. Green Climate Fund- This fund was formally established during the 2010 UNFCCC Conference of Parties in Cancun. It is an operating entity based in Incheon, South Korea with the aim to assist developing countries in the adaption and mitigation practices to counter climate change.
  3. Mechanism under Kyoto Protocol
  • Emission Trading- Parties with commitment under Kyoto Protocol (Annex B Parties) have emission targets to fulfil. In order to comply with these targets, they trade with the countries that have achieved the target to earn CERs (CERTIFIED EMISSION REDUCTION) or can even earn CERs by financing emission reducing or eliminating projects in developing nations.
  • Clean Development Mechanism- The developed counties invest in emission reduction projects in the developing countries.
  • Joint Implementation- Under this, the developed countries carry out joint emission reduction projects with other developed countries.
  • 4. Adaption Fund- It was set up under the Kyoto Protocol of the UNFCCC. It was established at the 7th Conference of Parties (COP7) in Marrakesh Morocco. It is managed by the Adaption Fund board and World Bank acts as a trustee of the Adaption Fund. It finances projects and programs of the developing nation to adapt to the harmful effects of climate change. It is intended to finance climate adaptation projects. It is financed by a share of proceeds from Clean Development Mechanism projects and also from the funds of other sources.
  • LDFC (Least Developed Countries Fund, operated by Global Environment Facility)- was established to finance and implement the projects of adaptation in the least developed countries under the National Adaption Programme of Action submitted by the least developed countries to the UNFCC.
  • SCCF (Special Climate Change Fund, operated by Global Environment Facility)- It was established to finance projects related to technology transfer, energy, transport, industry, agriculture, forestry and waste management and economic diversification.
  1. Climate Investment Funds- Established in 2008, with a contribution of $ 10 billion to scale up mitigation and adaption in developing and middle-income countries. It is a multilateral climate finance mechanism for developing countries to switch to clean technology, low carbon and climate-resilient development. It works with multilateral organizations as its implementing agencies. They are World Bank Group (WB), African Development Bank (AfDB), European Bank of Reconstruction and Development (ERBD), Inter-American Development Bank Group (IDB) and Asian Development Bank (ADB).
  2. Clean Technology Fund (It is also implemented through WB, ADB, IDB, EBRD, AfDB) - It is a multi-doner trust fund under the Climate Investment Fund framework, that promotes the transfer of low-carbon technologies, energy efficient, renewable and clean transport technology to the emerging middle -income markets and developing economies.
  3. Forest Carbon Partnership Facility (FCPF)- Launched in 2008, it is a global partnership of government, civil society, business and multilateral organizations that focuses on reducing emissions from forest degradation and deforestation and promotes forest carbon stock conservation and sustainable management of forests in developing countries, commonly referred as REDD+. It is administered by WORLD BANK. Funding is provided through:
  • FCPF Readiness Fund -that helps countries in designing, measuring and setting verification systems for their national REDD+ arrangement.
  • FCPF Carbon Fund - result-based payment to countries that have achieved verifiable emission reduction in their forest and broader land-use sector.
  1. Global Climate Change Alliance – It is a European Union Flagship initiative which helps mainly Small Island Developing States and Least Developed Countries to increase their resilience to climate change through adaptation, mitigation and disaster risk reduction. 20% of the EU budget is spent on climate action through this.

Source: THe Hindu

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