As crucial climate negotiations continues at the United Nations Climate Conference in Bonn, Germany, global development organization ActionAid has issued a stark warning over the growing push for private finance in international climate agreements.
The warning comes as the role of private finance is on the spotlight with negotiations on Article 2.1c and the Baku to Belèm Roadmap taking place at UN climate talks in Bonn this week.
Article 2.1c of the Paris Agreement commits parties to making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.
However, this has been interpreted by many developed countries as a cue to bring in private investment, a move developing nations and civil society groups criticize as a setback to climate justice.
Joining other civil society groups, ActionAid through its Global Lead on Climate Justice Teresa Anderson says the emphasis on private investment over public commitments is a cause for alarm.
“A consistent message we hear from rich countries at climate talks is that their pockets are empty, there is no public finance, and that private finance is needed to fill the gap in climate finance,” Anderson says.
She adds; “It’s not that private finance is low quality climate finance. Private finance is the way for financial actors in rich countries to scale up their extraction and profits.”
Repeatedly, critics have been pointing to mounting debt burdens, skewed risk-sharing, and a pattern of ‘climate profiteering,’ where investment flows are steered toward already profitable markets rather than communities most in need of adaptation or loss and damage support.
Developing countries, already grappling with the compounded impacts of climate change and global economic instability, have long called for grant-based financing and the fulfilment of overdue financial pledges dating back to 2009.
And Anderson says that private financial flows, largely backed by wealthy nations, are being used as tools to extend economic control over the Global South rather than provide genuine climate support.
“When it comes to climate change, private finance is a Trojan Horse for exploitation,” Anderson says.
“At climate negotiations, developing countries need to say ‘neigh.’”
