Climate funding tops opening session of COP 27 as developing countries struggle

CAIRO – 7 November 2022: Chair of the African Union (AU) and President of Senegal Macky Sall said Monday that Africa is experiencing the impact of climate change in a very tough way, as most adaptation projects on the continent are funded through loans.

The AU chair called, in his speech at the opening of COP 27 in Sharm El Sheikh, for other countries to bear the responsibility of their actions. He stressed that fulfilling the $100-billion pledge has never been more essential than now, given that all scientific evidence show that the impact of climate change is becoming more severe.

"Although Africa’s share in global warming is just 4 percent, the continent is quite adamant to reach the 0-emission goal," Sall noted, showcasing the African project dubbed the Green Belt, which involves the reclamation of lands in 11 countries.

Prime Minister of Barbados Mia Mottley raised very similar points saying, "countries of the North get loans for an interest of 1-4 percent, while countries of the South get loans for an interest of 14 percent. Where’s the funding [to developing nations]."

Mottley stressed, on that front, that "soft and preferential financing must be made available to developing countries." She also highlighted that big industrial structures have many shortfalls that should be remedied when dealing with developing nations. In that context, she gave the example of electric cars, pointing out that not all countries are ready to introduce such vehicles.

The Barbados prime minister further questioned how oil and gas companies do not contribute 10 cents for each dollar they make to the Loss and Damage Fund, arguing they made billions of dollars over the past few months.

Similarly, Mottley called for amendments to the Bretton Woods Agreement, which is the base of the global currency exchange system, fundamentally relying on the U.S. dollar and gold.

On her side, Renowned Economist and Director of London School of Economics (LSE) Baroness Minouche Shafik asserted that international financing institutions must offer more soft loans to developing nations.

Shafik elaborated that the size of international funding has to be tripled to speed up green industrial transition. Speaking of the African continent, Shafik said, "Africa, which is rich in sunlight and wind, can, by some support and funding, achieve a leap."