Reuters recently carried perhaps one of the most important news stories of recent times.

According to the report, US Treasury Secretary Janet Yellen said, following the G20 finance leaders’ meeting, that the world needs around $3 trillion per year in financing by 2050 to meet global climate goals, and added that she described filling this gap as “the biggest economic opportunity of the 21st century.”

In fact, Janet Yellen has set the bar a little higher. According to a recent report by Climate Home News, during the climate negotiations in Bonn, developing countries had stated that the amount of annual climate financing they demanded from developed countries was in the range of $1.1–$1.3 trillion. In any case, for quite some time now, every sane scientist and sustainability professional has been saying that significant investment is needed to achieve carbon neutrality targets — and that this level corresponds to trillions of dollars.

You might be wondering, what does “filling the gap” mean in Yellen’s statement? Well, it literally means “filling the gap”… Because there is a “big gap” — or in other words, a “chasm” — between the financing needed and the financing pledged by developed countries!

Developed countries (and at the same time, the main culprits of the climate crisis we live in) continue to make low financing allocations, as if to say “let’s keep up appearances,” and persist in this attitude.

Let’s take a closer look.

As you know, COP28 was held in the United Arab Emirates under the shadow of many debates that began over its president and spread to other areas. As a result of the discussions, with six countries pledging new funds, the total commitment to the Green Climate Fund (GCF) from 31 countries reached $12.8 billion. In other words, the targeted financing figures at COP28 were not achieved.

Subsequently, months before COP29, countries gathered in Bonn, and they couldn’t even agree on the scale of the global financing requirement to help the developing world fight climate change — let alone how it should be divided. Therefore, hopes were left for the COP29 climate talks to be held in Azerbaijan in November.

Azerbaijan, which will host the United Nations COP29 climate summit, also announced the launch of a new $1 billion Climate Action Fund to support new national climate targets in developing countries.

Whether you add it up from the bottom up or the top down, the gap between the pledged financing amount and the amount needed becomes immediately apparent.

Let us spare you the trouble. In fact, Yellen also mentioned the total financing amount raised so far. She stated that in 2022, wealthy economies provided a record $116 billion in climate financing for developing countries, and that 40% of this came from multilateral development banks (MDBs).

The required funding is $3 trillion, while the amount provided in 2022 was $116 billion. In other words, just one twenty-fifth of the need.

Yellen also added, before concluding her remarks, that banks — including the World Bank and the Inter-American Development Bank (IDB) — have set new targets. In other words, she spread a bit of hope.

It is clear that there is still a long way to go. The uncertainty created by the clouds on this path will certainly diminish somewhat after the COP29 meetings in Azerbaijan.

Until then, we will have to make do with the hope Yellen has given us.

Until the next article, stay healthy…

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