COP26: Climate Finance and Human Rights – a story of insufficient ambition

by Pedro Cisterna Gaete*

At COP15 in Copenhagen in 2009, developed countries committed to mobilising 100 billion dollars annually by 2020 for finance mitigation and adaptation actions. Regrettably, developed countries did not comply with this pledge, reaching only 79.6 billion dollars by 2019 with no possibilities to achieve the 2020 pledge. It is in the context of this failure that the climate finance negotiations took place in Glasgow in 2021. This post analyses the climate finance negotiations at COP26 and looks at their impact on human rights. Specifically, it examines whether insufficient climate finance action interferes with the human rights of the most vulnerable. In doing so, this post begins by establishing the relationship between climate finance and human rights and then analyses the COP26 climate finance decisions from a human rights-based approach. The post concludes by arguing for the incorporation of human rights into climate finance decision-making to ensure that pledges and actions are more effective in the future.  

Climate Finance and Human Rights – a fundamental relationship

Article 4 of the United Nations Framework Convention on Climate Change (FCCC) defined the obligation of developed countries to provide financial resources needed by developing nations to take measures to address climate change. However, the FCCC focused mainly on reducing emissions, giving less importance to adaptation actions. The result of this approach was that the financing of mitigation actions of developing countries was more beneficial for developed countries because of their global effects. In contrast, the local impact of financing adaptation does not have a direct benefit for developed countries. In addition, according to the FCCC, climate finance to developing countries should be ‘new and additional’, and thus must be distinct from any financial aid received by developing nations in other fields.  

Subsequent COP decisions made progress concerning the question of climate finance determinacy. In 2007, the talks at Bali focused on improving access to ‘adequate, predictable and sustainable financial resources’. In 2009 at COP15 in Copenhagen, the parties defined clear climate finance goals such as the 100 billion dollar pledge by 2020. Although these commitments were not binding, they set the stage for advancing climate finance governance in Cancun and Durban, including through the establishment of the ‘Standing Committee on Finance’. These decisions marked the evolution of Climate Finance in the years preceding the adoption of the Paris Agreement. The Paris Agreement continued differentiating between developed and developing countries, asserting that the former ‘shall provide financial resources to assist’ the latter. In addition, the Paris Agreement in its article 9.2 is innovative in that it calls on developing countries to financially assist other Parties voluntarily and progressively. Scholars and commentators have interpreted this rule as an encouraging instrument to foster South-South Cooperation.

A common element that shapes the climate finance regime as it has been developed in each of these decisions is the common but differentiated responsibilities (CBDR) principle, which recognises developed countries’ historical responsibility and capacities. The CBDR principle constitutes an interstate manifestation of the equity principle, recognised in article 3 of the FCCC.  The CBDR principle focuses on protecting the most vulnerable countries from climate change, and it seeks to improve their resilience, adaptive capacity and mitigation ambition. A critical component of this is financial cooperation. If the poorest nations do not have the necessary financial resources to enhance resilience and adaptive capacity, the effects of climate change can inflict more damage and constitute a real threat to the human rights of their populations. Thus, applying the CBDR principle, developed countries should transfer climate finance to developing nations to protect human rights against climate change impacts. As the Working Group on the Right to Development has stated, international climate finance is ‘informed by solidarity, equity and justice’, which is also in line with article 2.2 of the Paris Agreement.

These ideas of equity and differentiation in finance reflect a particular concern for the ‘systemic human rights risks posed by climate change’, requiring an urgent global response, mobilising financial resources for adaptation and mitigation actions to protect the human rights of the most vulnerable.  

Climate Finance at COP26 and Human Rights

At COP26, various decisions were taken concerning climate finance. None of these decisions, however, explicitly connected climate finance to human rights. Both the COP26 and the CMA (signatories to the Paris Agreement) cover decisions explicitly consider human rights obligations in their preambles, providing some guidance in regard to the interpretation of those decisions. However, human rights are not mentioned anywhere else in the decisions. In this context, it is critical that climate finance decisions focused on improving financial mechanisms to increase economic cooperation to protect vulnerable countries and populations.

For instance, developing countries have long demanded an increase in the mobilisation of financial resources for adaptation. Poorer nations with low adaptive capacity and lack of resilience face the most dangerous impacts of climate change, and thus must urgently implement adaptation actions. The first report of the ‘Standard Committee on Finance’ on developing countries’ needs established that adaptation needs were mentioned more often in the official reports of developing countries, especially in the agriculture and water sector. In addition, the Global Commission on Adaptation identified U$ 1.8 trillion in adaptation financial needs between 2020 and 2030. These figures reflect the urgent need for greater financial cooperation to address adaptation and mitigation needs.

The Glasgow Climate Pact expressly recognises the need for adaptation finance. It emphasises the insufficiency of current funds to respond to ‘worsening climate change impacts in developing country parties’. This attention to adaptation finance reflects the parties’ concern for the human rights of inhabitants of the most vulnerable countries, who lives are threatened by climate change impacts. Adaptation actions can be an important and effective means to protect the human rights of the most vulnerable populations, and can have important direct impacts in national and local contexts, with the result that the mobilisation of climate finance to specific countries and communities is more impactful. Moreover, adaptation actions can enhance the socio-economic conditions of vulnerable communities, increasing their resilience and improving the protection of their human rights.

Finally, the Glasgow Climate Pact also recognises the need to ‘scale up financial resources’ of those countries ‘particularly vulnerable to the effects of climate change’. One of the main goals of human rights law is to protect vulnerable groups, including those particularly threatened by climate change. Thus, even when there is no explicit mention of human rights in the cover decisions, there is an emphasis on protecting the most vulnerable countries, demonstrating a non-discriminatory approach that is an essential element of human rights. For instance, paragraph 50 of the cover CMA decision ‘underscores the importance’ of considering developing countries’ needs and priorities in the context of ‘sustainable development and efforts to eradicate poverty’. Nevertheless, addressing vulnerability requires more ambition in mobilising resources from developed to developing countries, especially on adaptation. Even with the financial pledges that doubled adaptation finance, finance for adaptation still does not match that made available for mitigation.

It is necessary to incorporate a human rights-based approach to guide the implementation of climate finance in their respective mitigation and adaptation actions. Access to information, public participation, access to justice, and prior consent are human rights vital to ensuring the just implementation of climate actions. Some climate finance institutions, such as the Asian Development Bank, require parties to incorporate human rights standards in order to secure funding for climate mitigation and adaptation actions.

There is a relevant risk to backing projects that do not comply with human rights standards. Furthermore, developing countries need financial resources to comply with human rights, with the result that consideration must be given to budgeting for the cost of complying with human rights standards in every mitigation or adaptation action. If COP decisions do not explicitly require these standards, the mobilisation of financial resources will not include these costs in their budgets, making it even more difficult for developing countries to generate climate actions based on human rights approaches. Since none of the climate finance decisions at COP26 mentioned human rights, mitigation and adaptation actions may target some climate goals but will not necessarily assure the incorporation of human rights standards in their implementation.

Conclusion

Mobilising climate finance from developed to developing countries is essential for complying with human rights obligations. Vulnerable communities need a human rights-based approach to be at the centre of every action on mitigation or adaptation. Where human rights are overlooked or ignored in climate policy, these communities face greater hardship due to the effects of climate change. COP26 highlighted important concerns over the lack of ambition on climate finance. The 100 billion dollar failure raised concern about the growing financial gap, a problem that has worsened with the ongoing COVID19 epidemic. However, developed country parties at COP26 demonstrated a lack of ambition about mobilising climate finance. The parties also failed to include human rights standards as a necessary component of all mitigation and adaptation actions. Both of these failures increase the vulnerability of the most unprotected and will cause delays in climate action in developing countries, who can least afford them. 

*Lawyer; LLM Global Environment and Climate Change Law, University of Edinburgh; Ph.D. in Law Candidate at the University of Edinburgh