‘Blended finance’ took centre stage at Cop28, with the Green Climate Fund among its supporters. But there are still major problems with the concept that must be addressed before considering any further expansion.
Blended finance is a combination of public concessional finance (i.e. with more generous terms than the market) with private or public resources. The the aim of it is to ‘mobilise’ development finance from other actors.
But, as Eurodad’s new joint report with ActionAid shows, it can perpetuate climate coloniality through the extraction of renewable resources from the global south to power Green New Deals in the global north.
Financial actors outside of recipient countries are favoured in these projects. The largest recipients of blended finance for climate action have been corporates and project developers, who got four-fifths of the finance throughout between 2019 and 2021.
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A report by Follow the Money shows that big climate-based funds from the global north charge extractive commissions in countries which are in dire need of resources, further impoverishing their economies.
The high salaries and commissions of such funds are a problematic example of who is actually profiting from the emerging privatised green climate agenda in global south countries.
New debt
Furthermore, blended finance often brings new debt, which needs to be repaid, even if the beneficiaries are provided with softer terms than purely commercial loans.
This can contribute towards recipient countries’ indebtedness. A lack of transparency around projects, and poor accountability to the communities they are supposed to serve, are also pressing problems.
Another issue is the limited amount of private finance currently mobilised by blended finance.
In 2021, Development Finance Institutions financed long-term projects totalling US$13 billion supported by blended concessional finance.
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Of this, the total volume of private finance mobilised was approximately US$5 billion, while the rest was either from the institutions’ own-account ($5 billion) or from other public sources.
Zambian example
Many of these issues were evident in Zambia’s Scaling Solar programme, an initiative launched in 2015 by the International Finance Corporation (IFC) – the World Bank Group’s private sector arm.
To implement a solar energy project in the country, the investors received subsidies which ultimately raised the project’s costs to the public.
In fact, estimates show that around US$3.50 of public international finance was used to attract each dollar of private finance.
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If governments are to continue promoting blended climate finance, they need to ensure that public money could not have achieved better impacts if spent in alternative, cost effective ways. Improvements to transparency are also crucial.
Ultimately, climate change has been caused by the global north’s extraction and exploitation of natural resources. Blended finance must not be seen as a substitute for delivering on existing climate finance commitments and reducing emissions in the global north.
Farwa Sial is senor policy and advocacy officer at the European Network on Debt and Development (Eurodad)
The post Blended finance can perpetuate climate colonialism appeared first on Climate Home News.
Climate Change
Hurricane Helene Is Headed for Georgians’ Electric Bills
A new storm recovery charge could soon hit Georgia Power customers’ bills, as climate change drives more destructive weather across the state.
Hurricane Helene may be long over, but its costs are poised to land on Georgians’ electricity bills. After the storm killed 37 people in Georgia and caused billions in damage in September 2024, Georgia Power is seeking permission from state regulators to pass recovery costs on to customers.
Climate Change
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Gov. Mikie Sherrill says she supports both AI and lowering her constituents’ bills.
With New Jersey’s cost-of-living “crisis” at the center of Gov. Mikie Sherrill’s agenda, her administration has inherited a program that approved a $250 million tax break for an artificial intelligence data center.
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Climate Change
Curbing methane is the fastest way to slow warming – but we’re off the pace
Gabrielle Dreyfus is chief scientist at the Institute for Governance and Sustainable Development, Thomas Röckmann is a professor of atmospheric physics and chemistry at Utrecht University, and Lena Höglund Isaksson is a senior research scholar at the International Institute for Applied Systems Analysis.
This March scientists and policy makers will gather near the site in Italy where methane was first identified 250 years ago to share the latest science on methane and the policy and technology steps needed to rapidly cut methane emissions. The timing is apt.
As new tools transform our understanding of methane emissions and their sources, the evidence they reveal points to a single conclusion: Human-caused methane emissions are still rising, and global action remains far too slow.
This is the central finding of the latest Global Methane Status Report. Four years into the Global Methane Pledge, which aims for a 30% cut in global emissions by 2030, the good news is that the pledge has increased mitigation ambition under national plans, which, if fully implemented, could result in the largest and most sustained decline in methane emissions since the Industrial Revolution.
The bad news is this is still short of the 30% target. The decisive question is whether governments will move quickly enough to turn that bend into the steep decline required to pump the brake on global warming.
What the data really show
Assessing progress requires comparing three benchmarks: the level of emissions today relative to 2020, the trajectory projected in 2021 before methane received significant policy focus, and the level required by 2030 to meet the pledge.
The latest data show that global methane emissions in 2025 are higher than in 2020 but not as high as previously expected. In 2021, emissions were projected to rise by about 9% between 2020 and 2030. Updated analysis places that increase closer to 5%. This change is driven by factors such as slower than expected growth in unconventional gas production between 2020 and 2024 and lower than expected waste emissions in several regions.
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This updated trajectory still does not deliver the reductions required, but it does indicate that the curve is beginning to bend. More importantly, the commitments already outlined in countries’ Nationally Determined Contributions and Methane Action Plans would, if fully implemented, produce an 8% reduction in global methane emissions between 2020 and 2030. This would turn the current increase into a sustained decline. While still insufficient to reach the Global Methane Pledge target of a 30% cut, it would represent historical progress.
Solutions are known and ready
Scientific assessments consistently show that the technical potential to meet the pledge exists. The gap lies not in technology, but in implementation.
The energy sector accounts for approximately 70% of total technical methane reduction potential between 2020 and 2030. Proven measures include recovering associated petroleum gas in oil production, regular leak detection and repair across oil and gas supply chains, and installing ventilation air oxidation technologies in underground coal mines. Many of these options are low cost or profitable. Yet current commitments would achieve only one third of the maximum technically feasible reductions in this sector.
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Agriculture and waste also provide opportunities. Rice emissions can be reduced through improved water management, low-emission hybrids and soil amendments. While innovations in technology and practices hold promise in the longer term, near-term potential in livestock is more constrained and trends in global diets may counteract gains.
Waste sector emissions had been expected to increase more rapidly, but improvements in waste management in several regions over the past two decades have moderated this rise. Long-term mitigation in this sector requires immediate investment in improved landfills and circular waste systems, as emissions from waste already deposited will persist in the short term.
New measurement tools
Methane monitoring capacity has expanded significantly. Satellite-based systems can now identify methane super-emitters. Ground-based sensors are becoming more accessible and can provide real-time data. These developments improve national inventories and can strengthen accountability.
However, policy action does not need to wait for perfect measurement. Current scientific understanding of source magnitudes and mitigation effectiveness is sufficient to achieve a 30% reduction between 2020 and 2030. Many of the largest reductions in oil, gas and coal can be delivered through binding technology standards that do not require high precision quantification of emissions.
The decisive years ahead
The next 2 years will be critical for determining whether existing commitments translate into emissions reductions consistent with the Global Methane Pledge.
Governments should prioritise adoption of an effective international methane performance standard for oil and gas, including through the EU Methane Regulation, and expand the reach of such standards through voluntary buyers’ clubs. National and regional authorities should introduce binding technology standards for oil, gas and coal to ensure that voluntary agreements are backed by legal requirements.
One approach to promoting better progress on methane is to develop a binding methane agreement, starting with the oil and gas sector, as suggested by Barbados’ PM Mia Mottley and other leaders. Countries must also address the deeper challenge of political and economic dependence on fossil fuels, which continues to slow progress. Without a dual strategy of reducing methane and deep decarbonisation, it will not be possible to meet the Paris Agreement objectives.
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The next four years will determine whether available technologies, scientific evidence and political leadership align to deliver a rapid transition toward near-zero methane energy systems, holistic and equity-based lower emission agricultural systems and circular waste management strategies that eliminate methane release. These years will also determine whether the world captures the near-term climate benefits of methane abatement or locks in higher long-term costs and risks.
The Global Methane Status Report shows that the world is beginning to change course. Delivering the sharper downward trajectory now required is a test of political will. As scientists, we have laid out the evidence. Leaders must now act on it.
The post Curbing methane is the fastest way to slow warming – but we’re off the pace appeared first on Climate Home News.
Curbing methane is the fastest way to slow warming – but we’re off the pace
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