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“Greenhouse gas emissions keep growing. Global temperatures keep rising. And our planet is fast approaching tipping points that will make climate chaos irreversible. We are on a highway to climate hell with our foot on the accelerator.”

Introduction

The significance of the 28th United Nations Climate Change Conference of the Parties (COP28) in the global dialogue on climate action cannot be overstated. Set in Dubai, this gathering of climate leaders, advocates, and civil society representatives marks a pivotal moment in our journey towards a more sustainable future, with Climate Finance topics central to the discussions.

Climate finance, in its essence, embodies the financial streams and investments aimed at supporting mitigation and adaptation activities to counter climate change.

This year, COP28 unfolds against a backdrop of efforts aimed at transforming financial institutions and mobilizing new funds. Significant steps have been made towards this end, including:

  • Updates to multilateral development banks.
  • Discussions of debt restructuring held at the Paris Summit for a New Global Financing Pact.
  • The United Arab Emirates’ announcement of a $4.5 billion fund for clean energy in Africa.

But, despite these efforts, the stark reality remains that global climate finance remains alarmingly inadequate to keep the global temperature rise within the crucial limit of 1.5 degrees Celsius above pre-industrial levels.

The discrepancy highlights an urgent need for increased private sector investment, particularly in the Global South and for adaptation projects. A need that becomes even more evident given the past and current state of climate finance.

The Current State of Climate Finance

As we approach COP28, the state of climate finance reveals a rapidly evolving landscape. In 2021/2022, average annual climate finance flows nearly doubled from 2019/2020 levels, and reached nearly USD 1.3 trillion. This significant increase was mainly due to a surge in mitigation finance, particularly in the renewable energy and transport sectors, accounting for USD 439 billion of the growth. Notably, methodological improvements and new data sources have also contributed substantially, enhancing the tracking and understanding of climate finance flows.

Global trends in climate finance

The distribution of climate finance remains uneven, both geographically and sector-wise. Developed economies continue to mobilize the majority of climate finance, with China, the US, Europe, Brazil, Japan, and India receiving 90% of the increased funds. This concentration highlights significant gaps in climate finance in other high-emissions and climate-vulnerable countries. Additionally, while energy and transport sectors attract the bulk of mitigation finance, industries like agriculture and emerging technologies like battery storage and hydrogen still receive disproportionately less funding.

The adaptation finance, although reaching an all-time high, falls far short of the estimated needs, particularly for developing countries. Moreover, this finance is predominantly driven by public actors, with private sector contributions remaining fragmented.

In summary, while climate finance has grown significantly, challenges in equitable distribution, sector coverage, and the scale of investment remain. These issues underscore the need for a more coordinated and strategic approach to climate finance, a critical topic for discussion and action at COP28.

Climate Finance Challenges

Despite notable progress in climate finance, challenges persist, particularly in equitable distribution and meeting escalating needs. It’s a simple truth that the current investment of 1% of the global GDP, is simply nowhere near enough to support the vast scale of initiatives needed to support the climate actions required to keep us within tolerable benchmarks. Looking forward, the need for climate finance is projected to increase dramatically – By 2030, annual requirements are expected to rise steadily, reaching over $10 trillion each year from 2031 to 2050. This indicates that climate finance must increase at least five-fold annually to mitigate the worst impacts of climate change effectively.

Delay in meeting these investment needs not only escalates the costs associated with mitigating global temperature rise but also with managing its impacts. The economic burden of continued business-as-usual investments includes:

  • Heightened weather-related damages
  • Increased production costs
  • Substantial health expenses.

The geographical concentration of climate finance adds to the challenge, with developed economies, notably East Asia, the Pacific, the US, Canada, and Western Europe, mobilizing the majority of these funds. In contrast, less developed countries, particularly vulnerable to climate change, receive a significantly smaller share of global climate finance, exacerbating existing disparities. The private sector’s contribution, though growing, remains insufficient in scale and pace, particularly in emerging markets and developing economies.

These investments are vital to ensure that those most vulnerable to the impacts of climate change, yet least responsible for its causes, have the resources necessary to mitigate, adapt to, and ultimately overcome the challenges posed by this crisis.

Addressing these challenges necessitates a concerted effort to increase funding, enhance equitable distribution, and foster global collaboration, ensuring that all regions can effectively combat and adapt to climate change.

Opportunities and Innovations

Climate finance at COP28 is a dynamic arena, marked by both challenges and breakthroughs. Innovative market-driven solutions like tradable carbon credits* and debt-for-nature swaps are gaining traction. However, the absence of universally recognized climate finance parameters leads to discrepancies in reported investments. Experts advocate for more equity financing from commercial investors and stress the need for institutional capacity in poor countries to manage these investments.

Accountability in meeting financing promises remains a critical challenge, with wealthier nations often falling short of their responsibilities. COP28 discussions will likely focus on risk-sharing strategies, blending public and private money, and increasing grants to developing countries for local project ownership. Multilateral bank reforms are also on the agenda to attract more private finance for vulnerable communities. The European Union’s Sustainable Finance Disclosure Regulation, implemented in 2023, is a step towards addressing greenwashing in investor markets.

Overall, COP28 presents an opportunity to reshape climate finance, emphasizing transparency, equity, and innovation to meet the urgent needs of a warming world.

The Role of Governments and Private Sector

At COP28, the evolving roles of governments and private sectors in climate finance will take center stage, and reflect a shift from traditional paradigms that highlights the increasing emphasis on voluntary contributions, while moving away from the erstwhile model of historical financial responsibilities of developed nations towards developing ones. This redefinition marks a notable departure from longstanding multilateral frameworks, spotlighting equity concerns in global climate finance.

Discussions at COP28 will focus on the need for reinvigorating trust and momentum in international climate processes. The Global Stocktake (GST) at COP28 underscores this, revealing a significant shortfall in current efforts to limit global warming. The summit must serve as a focal point for negotiating new financing arrangements, particularly the establishment and operationalization of the new Loss & Damage Fund. This fund represents a critical juncture in climate finance, with developed countries advocating for voluntary contributions despite pressures from developing nations for acknowledgment of historical financial responsibilities.

The contentious nature of funding sources for the Loss & Damage Fund underscores broader debates about the future financial obligations under climate agreements. Despite the insistence of developing countries on acknowledging historical responsibility, the final agreements lean towards voluntary support, indicating a potential weakening in the differentiation between the contributions of developed and developing countries. This outcome raises concerns about the adequacy and operationalization of the Fund.

These negotiations and the decisions made at COP28 will have profound implications on the future trajectory of international climate finance, setting the tone for how both government policies and private sector investments will shape our collective response to the climate crisis.

Conclusion

In conclusion, COP28 represents a watershed moment in the evolution of climate finance. The conference is not just a forum for discussion, but a crucible for action, where the urgency of climate change meets the complexities of global finance.

As the world grapples with the challenges of equitable distribution, scaling of investments, and fostering collaboration, the roles of governments and private sectors are undergoing a transformative shift. Embracing this change requires a commitment to innovation, transparency, and equity. The decisions and strategies forged at COP28 will be critical in shaping a sustainable, resilient world, where finance is not just a tool for growth, but a beacon of hope for a planet facing an existential threat. As we look ahead, the spirit of COP28 must galvanize us to create a financial framework that is not only robust and dynamic, but also inclusive and responsive to the needs of those most vulnerable to climate change.

(*) – For an in depth review on the evolution of emissions, climate impacts, and human activities exacerbating the problem, as well as how Carbon Credits can be part of the solution, check out our latest report here.

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Photo by Markus Spiske on Unsplash

Carbon Footprint

McKibben opts for a small-tent climate movement

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A few months ago I went to a climate change forum at the Center for Brooklyn History. The panel I attended, “Confronting Climate Change: Understanding Deniers,” featured the prominent climate activist, Bill McKibben.

Bill McKibben. Courtesy https://billmckibben.com/.

I was curious to hear McKibben’s take on climate change deniers. I don’t regard the true deniers as a big problem – they’re only 11-15% of our country, according to most polls. Rather, I wondered if McKibben would label as “climate deniers” people who agree that climate change is a significant problem but disagree with his framing and his proposed solutions. I have worked for decades on energy and climate matters as an energy lawyer. Now, more than ever, I believe that to address climate change we need to build a big tent.

In the Q&A I tested where McKibben is on this by asking if he would label as a climate denier someone who subscribes to the main tenets of climate change science yet holds that natural gas has a role to play as a bridge fuel. (Our exchange starts at 1:12:45 of the video.)

This could have been a chance for McKibben to make clear that such a view isn’t climate denialism, even if he feels it’s misguided. But he punted, saying “I don’t care whether they’re deniers or not.” For good measure, he threw in his long-standing refrain that swapping coal for natural gas makes climate change worse, despite coal’s far higher carbon content per unit of energy.

674-MW methane-powered generating station, Salem, MA.

As you can hear in the recording, McKibben’s claim that gas is worse than coal draws on the work of Cornell scientist Robert Howarth. Yet McKibben didn’t mention that Howarth’s work is controversial and disputed by many scientists. The crux of the dispute is whether methane’s impact on warming should be measured with a 20-year or 100-year time frame.

Methane is a relatively short-lived greenhouse gas, with a lifetime of around 10 years, versus the 100-year life applicable to carbon dioxide. But each ton of methane is far more potent while in the atmosphere, trapping roughly 100 times as much heat as a ton of CO2. These cross-cutting facts about atmospheric methane — shorter life but greater potency than CO2 — have resulted in two opposing camps: one insisting on a 20-year timeframe for greenhouse gas accounting, the other adhering to the established 100-year frame. This matters because with a 20-year timeframe, generating electricity with natural gas (which, chemically speaking, is essentially all methane) is more damaging to climate than coal-fired electricity.

McKibben blew past this dispute. To hear him at the Center for Brooklyn History, one would have no inkling that there’s an active disagreement over which timeframe to use, that there are staunch climate activists who favor the 100-year time frame, and that the Intergovernmental Panel on Climate Change  (IPCC) generally uses the 100-year timeframe.

McKibben’s latest (2025) book. Published by W.W. Norton & Company.

McKibben also insisted that a discussion about natural gas’s potential role in mitigating climate change as a replacement for coal is irrelevant because solar “is now our cheapest resource.” McKibben’s claim, of course, suffuses “Here Comes the Sun,” his 2025 book that extols solar power as the cheapest solution for all of our energy needs. But this too is questionable, because it’s based on cost comparisons between solar farms and natural gas power plants (or nuclear power plants) that fail to consider that electricity supply and delivery is a complex system of wires and plants rather than individual power plants. Based on his remarks, McKibben is choosing to ignore studies such as the comprehensive 2025 report from the Clean Air Task Force that concluded that plant-level cost comparison “is a good metric to track historical technology cost evolution [but] is not an appropriate tool to use in the context of long-term planning and policymaking for deep decarbonization.” And the task force is not alone in finding that when electricity is treated as a system, solar loses its place as the cheapest low-carbon resource.

The dogmatism McKibben displayed at the Brooklyn meeting was unfortunate. We’re in a time when efforts to combat climate change are in retreat. A unified front is required to turn the tide. Instead of doubling down on absolutist positions, activists like McKibben who seem convinced that the solution to climate change is all-renewables, end of discussion, should be seeking common ground with others who want climate action but believe that nuclear power and natural gas must also play a role.

NYC Climate March, Sept 17, 2023. Photo: C. Komanoff.

Climate change activists need to build a bigger tent, rather than call anyone who disagrees with their positions a climate change denier. It is striking that McKibben stuck to his guns after saying in the same talk that the most important goal for everyone right now is to help climate change realists win more House and Senate seats in this year’s midterms. As some have noted, an absolutist position on natural gas appears less likely to achieve that win and politicians are following that advice.

Will McKibben evolve? He has demonstrated that he knows how to build a national climate movement centered around issues like divestment. Given the current political situation, he should focus on building an even bigger tent by welcoming all of the 85% who believe that we need to address climate change but do not agree with his ideological positions.

Rich Miller is an energy lawyer who has worked for a variety of stakeholders and now gives walking tours in lower Manhattan on the history of electricity. 

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Rebranding ‘Balcony Solar’ as ‘Guerrilla Solar’ won’t lift its climate value.

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Image generated with Claude. Why have we juxtaposed a bicycle with balcony solar? Read on.

First it was Plug-In Solar. Then it was Balcony Solar. Now it’s Guerrilla Solar, at least according to Inside Climate News, which yesterday proclaimed that The ‘Guerrilla Solar’ Era Has Arrived.

“It,” of course, is Modular solar panels. They’re the hot new photovoltaic solution: cheap enough to buy at Home Depot, easy to hang or prop to catch maximum rays, and small enough to fit on a balcony (if you’ve got one) and plug into your “home grid.” But, alas, too meager a generator of electricity to be more than a bit player in decarbonizing most U.S. homes.

How do I know? I’ve done the math.

A standard, lower-end 220-watt balcony solar array will produce 337 kilowatt-hours a year, or 28 kWh a month averaged over the course of a year. That’s for a 220W unit measuring 3.5 feet by 3.5 feet. (220W x 1/1000 x 17.5% x 8760 hours per year = 337 kWh. Calculation assumes a 17.5% full-year capacity factor, which is arguably generous for New York, where I live. )

Our balcony solar mashup. Top: an install in Germany. Bottom: Home Depot advert.

A typical U.S. home consumes 10,500 kWh a year, or 28 to 29 kWh per day, says Solartech, drawing on U.S. Energy Information Administration data. That puts a home’s daily power needs on par with a balcony solar unit’s monthly output. In effect, once each month the balcony array gifts a homeowner or renter a bit more than day’s full complement of electricity. And earth’s atmosphere gets the same respite: a 3 percent reduction in carbon emissions caused by the home’s electricity usage.

(The 3 percent figure could also be calculated directly by dividing 337 kWh per year of solar production by 10,500 kWh per year to run the home. For bigger or smaller arrays, just prorate your assumed wattage by my 220W; for 440W, say, double my figures.)

Balcony Solar metrics

Why write about balcony solar if it’s so inconsequential? CTC’s mission includes puncturing would-be climate balloons before they ascend too far. In the same vein, we practice quantification to make clear what does and doesn’t move the climate needle. (More on that further below.)

The best way to depict balcony solar’s climate value is to express it in terms of tangible metrics. We’ve selected two. Both assume the basic, lower-end PV array I assumed at the top: a 3.5 foot-square array whose peak output is 220 watts.

1. It would take 50 million 220W balcony solar units (bsu’s) to restore the climate benefit we destroyed in 2020-2021 when we shut the high-performing Indian Point nuclear power plant 32 miles from Midtown Manhattan.

2. A single person cutting back their driving by a mile a day would provide the same climate benefit over the course of a year as a single 220W bsu.

(Calculations in sidebar. Now you know why we led with images of an urban dweller as cyclist and balcony solar user.)

Yes, it’s dense — as befits a sidebar. The numbers tell a story. Follow the color co-ordination.

Ponder that: It would take fifty million smallish bsu’s to level up to the fossil fuel carbon emissions that Indian Point was keeping at bay by supplying the New York City area year in and year out with abundant carbon-free power. Deploying that many balcony solar units would entail 10 bsu’s for each of the 5 million households in the MTA’s service territory. (The Metropolitan Transportation Authority provides subway, bus and commuter rail transit in the five boroughs and seven suburban counties.) Or, if those same households upgraded to 1100-watt bsu’s, collectively they would still make up only half of the lost Indian Point power.

The second comparison, involving driving, is perhaps trickier to grasp but more interesting, since it relates to people’s behavior. Living differently isn’t part of public discourse, at least not in the USA, and especially when what’s being served up is using less. But “reducing,” as we might call it (remember “Reduce, Reuse, Recycle”? or, “Insulate, then Insolate”?) is just as potent for cutting emissions as switching to renewables — even more so when the reducing means driving less, considering the multitude of benefits that accrue from diminishing cars’ imprints on our communities. Still, staying on topic: driving just one fewer mile per day brings about the same shrinkage in carbon emissions as deploying one 220W solar array.

What Balcony Solar boosters are really saying

To be fair, our friends at Inside Climate News and, yes, The New York Times appear to be trying to modulate their balcony solar enthusiasm.

ICN‘s Dan Gearino, whom we cited up front, said he looked to Germany, the birthplace of balcony solar, to see if the units made sense for U.S. households. His takeaway: “It may make more sense financially to spend the cost of plug-in solar on insulation, air sealing or other basic measures to reduce energy use.” Hooray: insulate before you insolate.

Gearino helpfully interviewed renewables guru (and U.S. emigré) Craig Morris, who currently heads Germany’s plug-in solar trade association, Bundesverband Steckersolar. To Morris, balcony solar’s main advantages are that it provides power without taking up land, and that it affords people a way to “become participants in the transition to clean energy.” Behold, guerrilla solar. That, in turn, bolsters “the political consensus that supports the transition.” But Morris also made clear that widespread adoption of plug-in solar would only meet “about 2 percent of Germany’s electricity demand.”

Morris’s “about 2 percent” feels right for Germany. But not for the U.S., where widespread adoption of virtually any individual carbon alternative seems forever out of reach, and where the energy pie is so much larger — think giant fridges, freezers for beer, steroidal homes bursting with piles of powered toys, not to mention industrial and institutional electricity use that Morris correctly excluded from his figure.

Don’t forget to micro-dose. NYT headline + image for David Wallace-Wells’ guest essay (see text). Image by Rui Pu.

Both Gearino and Morris seem more measured than climate journalist Robinson Meyer, founding editor of Heatmap and frequent contributor to The Times, where he wrote about balcony solar in mid-June.

“New zero-carbon power kits will allow Americans to make their own energy choices,” declares the callout to the print version of Meyer’s NYT guest essay, The Tiny Solar Panel That Could Change America. (The even more expansive print headline invites us to “Forget Roofs. Backyard Solar Is the Next Frontier.”)

Wallace-Wells is of two minds. He calls balcony solar “a small way that apartment- and condo-dwelling Americans can take ownership of their energy choices and cut down their pollution on the margins.” No quarrel there, thanks to his qualifiers “small” and “on the margins.” Earlier, though, he opines that balcony solar units “have the potential to change how Americans understand and consume energy,” But read further and you’ll again see Wallace-Wells cautioning that “Balcony solar will play one small role in [the] drama” of transiting to the new world of clean, abundant energy.

Any such caveats are welcome these days, amid widespread solar hoopla. Still, it doesn’t seem to be in Wallace-Wells’ toolkit — or that of Inside Climate News and other mainstream climate journalists — to tutor their audiences as to the  true limits of balcony solar and other panaceas. Just like it wasn’t in their field of vision a decade ago to lay out the true stakes of shutting Indian Point as Riverkeeper was singing its siren song.

What’s Next for NY Balcony Solar

Meantime, as Canary Media reported recently (and helpfully), New Yorkers concerned with climate and affordability are waiting for NY Gov. Kathy Hochul to sign the recently passed SUNNY (Solar Up Now New York) Act legalizing balcony and other plug-in solar. It would be head-spinning (and politically suicidal) if she didn’t, given near-universal support ranging from Con Edison to DSA Assembly Member Emily Gallagher, who told Canary Media, “This is the most popular bill I’ve [ever] worked on.”

My guess is that Hochul is waiting for the right moment, and perhaps the right “package,” that can advance and not undercut her push to launch five large new nuclear power plants around the state — one to be built by the public New York Power Authority, the others to be constructed and operated privately. A little bit of math, a la what we offered here a la Indian Point, might help her out.

The governor also must manage the veritable hot potato of her deferred implementation of the landmark 2019 Community Leadership and Climate Protection Act. She might do well to consider jettisoning the act’s unwieldy cap-and-invest centerpiece in favor of a straight-up carbon tax (with the revenues distributed pro rata to the state’s households) in its place. That, far more than balcony (or guerrilla) solar, could blow open the door to the “innovations and technologies we cannot yet imagine” that Wallace-Wells fantasized about in his Times essay.

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Carbon Footprint

The new SBTi Corporate Net-Zero Standard: what it means for business

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On 11 June 2026, the Science Based Targets initiative (SBTi) published the most substantial revision of its flagship corporate framework since its introduction. The SBTi Corporate Net-Zero Standard Version 2.0 takes effect on 1 February 2027 and reshapes the way companies approach their net-zero targets.

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