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developing countries
2024 Still on Track to Be First Full Year That Breached 1.5°C
"No surprise at all, but still shocking news. Will temperatures drop below 1.5°C again? I have my doubts," said one climate scientist.
Dec 09, 2024
Data from the first 11 months of 2024 reaffirmed that the globe is set to pass a grim milestone this year, according to the European Union's earth observation program.
The E.U.'s Copernicus Climate Change Service (C3S) said in a report Monday that November 2024 was 1.62°C above the preindustrial level, making it the 16th month in a 17-month stretch during which global-average surface air temperature breached 1.5°C. November 2024 was the second-warmest November, after November of last year, according to C3S.
"At this point, it is effectively certain that 2024 is going to be the warmest year on record and more than 1.5°C above the pre-industrial level," according to a Monday statement from C3S. With data for November in hand, the service estimates that global temperature is set to be 1.59°C above the pre-industrial level for 2024, up from 1.48°C last year.
C3S announced last month that 2024 was "virtually certain" to be the hottest year on record after October 2024 hit 1.65°C higher than preindustrial levels.
"This does not mean that the Paris Agreement has been breached, but it does mean ambitious climate action is more urgent than ever," said Samantha Burgess, deputy director of C3S.
Under the 2015 Paris agreement, signatory countries pledged to reduce their global greenhouse gas emissions with the aim of keeping global temperature rise this century to 1.5ºC, well below 2°C above preindustrial levels. According to the United Nations, going above 1.5ºC on an annual or monthly basis doesn't constitute failure to reach the agreement's goal, which refers to temperature rise over decades—however, "breaches of 1.5°C for a month or a year are early signs of getting perilously close to exceeding the long-term limit, and serve as clarion calls for increasing ambition and accelerating action in this critical decade."
Additionally, a recent paper in the journal Naturewarned of irreversible impacts from overshooting the 1.5ºC target, even temporarily.
Climate scientist and volcanologist Bill McGuire reacted to the news Monday, saying: "Average temperature for 2024 expected to be 1.60°C. A massive hike on 2023, which itself was the hottest year for probably 120,000 years. No surprise at all, but still shocking news. Will temperatures drop below 1.5°C again? I have my doubts."
The update comes on the heels of COP29, the most recent U.N. climate summit, which many climate campaigners viewed as a disappointment. During the summit, attendees sought to reach a climate financing agreement that would see rich, developed countries contribute money to help developing countries decarbonize and deal with the impacts of the climate emergency. The final dollar amount, according to critics, fell far short of what developing countries need.
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'Unacceptable': Campaigners Decry Climate Finance Failures as COP29 Enters Final Hours
"By the end of the UN climate talks, we must see at least a trillion dollars in public finance on the table," said one campaigner.
Nov 21, 2024
As the clock winds down at the UN climate summit taking place in Baku, Azerbaijan, green groups are sounding the alarm Thursday following the release of a draft climate finance deal that they say falls short of what's needed to support climate-vulnerable countries and adequately address the planetary crisis.
"The clock is ticking. COP29 is now down to the wire," said UN Secretary-General António Guterres on Thursday, just a day before the two-week conference is set to conclude.
Finance has been a major focus of this year's summit. Under the 20125 Paris Agreement, countries are supposed to come up with a "new collective quantified goal"—or NCQG in COP jargon—that will govern how much money from rich countries will be transferred to developing countries in order to help the latter cut their emissions and adapt to climate change.
No equivalent climate finance arrangement has been agreed to before, though countries at the summit broadly agree that richer countries, who are responsible for much of historic CO2 emissions, should help poorer and more climate-vulnerable nations deal with natural disasters and their transition to green energy.
The draft text that dropped early Thursday, however, was received poorly.
Oxfam International's climate justice lead, Safa’ Al Jayoussi, said "COP29 must do more than simply repeat the same threadbare promises. Rich countries have spent decades now stalling and blocking genuine progress on climate finance. This has left the Global South suffering the most catastrophic consequences of a climate crisis they did not create. The draft text scandalously misses the crucial element of declaring a clear public commitment to a new climate finance goal."
Instead of specifying how much annually should be funneled towards developing countries via climate finance, the NCQG draft text displayed "X" in place of any actual figures or monetary commitments.
Oscar Soria, a director at the Common Initiative think tank, told the Guardian: "The negotiating placeholder 'X' for climate finance is a testament of the ineptitude from rich nations and emerging economies that are failing to find a workable solution for everyone."
"By the end of the UN climate talks, we must see at least a trillion dollars in public finance on the table," added Andreas Sieber, 350.org associate director of policy and campaigns. Economists told the summit attendees last week that developing countries need at least $1 trillion annually by 2030 to deal with climate change.
A specific and shared concern from campaigners was the draft text's inclusion of carbon market schemes as a way "to scale up" climate finance. While the draft promotes "high-integrity voluntary carbon markets" and other "instruments that mobilize new sources of climate finance and private finance" as part of the equation, critics have long warned that these market-based approaches are nothing but false solutions designed to benefit corporate investors, wealthier nations, and the fossil fuel industry itself.
"Labelling carbon credits as climate finance—which they are unreservedly not—should be axed from the text or risk creating a dangerous escape route for polluters. The same goes for explicitly allowing investments in fossil fuel infrastructure. This is fundamentally incompatible with the goals of the Paris Agreement," said Laurie van der Burg, Oil Change International's global public finance manager, in response to the draft text.
While Article 6 of the Paris Agreement allows for the international transfer of carbon credits, groups warned the changes in the COP29 draft would dramatically strengthen the foothold of such schemes.
"Shockingly, COP29 is set to agree to carbon markets that are even worse than the voluntary carbon markets," said Kirtana Chandrasekaran, a climate campaigner with Friends of the Earth International. "We know these markets have failed. They are riddled with fraud and they do not reduce emissions or provide finance. Communities everywhere and, in fact, the planet itself is on the line."
Without addressing these concerns, advocates of a meaningful deal at the conference say COP29 is headed for failure.
As 350.org's Sieber argued, paying the "historic debt that rich countries owe will enable all nations to take action on climate at home and meet the collective goal agreed last year at COP28—to triple renewable energy, and transition away from fossil fuels. Right now, we only see cowardice and a void in leadership, ignoring the undeniable science that we can't keep polluting our planet with dirty oil, gas and coal."
"The time to course correct is now—the European Union and other rich countries must stop playing poker with the planet and humankind's future at stake," Sieber added. "It's time to put their cards on the table and commit real, transformative funding—no more excuses, no more delays, it's time."
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The US Can Make Billions Available to Ukraine at No Cost to Itself
Indebted middle-income countries like Ukraine should not be expected to subsidize IMF lending when better alternatives exist. And the U.S. has more than enough influence to help the international lending body change course on these counterproductive policies.
Oct 04, 2024
The United States has a chance to save Ukraine billions of dollars, and at no cost to U.S. taxpayers, by pushing for an end to the unfair and harmful surcharge policy of the International Monetary Fund (IMF).
The IMF is currently reviewing this surcharge policy, which hits Ukraine—and other highly indebted borrowers like Kenya, Ecuador, Argentina, Barbados, and Egypt—with additional charges on top of standard interest and service fees. Human rights and development experts consider surcharges to be counterproductive and contrary to international human rights law. The IMF should take this opportunity to permanently end its surcharge policy for highly indebted borrowers.
Surcharges are penalty fees levied on middle-income countries with high levels of IMF debt. There are two types of surcharges exacted by the IMF: level-based surcharges and time-based surcharges. Level-based surcharges add 2 percentage points in fees to a country’s outstanding IMF credit when it surpasses 187.5% of a country’s quota to the Fund. Time-based surcharges add another percentage point of fees when a country’s IMF debt exceeds this threshold for over 36 or 51 months, depending on the lending facility. Some countries, including Ukraine, are paying both surcharges, amounting to an additional 3% points of fees.
In Ukraine’s case, surcharges will add nearly $3 billion to the war-ravaged country’s debt burden over the next decade even as it needs an estimated $9.5 billion in emergency financing for recovery and reconstruction just this year.
The IMF and Treasury Secretary Yellen have previously claimed that surcharges incentivize timely repayment to the IMF. However, countries are struggling to repay the IMF due to exogenous shocks, not a lack of appropriate incentives. Surcharges are counterproductive as they push countries facing crises—including war, the COVID-19 pandemic, and climate disaster —further into debt. It is no coincidence that, prior to the pandemic, only eight countries were paying IMF surcharges; today 23 countries are paying these fees.
In Ukraine’s case, surcharges will add nearly $3 billion to the war-ravaged country’s debt burden over the next decade even as it needs an estimated $9.5 billion in emergency financing for recovery and reconstruction just this year. Experts say efforts to relieve Ukraine’s debts could change the course of the war. Ukraine recently reached a much-needed deal to restructure its debts. Keeping surcharges in place would diminish the benefits of this restructuring, as it sends $3 billion that could be spent on recovery, reconstruction, and defense back to the IMF. Surcharges have already cost Ukraine $621 million between 2018 and 2023. Discontinuing surcharges would save Ukraine billions of dollars in its hour of need.
Following intense criticism of surcharges by leading economists, developing countries, and U.S. members of Congress, the IMF announced earlier this year that it would carry out a review of the controversial policy. Following consultations with IMF stakeholders— in particular, the US Treasury Department—the Fund is expected to announce the results of its review, and any recommendations of changes to the policy, before the IMF’s Annual Meetings in October. It’s worth noting that the IMF has previously recognized the profoundly harmful and counterproductive consequences of similar past policies, moving to discontinue them in 1974, 1981, and 1992.
Yet, among wealthy countries, there appears to be resistance to terminating, or even significantly reforming, the current surcharge policy. It is particularly troubling that much of this resistance appears to be rooted in the hope that the income from surcharges can supplement projected funding shortfalls for the IMF’s Poverty Reduction and Growth Trust (PRGT) facility, which offers low-income countries interest-free and concessional loans. The IMF, the US Treasury, and other observers have previously discussed surcharges as a source of income for IMF lending via the PRGT.
Among wealthy countries, there appears to be resistance to terminating, or even significantly reforming, the current surcharge policy.
Post-pandemic funding needs have depleted PRGT resources and the program is in need of replenishment. It may be necessary for the IMF to increase its lending through the PRGT in response to the growing needs of developing countries. However, squeezing highly indebted countries such as Ukraine to do so would be a perverse solution. These same middle-income countries have also largely been left out of pandemic-related debt relief initiatives and are struggling to recover under the weight of a failing international financial architecture. Funding for the PRGT shouldn’t come at the expense of these countries.
There are better and more effective alternatives to relying on surcharges to fund the PRGT. These include: donations from the U.S. and other advanced economies, gold sales, and changes to the IMF’s internal accounting practices. Surcharges are infinitesimal compared to the IMF’s much-vaunted $1 trillion lending firepower. The IMF has vast reserves of gold that remain largely undervalued. These gold reserves are currently valued at the 1960s rate of approximately $47 per ounce. Valued at current market rates of approximately $2,556 per ounce, the IMF’s gold reserves would be worth $228 billion. The IMF could sell a portion of these reserves or adopt mark-to-market accounting practices to fund the PRGT.
Indebted middle-income countries like Ukraine should not be expected to subsidize PRGT lending when better alternatives exist. A permanent end to surcharges would eliminate an increasingly significant barrier to sustainable recovery in many developing countries. Given that the U.S. holds a de facto veto over IMF policy changes, the stance of the U.S. Treasury Department will be instrumental. Refusing to change the surcharge policy today would be a major missed opportunity for Secretary Yellen and the world.
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