Climate Finance, Food Security, and Cracks in the Transatlantic Alliance at COP28: Recommendations for the Global Stocktake

This blog post is part of the Nexus25 project, a joint initiative of the Istituto Affari Internazionali and the Center for Climate and Security, focused on sustainable multilateralism, and supported by Stiftung Mercator

In the runup to the 28th Conference of the Parties (COP28) to the UN Framework Convention on Climate Change (UNFCCC), climate change’s role in complex security and humanitarian crises is continuing to challenge the capacity and ambition of the international community. As perhaps the most contentious issue in global climate action, climate finance is rightly a top priority for advocates and world leaders in Dubai.

While most member states recognize that climate change is driving, and will continue to drive, migration and food insecurity, and is disproportionately impacting marginalized populations, climate finance is a glaring gap in their policies and plans to respond to the resulting threats. The massive injection of funding required and the domestic politics that continue to stymie investment from world leaders is a critical barrier to meeting countries’ emissions and resilience goals, or Nationally Determined Contributions (NDCs). In this context, we recommend three key priorities in the leadup to COP28: finding new approaches to climate finance; improving messaging on the urgency of the climate threat; and repairing transatlantic relations to show leadership.

Why gaps in climate finance are a critical problem

Climate finance, a catch-all term for financing to help developing countries cut emissions and build resilience, is central to achieving the targets outlined by the Paris Agreement. For some COP28 leaders, meeting these targets will require a complete overhaul of their economic models – all with limited resources and state capacity. The international community has recognized the need to support large-scale industry and infrastructure investments, particularly in the Global South. However, past commitments to mobilize $100 billion per year by 2020 have continued to fall short, and traditional sources of funding to low-income nations, such as the Green Climate Fund and International Development Association funds, are nearly depleted. Concerningly, while the UNFCCC estimates that $6 trillion per year is needed for developing countries to meet half of their NDCs, more comprehensive assessments calculate 2023–2030 needs at closer to $9 trillion per year. And recent analysis indicates that the ten countries most affected by climate change between 2000 and 2019 are receiving less than 2% of total contributions. 

These gaps are a warning sign for the international community. After narrowly avoiding the collapse of the proposed ‘loss and damage fund’ over objections to it being housed at the World Bank, developed country delegations are now facing pressure to support their rhetoric with concrete climate finance contributions. At the same time, developing countries need more support than ever, as their climate commitments are largely contingent on cheap finance and accessible recovery funds. Critics are rightfully concerned about whether potential ‘voluntary contributions’ to the new loss and damage fund will materialize – and whether the World Bank is agile enough to respond to climate crises like extreme flooding or unexpected droughts. 

These debates around COP28 come at a critical moment for the transatlantic alliance. The United States, European Union (EU), and other Western allies have been aligned on climate action in recent years, but there are cracks in this commitment, particularly when it comes to making the immense investments necessary to keep warming below 1.5 degrees Celsius. In the UK, an economic downturn and pre-election policymaking from the Conservative Party is likely to complicate their ambitious Net Zero commitments. One of the largest climate finance providers, the EU, is expected to push for fossil fuel phaseouts and make substantial contributions to the new loss and damage fund at COP28, but faces economic strain and internal division as its members respond to increased migration flows and Russia’s war in Ukraine. And most concerningly, despite historic domestic investment in green industries through the Inflation Reduction Act (IRA), Congressional Republicans have committed to blocking President Biden’s $11 billion climate finance pledge. These domestic pressures are reflected by cracks in the transatlantic alliance itself. While leaders in the US and Europe broadly agree on climate finance, their policy solutions often diverge, as seen in transatlantic disputes over the IRA’s more protectionist elements. And longstanding pain points like relations with China, tech policy, and democratic backsliding have the potential to influence consensus moving forward – particularly after next year’s consequential U.S. elections. 

Unfortunately, other nations have proven unable – or unwilling – to fill these gaps. Recent analysis suggests that China has delivered just 10% of its $3.1 billion pledge to finance climate cooperation with the Global South, a fraction of its broader economic investments through the Belt and Road Initiative. And while this year’s host, the UAE, has committed $4.5 billion in funding for clean energy in Africa, concerns remain about whether this financing will be offered at low enough rates for low-income partners to participate. 

Notably, these climate finance efforts represent a small piece of the just transition, including traditional investments into mitigation or adaptation. Tackling the broader components of climate security – including coordinated disaster relief, gender-mainstreamed policy, and widespread security infrastructure investments – will require additional resources from the international community. In particular, the intersectional challenges posed by food systems are a growing humanitarian and national security concern, with the UAE expected to propose a “Resilient Food Systems, Sustainable Agriculture and Climate Action” declaration at COP28. Reforms in this sector are critical; while climate change is already devastating food systems in the Global South, current methods of production are environmentally damaging, making up 15% of all fossil fuel consumption. The global food insecurity caused by the war in Ukraine exemplifies the strong geopolitical angle of food systems, demonstrating to Western allies and strategic competitors alike the fragility of global trade routes. Given the trade vulnerabilities of major global players like China, Russia, and some EU member states, brokering agreements in this space should be a top priority for negotiators. 

Recommendations for COP28

More broadly, multilateral institutions and Western leaders must consider the future of climate finance and food security as they respond to the first-ever Global Stocktake in Dubai, which will assess the Paris Agreement’s effectiveness to date and raise thorny questions on the continued use of fossil fuels and the effectiveness of climate finance. To rise to the challenge, national leaders should consider three key priorities.

Finding new approaches to climate finance

First, this will likely require more creative and targeted financial support from the international community. Domestically, governments will need to mainstream climate considerations into existing programs, address climate-related nexus challenges like food insecurity, and leverage the power of the private sector to fill gaps. Globally, multilateral and regional development banks will need to play a key role in the green transition, including reforms to prevent high borrowing costs. This should be a key focus for transatlantic leaders to ensure that existing climate finance isn’t overshadowed by unsustainable debt burdens

Improving messaging on the urgency of the climate threat

Second, the international community must improve its messaging about the urgency of the threat. While strong global majorities agree on the need to do more on climate change, there is division over whether now is the right time to invest given the broader economic situation. More needs to be done to interrupt this narrative and show that climate finance is a development and global security imperative with the power to support adaptation efforts, work towards climate justice, enhance stability and security, contribute to cooperation amongst conflicting parties, and counter risks of violent extremism. Leaders need to show that climate action is a critical investment into a future-fit global economy and that threats to food systems aren’t constrained by borders. 

Repairing transatlantic relations to show leadership

Finally, transatlantic leaders must focus on repairing cracks in the alliance and preserving their global leadership during the green transition. While domestic policy instruments and mechanisms often diverge, international climate action is a shared opportunity for the US and Europe to demonstrate their continued commitment to paying their ‘fair share’ and supporting those who are disproportionately impacted by climate change – whilst protecting their long-term national security interests. 

In short, it is essential that nations come to COP28 with the intention of making progress toward resolving disagreements around climate finance and recognizing the linkages between climate change and global food security. Beyond COP28, leaders from the US, EU and UK must work together to repair cracks in the transatlantic alliance to ensure their continued leadership in addressing climate change. The Global Stocktake is a critical opportunity for global leaders to demonstrate greater ambition on climate change – continued underinvestment could mean significant and potentially catastrophic security outcomes in the future.