INDCs in Least Developed Countries are estimated to cost US$93.7 billion per year

Press release, 30 November 2015

The cost of all 48 Least Developed Countries implementing their post-2020 climate action plans – through Intended Nationally Determined Contributions – is estimated to be around US$93 billion a year, says a paper published today by the International Institute for Environment and Development.

The entrance to Le Bourget, the venue for the UN climate talks (COP21) (Photo: Takver, Creative Commons via Flickr)

A new paper says international climate finance from public sources should prioritise the Least Developed Countries (LDCs) ahead of wealthier countries, which have greater access to private finance. 

Money is a key issue at the COP21 climate change talks in Paris. Specifically how we will afford to make the necessary changes to drastically cut emissions and adapt to the climate change impacts that are coming and, for some countries, already here.

The Least Developed Countries (LDCs) are unanimous in saying they cannot deliver their climate action plans, known as Intended Nationally Determined Contributions (INDCs) without new, scaled up, additional and predictable international climate finance.

"Less than a third of international public climate finance currently reaches the Least Developed Countries," says Dr Andrew Norton, director of IIED. "A fair and effective deal at Paris should prioritise the investment of international public climate finance for this group to implement their climate action plans, while agreeing measures to help better off countries attract private climate finance.

"Making finance available is one thing, but ensuring it gets to those who need it most is another. The truth is the currently available public climate finance is not flowing to the LDCs in anywhere near enough quantities to implement their much-needed climate action plans."

The 48 nations that make up the LDCs are home to some of the world's poorest communities, which face a wide range of development challenges and are bearing the early brunt of climate change, despite having contributed least to the problem. 

But the LDCs are also proving to be among the most proactive and ambitious in rising to the climate challenge and paving the way for their transformative shift to low-carbon, climate-resilient economies. 

As a negotiating group, the LDCs have proved themselves more ambitious than the world's largest emitters. They are collectively calling for a below 1.5 degree Celsius 'maximum warming' target, rather than the more commonly accepted 2 degree Celsius.

For the LDCs, economic development, regional food security, ecosystems, and the very survival of their populations and livelihoods are at risk if talks only aim to limit warming to 2 degrees.

Parties to the UNFCCC have already agreed to mobilise US$100 billion each year from wealthier 'donor' countries via public and private financial flows. The most high profile of which being the Green Climate Fund, which developing economies could use for projects for both cutting emissions (mitigation) and building a life more able to deal with climate change (adaptation). 

IIED's work suggests that the overall cost of implementing all 48 LDC INDCs is actually more likely to be close to a trillion dollars over 11 years, which translates into an annual implementation cost of $93.7 billion between 2020 and 2030. 

A closer look at the OECD data for 2013-14 shows that the LDCs receive just under a third ($11.8 billion) of all public climate finance available each year. Most of this ($10 billion) goes towards supporting mitigation projects, with just $1.8 billion allocated each year to support adaptation across all the LDCs. Also, because we are not sure if these flows can be classified as 'new and additional' to development aid, efforts can be further scaled up post-2020.  

The lion's share of public climate finance goes to wealthier countries. Indeed, six countries alone – Brazil, China, India, Morocco, South Africa and Turkey – receive as much public money as all 48 LDCs together.

The world is making progress towards meeting its target of mobilising $100 billion in annual international climate finance by 2020, but these efforts must be significantly scaled up now and after 2020.

But the LDCs cannot hope to implement their INDCs quickly enough alone. They will need both technology and capacity support. And they will need investment capital, particularly for high start-up costs. Much of the finance needed will have to come from international sources. 

"A fair and effective deal in Paris should prioritise the investment of international public climate finance for LDCs to implement their INDCs, while agreeing measures to help better-off countries to attract private climate finance," says Norton.

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Contact

For more information and interviewees, contact: 

Charlotte Forfieh, press officer – email: charlotte.forfieh@iied.org; tel: +44 (0)20 3463 7366

Notes to editors

The split between mitigation and adaptation costs breaks down as $53.8billion for mitigation and $39.9 billion for adaptation

About IIED: IIED is a policy and action research organisation promoting sustainable development and linking local priorities to global challenges. We are based in London and work on five continents with some of the world's most vulnerable people to strengthen their voice in the decision-making arenas that affect them

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