Climate justice

No fossil fuel phase-out without climate finance

21.03.2024, Climate justice

Switzerland is not prepared for the burgeoning expectations regarding its future contribution to international climate finance. New funding sources must be found if additional funds are to be allocated for climate protection and adaptation in the Global South.

Delia Berner
Delia Berner

Expert on international climate policy

No fossil fuel phase-out without climate finance

Extraction of fossil fuels in Bakersfield, USA.   ¬© Simon Townsley / Panos Pictures

Last December at the climate conference in Dubai, puzzled media representatives asked Swiss Environment Minister Albert Rösti whether he was comfortable with promoting the phase-out of fossil fuels by 2050. He reassured them that he was. The world will have phased out coal by 2040, he added, in line with Switzerland's position in the plenary. What he did not say was that phasing out coal, oil and gas will require several hundred billion dollars in climate funding for the Global South – per year. And another comparable amount will be needed to fund adaptation in least developed countries – which, despite having produced almost no greenhouse gases, are being ever more greatly impacted by the consequences of the climate crisis – and for compensating those affected. That will be several times the current financing target of $100 billion per year. The financing shortfall for climate protection measures in the poorest countries is growing constantly. Despite this, the funds being provided by those – like Switzerland – who caused the climate crisis, still fall short of the 100 billion promised. Besides, the debt crisis and other factors are hampering the self-funding capacity of least developed countries. Many countries in the Global South feel left in the lurch by the North.

Against this complex backdrop, this year's climate conference will be working out a new funding target. The yardstick will be the extent to which it enables the countries in the Global South to implement ambitious climate protection plans and adapt to global warming as best they can. An ambitious and credible new climate funding target is a must if, in the course of 2025, all countries are to submit new five-year climate plans that are in line with the aims of the Paris Agreement. The stakes will therefore be high when delegates gather in Azerbaijan in November for the negotiations, and expectations placed on the rich countries will rise substantially. Switzerland, too, should therefore be encouraging polluter countries to provide much more public funding for climate finance. In a guest article in Climate Home News, the chief negotiator for the Least Developed Countries (LDCs), Malawi's Evans Njewa, called on negotiating delegations from the Global North to cease hiding behind their parliaments: "They stress that they have no mandate, or possibility to scale up funds, as parliaments will not approve. So, as parliamentarian debates about budgets and allocations begin early in the year, they need to act now", he said.

Swiss Government resisting the need for action

This pattern can also be seen here at home. Despite speaking up, during climate negotiations, for the worldwide phase-out of fossil fuels by 2050 in keeping with the aims of the Paris Agreement, Switzerland is dragging its feet when it comes to funding, as it cannot point to any domestic policy decisions to increase funding contributions. In reality, the Federal Council is not even attempting to obtain additional funding from the parliament. Why is this so?

So far, Switzerland's climate finance contributions have come mainly from the International Cooperation (IC) budget, which itself is already receiving insufficient funds for worldwide poverty alleviation, and is now facing the prospect of yet another massive reallocation of funds towards reconstruction in Ukraine. This means that current climate financing is already being double-counted along with poverty alleviation projects. But new, additional money is needed if Swiss climate funding is to effectively help support climate plans in the Global South. The Federal Council should be working at the legislative level to devise alternative funding options so that IC funds can continue to go towards global poverty alleviation, the strengthening of basic education and health services, and towards other key tasks. A year ago, it entrusted the Administration with working out ways in which Switzerland could provide more climate funding in future. At the end of last year, an externally commissioned study was published without comment on the website of the Federal Office for the Environment. In it, experts recommend that Switzerland should tap into new funding sources, for example, proceeds from the carbon emissions trading scheme. Yet the Federal Council has done nothing so far. The new legislature plan indicates that, for the next three years, the Government has no intention of submitting an item of business on climate funding to the parliament. It will be relying exclusively on the new four-year credit line for international cooperation for the 2025–2028 period, which offers no scope for additional climate funding.

If the Federal Council fails to act – which would be irresponsible in this case, as the climate negotiations are within its remit – the parliament can also take the initiative. During the past winter session, National Councillor Marc Jost brought forward a motion to enable the parliament to draft new legislation on international climate and biodiversity funding.

Without finance, there is no action

The Baku climate conference is fast approaching – so what remains to be done? Switzerland must rethink its previous negotiating position on funding and strive for an ambitious goal that aligns with the needs of the people in the Global South and distributes the financial responsibility fairly among rich countries, as the ones accountable for the climate crisis. Only in this way can coal be phased out by 2040 and all fossil fuels by 2050. The international pressure to agree on an ambitious target will therefore be intense.

This will also inevitably mean greater pressure on Switzerland to scale up its contribution many times over. If funds are to be increased quickly enough, Switzerland must begin the legislative work now and find new sources of climate funding.

Evans Njewa puts it as follows: "We must all remember that without finance, there is no action, and without action we will never be able to manage the climate crisis."

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