Climate is a global issue. And global wealth is very unevenly distributed. Without financial assistance from the US and other wealthier nations, the poorer nations will be unable to meet their climate targets.
Unless all countries make the transition to a green economy, we will all suffer the consequences of climate catastrophe.
How much will a global green transition cost? Estimates vary considerably, as we’ve seen, from $60 trillion to $120 trillion or more. Using Jacobson’s figure of $61.5 trillion for the world total, only one-tenth of that cost is for the transition within the US ($6.7 trillion). Another tenth is for the transition in Europe ($6.0 trillion), another tenth for the transition in India ($6.9 trillion) and nearly one-fifth for the transition in China ($13.3 trillion).[1] That leaves about half of the total cost (roughly $30 trillion) needed to pay for the transition in the other 150 countries in the world, some of them relatively poor in comparison to the US and Europe, and many of them very poor.
The global Green Climate Fund (GCF) was established in 2010, within the framework of the UNFCCC, to help channel funds from the wealthier countries of the world to climate mitigation efforts in the poorer countries. It set a modest goal of raising $100 billion per year, which would equal $1 trillion over 10 years – a far cry from $30 trillion. Nevertheless, in the first 10 years, the fund was only able to raise $8.24 billion in total contributions.[2]
This included $1 billion from the US by 2017, out of $3 billion pledged by President Obama. No additional funds were added under the Trump administration, but in 2023, President Biden announced that the US would be sending another $1 billion.[3] Thus the US is $1 billion short of its pledge, and far short of what is needed.
As of September 2023, global contributions total $12.7 billion. [4] Wealthy countries like Germany are already contributing more than the US, and many others, like Norway and Sweden, are contributing far more per capita (or as a percentage of their GDP) than the United States. To address this disparity, President Biden announced in September 2021 that the US would double its contribution to the GCF, and then in 2022 he proposed to double it again: to $11.4 billion per year.[5] This would bring the US contribution up to just over 10% of the $100 billion per year target figure for the fund.
Given the size of the US economy compared to other countries (25% of global GDP) and its historical contribution to the climate crisis (20% of accumulated carbon emissions), this contribution to addressing the global crisis is still woefully inadequate. Doubling the US contribution again to $23 billion per year would begin to redress the enormous imbalance globally and spur other countries to also step up their commitment.
[1] See Jacobson, Supplementary Table 19 pp53ff.
[2] See Green Climate Fund. (n.d.). Resource mobilisation. https://www.greenclimate.fund/about/resource-mobilisation
[3] Green Climate Fund. (2023, April 20). The Green Climate Fund welcomes US contribution of USD 1 billion. Green Climate Fund. https://www.greenclimate.fund/news/green-climate-fund-welcomes-us-contribution-usd-1-billion
[4] Green Climate Fund. (n.d.). Green Climate Fund. https://www.greenclimate.fund
[5] See Joselow, M. and Montalbano, V. (2022, March 29). Biden wants record $11 billion in climate aid. Congress may not deliver. The Washington Post. https://www.washingtonpost.com/politics/2022/03/29/biden-wants-record-11-billion-climate-aid-congress-may-not-deliver/