Rich nations could generate $5tn for annual climate action: Report

Wealthy countries could raise over $5 trillion a year for climate action both domestically and internationally by eliminating subsidies for fossil fuels, making big polluters pay, and amending unjust financial regulations, according to a new report by ActionAid International ahead of COP29.

Developing countries are requesting a minimum of $1 trillion annually in public funding to assist them in reducing greenhouse gas emissions and managing the effects of severe weather events, says the report, titled "How the Finance Flows 2024".

Currently, over $677 billion in subsidies are being poured into the fossil fuel and industrial agriculture sectors annually, fueling greenhouse gas emissions. Developed countries are the primary beneficiaries of these subsidies, which are contributing to global temperature rise and biodiversity loss.

The findings of the survey were presented at a programme organised by ActionAid Bangladesh at a hotel in the capital's Gulshan on Monday. "Fund Our Future", a campaign to prevent climate disasters, was also launched on the occasion.

The report explains how public funds from the global south are being diverted to fuel the climate crisis, while enriching the fossil fuel and industrial agricultural sectors. The research found that between 2016 (when the Paris Agreement was signed) and 2023, the fossil fuel sector received an average of $438.6 billion annually in public subsidies from the global south. The industrial agriculture sector benefited from an average of $238 billion per year during the same period.

On the occasion of presenting the report, a panel discussion was also arranged where participants said the climate finance should be channeled through well-planned and targeted actions.

They said the climate finance received by countries in the global south is only a fraction of the subsidies going towards climate-destructive sectors. The adverse impacts of climate change are disproportionately felt by young people, farmers, women, and marginalised communities in the global south. In this context, there is a need to increase investment in sustainable projects and renewable energy, shifting away from fossil fuels. 

Moderating the discussion, Farah Kabir, country director of ActionAid Bangladesh, said the report exposes how fossil fuel and industrial agricultural corporations are driving our climate crisis. "We must ensure accountability and transparency." 

Ahmed Zubaer, joint director of Bangladesh Bank, said, "We need to think about what the viable alternatives are to green energy. We get funding, but the process is a bit complicated. It has to be made easier. We have to focus more on climate adaptation than climate impact mitigation."

Florian Höllen, counsellor, head of German Development Cooperation, German Embassy Dhaka, said, "Bangladesh's energy sector needs to be restructured. The government should take initiatives on green energy transition in such a way that people show interest in it. And the government can think about how the fossil fuel generating power plants in Bangladesh can be converted into renewable energy. '

Ibrahim Khalil Al-Zayad, chairperson of ActionAid International Bangladesh Society, said, "We need to increase research on climate change, green energy and renewable energy."

Sabbir Hossain, chief operating officer of BRAC Bank, said now is the time to reevaluate and plan solar in a new way.

Morshed Millat, former director of the Sustainability Finance Department, Bangladesh Bank, and Anwar Farooq, former senior secretary, Ministry of Agriculture, also spoke.