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September 15, 2021

European Commission President Ursula von der Leyen announced an additional €4 billion ($4.7 billion) in climate finance to transfer to developing nations on Wednesday while calling on the US and the bloc's other allies to start paying their fair share.

Developed countries agreed more than a decade ago, and reaffirmed in the 2015 Paris Agreement, to transfer $100 billion a year by 2020 to the developing world to aid their green transformations and to adapt to the impacts of climate change. Collectively, the world missed that deadline last year. The United States has been particularly criticized for transferring nothing during the four years of the Trump administration.
In her annual State of the Union address to the European Parliament, von der Leyen pointed to the European Union as the world's biggest contributor to climate finance, calling on the US and others to "step up." Not a single G20 country is in line with the Paris Agreement on climate, analysis shows.

"Team Europe contributes €25 billion a year. But others still leave a gaping hole towards reaching the global target. So closing that gap will increase the chance of success in Glasgow," von der Leyen said, referring to the UN climate change conference COP26. She pledged that the additional €4 billion will be paid up until 2027.

"But we expect the United States and our partners to step up too," she added. "This is vital because closing the climate finance gap together, the US and the European Union would be such a strong signal for global climate leadership, and it is time to deliver now. We have no time to wait anymore."

The Biden administration has said it will double the level of climate finance transferred in the Obama administration's second term, which averaged at around $2.8 billion, but critics say it needs to do more to make up for four years of no finance during the Trump years.

Developing nations more than a decade ago had hammered out the climate finance agreement with wealthier countries to acknowledge the developed world's larger role, historically, in the emission of greenhouse gases. Per capita, many developed nations emit far more carbon than developing countries.

Analyst View

The EU without any iota of doubt is blazing the trail in its support and contribution to the climate finance gap, however, the US has been on a sabbatical with regards to compliant with climate change financing, hence this is a wake-up call for other countries particularly the US and China who are large emitters of greenhouse gases.