Photo: Pixabay
Last month, Washingtonians voted to protect their landmark cap-and-invest program, showing support for the program’s strong limit on pollution and game-changing investments. Thanks to this resounding win, the cap-and-invest program continues to deliver for Washington communities — with today’s results bringing in record revenue for the year.
Source: Pexels
With anticipated environmental rollbacks at the federal level, the U.S. needs states to act on climate in order to make progress towards the nation’s 2030 commitments. Luckily, there are already signs of momentum. A landslide victory in Washington state to protect its climate law sends a hopeful message that ambitious climate action at the state level is not only possible — it’s popular. This result in Washington should give state leaders across the country confidence to move forward with bold action at a moment when it’s needed the most. Here’s what to know about the power of state-level action and a few highlights to watch out for in 2025.
Photo: Pexels
Results were released today for California’s fourth cap-and-trade auction of the year, which was administered last week by the California Air Resources Board (CARB). Auction prices in the joint California-Quebec market (known as the Western Climate Initiative, or WCI) have trended downward this year, reflecting growing uncertainty among market participants about how best to plan their compliance strategies in the absence of regulatory or legislative clarity. A clear commitment to ambitious reductions in climate pollution and long-term market stability are urgently needed.
Juan Carlos Jintiach from the Global Alliance of Territorial Communities, speaking on direct access to finanance for Indigenous People at COP29. Photo by Bärbel Henneberger.
This post was authored by Bärbel Henneberger, Senior Partnerships Manager at the Environmental Defense Fund.
On November 21, COP29 celebrated Indigenous Peoples and Local Communities (IP and LCs) as a thematic day in the Action Agenda of the Azerbaijani COP presidency. The day underscored the essential role of IP and LCs in safeguarding 80% of the world’s biodiversity and preserving 36% of intact forest landscapes.
To succeed in the fight against climate change, we must collaborate with IPs and LCs and respect their principles, culture, and methods while providing the support they need to further our shared conservation goals. We won’t succeed in conserving tropical forests without the partnership and leadership of IPs and LCs.
Climate conferences like COP29 offer a platform for IP and LCs to amplify their voices, and shape negotiations. It’s an opportunity for them to show the world how their efforts to conserve and sustainably manage their territories, which are some of Earth’s most important ecosystems, are critically important in the climate fight.
At COP29, IP and LC delegates spotlighted examples of effective participation in negotiations, policy frameworks, and innovative climate finance mechanisms. These efforts, though diverse, share a common goal: to embed Indigenous rights and knowledge systems into global climate action. Below are a few examples of Indigenous approaches to conservation efforts showcased during COP29. Critically, the world must continue to support, and learn from, these approaches well after the negotiations in Baku have ended.
Spotlight on LCIPP and the IP Caucus
This blog was authored by Christopher Dekki, Manager, Global Engagement and Partnerships.
Hopefully, COP29 delegates savored every moment of the rest day here in Baku because week 2 is already off to a hectic start. As deep divides within the negotiations remain unbridged, Azerbaijan, the newly minted COP29 Presidency, will need to increase its efforts to ensure consensus within the process and deliver a meaningful outcome.
Little progress made on the climate finance goal
The core outcome of this COP, a New Collective Quantified Goal (NCQG) on Climate Finance for developing countries, stands on shaky ground as massive disagreements between the Global North and South are making it difficult for negotiations on the substance of the goal to take place in earnest. Nevertheless, the result of this process will have major implications for the ability of developing countries to transform their economies and societies and realize more ambitious climate action. With finance needs estimated to be $2.4 trillion per year by 2030 in developing countries alone, the COP negotiators must urgently step up action in this arena.
While a great deal of attention has been placed on the quantity of money that should be provided, EDF has entered the finance fray by advocating for greater attention to quality – going beyond the raw numbers and ensuring systems are put in place to make the most of every dollar spent on climate action. It is critical for delegates to work together during week 2 to break the deadlock, and deliver a climate finance goal that is concessional, accessible, and impactful. The good news is that the latest text includes many provisions taking us in this direction, laying out options that can lay the foundation for better finance, and thus better outcomes for the climate. We need negotiators to come together around the best solutions.
Making moves on carbon credits Read More
The UN climate talks, COP29, is well underway, and countries have entered final negotiations on the New Collective Quantified Goal (NCQG), a new climate finance goal to boost funding for climate action in developing countries. Reaching agreement on the goal may be difficult in the face of the U.S election results, but it remains an urgent priority.
One glaring finance gap that we need to address in the new goal is finance for climate adaptation. Adaptation is how governments and communities prepare for and adjust to the impacts of climate change. It’s about making changes to reduce or prevent the harm caused by climate impacts like rising sea levels, more frequent storms, and hotter temperatures.
According to a new report from the United Nations Environment Programme (UNEP), adaptation needs are not being met worldwide. Developing countries will need $215 billion per year over the next decade for their adaptation priorities, from building climate resilient infrastructure to restoring ecosystems. Yet international finance flows for adaptation were just $28 billion in 2022 – an increase over prior years, but nowhere near enough.
Transformational adaptation requires closing the finance gap and maximizing the impact of every dollar.
Where is the world falling behind on adaptation?
Many developing countries are particularly vulnerable to climate change impacts, and the good news is that they are prioritizing efforts to build resilience. UNEP’s Adaptation Gap Report found that 87% of countries have at least one national adaptation planning instrument in place, compared to around just 50% a decade ago. These instruments include National Adaptation Plans (NAPs) and other strategies or policies that guide adaptation.
Now time for the bad news: although planning has improved, there is a growing gap in implementation as countries lack the necessary finance to meet their objectives. Adaptation has consistently been underfunded compared to mitigation, and while developed countries are working to double adaptation finance, the current $28 billion in annual flows represents just 13% of the $215 billion needed annually.
[Source: UNEP Adaptation Gap Report 2024]
The lack of finance for adaptation has serious implications for many developing countries, especially small island states which urgently need international support to strengthen resilience. For example, the Caribbean nation of Dominica is installing early warning systems to improve preparedness and reduce the impact of future hurricanes, but by 2023 they had only installed three systems and need 50 more to adequately cover the island. Without sufficient adaptation finance, the country will remain highly exposed to sudden climate shocks.
This finance gap is further complicated by limited private sector engagement in adaptation. UNEP finds that many transformational adaptation projects are seen as risky by private investors, due to their longer time frame for benefits and less clear return on investment. Private finance does flow to projects in infrastructure and commercial agriculture, but often not without efforts by the public sector to de-risk investments.
It is not surprising that two-thirds of adaptation financing needs are anticipated to be financed by the public sector. But the quality of public finance for adaptation has room for improvement as well. 62% of public finance for adaptation is delivered through loans, of which 25% are non-concessional, or at market rate with no favorable terms. And the use of non-concessional loans for adaptation in most vulnerable countries has actually increased in recent years. These tools have the potential to drive up the debt burden in developing nations which are already struggling to pay the bills. Expanding grant and concessional finance will be important to mitigate these challenges.
How do we unlock quality adaptation finance?
The Adaptation Gap Report suggests that filling the finance gap will require several enabling factors that can unlock new finance flows. Notably, in EDF’s new report ‘Quality Matters: Strengthening Climate Finance to Drive Climate Action,’ we identify similar strategies as we call for structural reforms within the international climate finance system. Three key recommendations overlap in both reports.
First, countries need to mainstream their climate objectives and adaptation goals within national planning and budgeting processes. This integration should be paired with robust stakeholder engagement that systematically includes subnational authorities, marginalized groups and potential implementing entities in the planning process. Doing so will better align adaptation activities with other national priorities and create more fundable projects. Moreover, planning processes should emphasize project evaluation and evidence gathering to better understand what interventions are most impactful and maximize the potential of climate resources.
Second, countries should adopt investment planning approaches to climate action. Specifically, they should work to develop a pipeline of bankable projects that can meet the objectives within their NAPs and other planning instruments. This can help attract investors to projects and ensure successful implementation of adaptation plans.
Third, multilateral financial institutions including multilateral development banks (MDBs) and climate funds need to undergo structural reform to improve the quality of finance. The MDBs are currently pursuing reforms to become better fit-for-purpose for addressing the climate crisis, and at COP29 they jointly announced that their collective climate finance will reach $120 billion by 2030 – though only $42 billion will be dedicated for adaptation. Improving the balance between mitigation and adaptation finance will be important to ensure that developing countries’ priorities don’t go unfunded. Additional actions these institutions can take include strengthening the concessionality of terms for adaptation projects to alleviate debt burdens and spark new blended finance opportunities, and leveraging innovative instruments like adaptation swaps which can foster positive adaptation outcomes in exchange for forgiving debt.
The NCQG is an important milestone which has the potential to advance action on these reforms and strengthen adaptation finance flows. Alongside supporting a strong quantitative goal, countries should call for improvements in the quality of finance, to ensure that finance for adaptation projects is available, accessible, concessional, and impactful.
