Climate change funds: A myth or reality?

While the wealthy nations keep putting to the $100b target, they only likely met it in 2022, according to the Reuter’s special report – Rich nations are earning billions from a pledge to help fix climate. However, the question is: Does this money reach the intended person?

According to Reuter’s special report, wealthy countries contradict the widely embraced concept that they should compensate poorer ones for their long-term pollution that fuelled climate change by channelling money from the programme back into their economies.

As such, rather than give grants or low-interest loans, they are giving loans at market value or conditioning funding on hiring certain companies, which means that money meant for developing countries gets sent back to wealthy ones. 

Uganda’s case
Uganda is one of the low developed countries grappling with climate change and despite several initiatives to fight the climate effects, Ugandans are yet to see the impact.

Mr Denis Mugagga, the head of the Climate Finance Unit in Finance Ministry, says the effects of the Covid-19 pandemic and other global challenges have further constrained the flow of international resources. This has led to a reduction in climate finance from external sources to Uganda to $272.6 million as at December 31st 2023, down from $ 447.40 million registered as at December 31, 2022. 

The government has put a lot of resources from taxpayers’ money towards fighting climate change effects. These invested resources are part of the Consolidated Fund and are subject to appropriation by Parliament.

“Since its inception, Uganda has also received external resources from the different United Nations Framework Convention on Climate Change (UNFCCC) mechanisms such as the Global Environment Facility, the Green Climate Fund created under the 2015 Paris Agreement, the Adaptation Fund and the Least Developed Countries Fund (LDCF), a special fund for LDCs. We also continue to receive climate financing from bilateral partners such as the United Kingdom, European Union (EU), USAID, Belgium, Denmark and Germany giving direct contributions for climate action. That is not forgetting multilateral support from the World Bank, the African Development Bank, the Islamic Development Bank and philanthropies, such as Bill Gates Foundation,” he says.

Pay for the damage
Ms Christine Kaaya Nakimwero, the Kiboga Woman Member of Parliament, who previously coordinated the Parliamentary Forum of Climate Change-Uganda still believes there should be baskets of loss and damage funds for the damage done by the developed countries.

“They give developing countries money to keep going as well as settle the loss and damage they are facing. However, most wealthy countries are focused on mitigation,” she says.
Mr Mugagga adds that under the UNFCCC, it was agreed that every country should receive climate finance and invest at least 50 percent towards adaptation and 50 per cent for mitigations. However, that is not happening because of the international community’s preference for reducing emissions. 

“Uganda prioritises adaptation because the masses are already grappling with the climate change effects. However, the global partners are focussed on emissions and giving towards mitigation, which is directly affecting them,” he says.

However, Mr Mugagga says under the Conference of Parties (COP) negotiations, developing countries continue pushing that the Annex 1 parties pay for what they caused. Additionally, Uganda has submitted the actions it will take for both mitigations and adaptation measures until 2030 under its updated Nationally Determined Contribution. That includes putting up infrastructure that can stand the climate change effects such as floods, and helping relocated people such as those from Bududa adapt to their new environments rather than returning to risky environs.

Hazy picture
Despite the monetary commitments by most developed countries, Ms Nakimwero says depositing is voluntary, in that even when a country does not fulfil its pledge, there are no repercussions.
“That is a major challenge as the contracts are not binding. That is the start of failure to honour their commitment,” she says.
Inconsistent pooling aside, Ms Nakimwero says the money goes to the Consolidated Fund where the President has a big say in how the funds are disbursed.

“That has two aspects where the money might be used for something else such as adaptation, contrary to what the funders wanted. The other aspect is the long procurement time it takes before the money is released,” she says.

It is also tough for entities, more so small Civil Society Organisations (CSOs) to get this money as most funders will only want to deal with accredited companies. Ms Nakimwero says this deters indigenous actions or local options.

“That is irrespective of the fact that the CSO may be offering solutions in line with the community needs. As such, the funds may not tally with the needed implementation on ground,” she says.
Adding: “Some countries can only lend money if the borrowing country works with their people. That means spending exorbitant fees paying expatriates rather than spending those resources on the intended needs. Additionally, the lending country’s priorities will be at the top of the agenda, failing the purpose for getting the loan.” 

Ms Christine Mbatussa, the programme officer, Environmental Management Livelihood Improvement Bwaise Facility (EMLI) says lack of capacity to hire manpower to write the proposal quality needed in these negotiations is one of the things that fails small CSOs.  

“Those small organisations can only benefit if they are sub-granted by the bigger organisations. Then, they can work at the grassroots to implement activities such as tree planting, distributing clean cooking technology on behalf of the bigger entities,” she says.

Mr Mugagga adds that at the international climate finance architecture, there are pre-determined middlemen. For instance, one cannot access the Green Climate Fund (GCF) if they are not working with an international intermediary.

 “Implementing agencies also known as accredited entities such as the World Bank, UNDP, UNEP, FAO and African Development Bank must manage the resources on your behalf,” he says. 

Technical expertise is another deterrent in utilising the given funds. Ms Nakimwero says some of the technologies needed to address climate change effects can only be run by expatriates, who prioritise their country’s goals, which eats into the money. 

Lack of readiness is another biting aspect as Uganda borrows climate finance before putting in place some of the necessary tools. For instance, although the Climate Change Act was enacted three years ago, there are still no regulations in place.
“We have also provided for the Tree Fund, Environment Fund, and the Climate Change Fund but none is operational. However, some of these funds need cost sharing, which makes the would-be donors pull back owing to lack of commitment on our end,” Mr Nakimwero says.

Disbursement of the funds from the budget is not timely. Ms Nakimwero points out that it defeats reason that money for coffee seedlings is sent out in April, yet the planting season is long gone. 
“While the narrative behind allocating the money is correct, the Finance Ministry fails when the money reaches the intended uses long after the intended purpose,” she says. 

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