A brief view on regional climate finance distribution in West Asia by Youth4Nature.
Throughout this blog, West Asia has been referred to as a sub-region of MENA.
Key takeaways:
Climate finance in MENA is largely distributed to renewable energy infrastructure, low-carbon transport, and energy efficiency.
Youth-led movements rely on external philanthropy.
Climate justice is left out from climate finance and is the reason why technology dominates climate finance.
Climate finance is divided into mitigation, adaptation, and cross-cutting themes with mitigation being most supported.
While climate finance has been increasing annually on a global level, the distribution of funds remains dominated by sectoral projects (Energy, transport, agriculture, etc.) in MENA. Annual global climate finance is still falling short for what is needed to remain under the 1.5 degrees celsius scenario. Climate finance flows from intermediaries to sectors using financial instruments for different uses. The purpose of this blog is to discuss the end point of climate finance. There is a need for diversifying the beneficiaries of climate finance on a global and regional level. Technological innovations dominate global financial support whereas social change and investing in nature fall behind.
The current state of internal climate finance in MENA
If we consider MENA a closed box without inflow of external funds for climate-related projects and activities, is this region doomed and incapable of financing a green shift towards a climate-friendly society?
There is a large gap in the financial capital and economic status of MENA countries. Some countries have very low capital, economic crises, and militarization. These countries most of the time are almost very minimal contributors to the climate crisis but suffer the most from the consequences. Thus, these countries cannot be held responsible for financing climate-related activities within their borders nor outside them. Discrepancies among these countries to finance what they can in terms of climate is also variable. A poorer country might set a higher budget for climate-related projects than a richer country. The visions of these countries is the reason why budgets differ among countries. To look at the region in a vacuum, appropriate climate finance can only be achieved through the support of the wealthier nations in the region, which happen to be the fossil fuel producing countries in the Arabian Gulf.
Are Gulf countries financing climate-related projects in the region?
Decision-making to finance regional projects in the Gulf is highly centralized and political whether climate-related or not. A recent regional project financed by Gulf countries is the Middle East Green Initiative which is mainly applied in Saudi Arabia and its vicinity. Apart from this initiative, funding by the rich Gulf capital for small-scale autonomous projects is little to none.
What is climate finance being used for in MENA?
Climate finance in the MENA region has largely focused on scaling up infrastructure projects. Several data sources indicate that renewable energy, energy efficiency and sustainable transport are the top sectors for climate finance in the region.
This study, by Heinrich Böll Stiftung, shows that 12 global multilateral climate funds between 2003 and 2017 have supported projects in the MENA region. Most of the funds have been allocated to renewable energy infrastructure projects in Morocco and Egypt.
ESCWA indicates that 77% of total climate finance in 2016 by intermediaries of the UNFCCC in the MENA region have been committed to renewable energy and energy efficiency. The study explains that, although funding is increasing in the MENA region, the supply is not well matched to the region’s needs and priorities, it is unequally distributed, and it is insufficient. Climate finance by banks such as the European Investment Bank and the Islamic Development Bank (IDB) have also set out to prioritize sectoral reforms and a transition to renewable energy through technical assistance.
Sectors most funded in MENA
Renewable energy generation
Low-carbon transport
Energy efficiency
Sustainable agriculture
Who is funding?
Most climate finance in the MENA region is bilaterally financed, meaning that funds are transferred from a funding body to a beneficiary (often governments) that are creating climate adaptation or/and mitigation projects. Climate finance within the region is mostly supported by governments and banks such as the IDB with their climate action plan 2020-2025. As mentioned above, the support is sectoral, technologically driven, and most often directed to governments. Governments support national central projects while the IDB supports regional projects. Unequal and insufficient distribution of funds by bilateral and multilateral funders along with a lack of regional support has led to unequal climate action. Morocco, Egypt, Jordan and Tunisia are the top beneficiaries from bilateral climate finance. Countries in the Gulf Cooperation Council are internally financed. The remaining countries in the region are underfinanced bilaterally and are not able to internally finance climate action.
Where do civil society organizations and nature fit in climate finance?
Almost all civil society organizations in the MENA region are funded by global philanthropic institutions. But, philanthropy is not enough for civil society organizations to make an impact, especially those that are youth-led. The Arab Foundations Forum discusses how governments are working in odds with philanthropy when it comes to civic engagement, noting that safe and democratic spaces for the freedom of expression are equally important to create impact.
With the recent COP26 in Glasgow, philanthropic agreements between organisations and governments have emerged in support of energy transition and net-zero alliances. The convening of global summits, governmental dialogues and private sector support has left out civil society and youth from philanthropic support. As mentioned, most climate finance is focused on sectoral technological advancement and scale-up. Climate finance largely undermines the importance of climate justice in the fight against climate change. Climate finance is centered around technology; whether it’s efficiency, carbon capture, or renewables. As youth, indigenous communities and civil society push forward on climate justice issues and their demand for philanthropic support, the overall impact of civil society, organizations, institutions vs technology needs to be included. Technology is not the silver bullet solution and, when it stands alone, it is far from being able to address the paradigm shifts we need to address not only climate mitigation and adaptation, but also the biodiversity crisis, food system challenges, conflict, justice and more... The work of knowledge-sharing, capacity-building and small-scale initiatives support is undermined by climate finance that only favours technology
From a regional perspective, the ability and willingness to finance climate and nature projects is insufficient. While the majority of countries in the MENA region suffer from economic crises and conflict, neighbouring fossil fuel exporting countries in the region are in position to support regional climate work (Although speculation about greenwashing would arise relevantly). In addition to having the capital, fossil fuel producing countries could utilize the existing regional alliances in banks, councils, the Arab league, and other unities, to actually disseminate the finances to countries in need. While youth organizations starve for financial support, we can all thank the word inclusivity for opening up spaces for us by those in other regions through funding.
Civil society alliances have emerged for renewable energy, low carbon development, and climate protection in the region. Now we ask: would similar alliances for nature, for people, and for the climate result in enhanced capital for these civil society actors as well?
The solution?
Today, the only successful model for financing of youth-led climate action in the region is from global professionalized philanthropic organizations. There are currently few to none regionally sustainable distribution of funds towards systemic shifts, youth empowerment, youth-led initiatives, and advocacy. Partial financial support has been provided by embassies in some MENA countries, but we would still count this as external funding. What youth need is easier access to philanthropic support. This includes, finding philanthropic support that is more accessible, applications that are less strenuous, and funding amounts that can sustainably support these youth to carry on with their work over time. This is not a demand for special treatment, rather to acknowledge the long-term unequal access among generations until youth have well established their movement for the biggest global crisis humanity has caused and youth have to bear the burden of.
While governments in the MENA region are concerned with economic growth, funding conflicts, and creating expensive, ambitious, and ineffective natural climate solutions, the role of civil society will continue to emerge and grow to fill in the gaps. Unless the lack of finance between regional funders and youth-led organizations is tackled, the continued global support to regional youth-led initiatives will devalue the credibility between society and these initiatives. Speculations have always emerged in the MENA about western-funded civil society being a way to politically influence people. Coupled with an environment where safe and democratic social mobility is seen as a threat to the status quo, youth-led movements rely mostly on global spaces and digital platforms to share their perspectives and call for change.
Climate and intergenerational justice is largely a concern of people and for nature. As we have seen on the global stage, youth continue to push the needle on climate policy reform. For intergenerational justice to be attained in MENA, youth demand that climate finance support, whether regionally or globally, be disseminated to them as well. The flow of funds towards logistical and technical support for youth is not enough. The capacity youth put into creating impact must be recognized through financial means. Youth have to be paid for the work they are contributing to and creating! Unless this is factored in, MENA youth-led movements cannot create the change they aspire for nor mobilise other youth especially given the fact that these youth suffer from intersecting social and economic inequalities on top of all the climate-work they voluntarily contribute to. One of our global ambassadors, Yazan Miri said:
We need our voices to be heard. We need our problems and challenges to be heard from our perspectives, because we know what the future will hold for climate refugees.
Yazan has proven that despite the hardships of these circumstances, an opportunity has risen for West Asian youth to demonstrate unique knowledge that requires financial support.
The MENA region and West Asia in particular, are one of the regions most affected by climate change. Recent net-zero commitments by fossil fuel exporting countries are not sufficient to deduce that climate justice will be tackled in the region. Net-zero commitments in the region are coupled largely with technological investments. The claim that youth-led climate action is being supported in the region is largely influenced by government micro-management. In short, youth in the region cannot be expected to fight for climate justice when regional financial support - from governments or philanthropy - is not provided, coupled with deprivation of safe spaces for advocacy.