Question Period Note: International Climate Finance

Canada’s $5.3 billion climate finance commitment (2021-2026) supports developing countries in their transition to low-carbon, climate-resilient, nature-positive and inclusive development. Meeting the New Collective Quantified Goal agreed at the 29th United Nations Climate Change Conference (COP29) requires scaling up ambition and convening multiple actors, including the private sector.

· Climate change is threatening food security, supply chains, and worsening affordability in Canada and around the world. International climate finance is essential to reduce future costs and support the most vulnerable.

· At COP29 in 2024, countries set a target of $300 billion USD per year by 2035 to help developing countries adapt to the effects of climate change.

· Canada will engage all sectors, including financial, private, and bilateral donors, to scale up and improve climate finance.

· Under the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement, developed countries committed to mobilizing USD 100 billion per year in international climate finance by 2020 and through 2025. Canada is a leader internationally on climate finance and has worked closely with other contributors to mobilize effort toward the delivery of the $100 billion goal, improve the effectiveness of climate finance and enhance transparency. As a result of these efforts, in 2024 the Organization for Economic Co-operation and Development (OECD) confirmed that the $100 billion goal was met and exceeded for the first time in 2022 with USD $116 billion provided and mobilized.
· At COP29 countries agreed to establish a New Collective Quantified Goal on climate finance consisting of an investment target of at least USD $1.3 trillion per year by 2035 to developing countries from all actors and sources (public and private), with a goal for developed countries to take the lead on mobilizing at least USD $300 billion per year by 2035. The USD $300 billion goal replaces the current climate goal of USD $100 billion when it concludes at the end of 2025.
· While the new climate finance goal puts added pressure on developed countries to increase their climate finance ambition, there is no legal obligation for Canada to increase its climate finance commitment in direct proportion to the new goal given it is a political commitment and a collective goal. To support the delivery of the collective goal of USD $100 billion per year, Canada announced, in 2021, a doubling of its international climate finance commitment, to $5.3 billion over the
2021-2026 period. This commitment builds on Canada’s previous $2.65 billion climate finance commitment and supports developing countries, particularly low and middle-income countries, to combat climate change and biodiversity loss by supporting their transition to sustainable,
low-carbon, climate-resilient, nature-positive and inclusive development. Canada’s current
$5.3 billion climate finance commitment will sunset in March 2026.
· Canada is warming at twice the global rate, and three times the global rate in the Arctic. Domestic impacts are already severe and costly with the wildfire season in 2023 alone costing Canada over $2 billion. These impacts are posing increasingly severe threats to the Canadian economy by slowing economic growth, increasing costs to cope with disasters, and raising the cost of food and other goods as supply chains face more disruptions. Accelerating international action to help slow and reverse these threats is an impactful and efficient way to reduce future costs for the Government of Canada and Canadians.

Non-applicable