To meet the £11.6bn target by 2026, government officials have calculated that it would have to spend 83% of the Foreign Office’s official development assistance budget on the international climate fund. Civil servants said in the leaked document that this “would squeeze out room for other commitments such as humanitarian and women and girls”.
It also claimed that factors such as Ukraine and debt relief could make it even more difficult to meet the target. This is because the government has cut international aid spending to 0.5% of gross national income since the announcement was made, squeezing budgets across the board, and because ministers did not spend most of the money allocated to the climate fund over the past few years, leaving the majority to be spent by 2026.
It seems the number one rule of government is if you do not spend your budget, it will be taken away. The troubling reality for aspirational spending is promises are easy to make when coffers are flush and difficult to sustain when they are not. Climate change is a tomorrow problem, even if the timing of this leak coincided with the highest recorded average global temperature. The second rule of politics is timing is everything.
Russia’s invasion of Ukraine and inflation are today problems. Funding defence spending and providing assistance to mortgage holders, struggling with interest rates, is the right decision. This is a graphic example of the trade-offs most countries will have to contend with as the heady aspiration of decarbonisation is worked towards.
The one thing everyone agrees on is massive additional spending is required to build the necessary infrastructure and no one has any idea where the money is supposed to come from. That central contradiction was ignored when rates were low and liquidity abundant. It’s a much more pressing issue today.
The large solar farm destroyed by hail in Nebraska last week had a hail mitigation system installed but it was apparently not working. That’s bad news for Array Technologies since their business is supplying systems to ensure panels are always at their most efficient angle to the sun and to turn them over when hail strikes.
Nuclear energy ticks a lot of boxes for climate activists. However, the risk of Russia causing an “accident” at a Ukrainian nuclear plant is unlikely to be helpful for the sector. The Global X Nuclear ETF is easing back from the most recent lower rally high even as it holds the region of the 200-day MA.