Climate action is being held back by ‘hidden handbrakes’

Progress on cutting emissions, adapting to climate impacts, and addressing loss and damage is still far too slow to avoid a bleak future for humanity.

While there are recent signs the transition to renewable energy is speeding up, the latest assessment report from the Intergovernmental Panel on Climate Change (IPCC) concluded that carbon emissions must reduce by 48% by 2030 to have any real chance of limiting global warming to 1.5°C. Even with all the action promised, we are currently on track for 2.7°C by 2100. 2025 is also shaping up to be another rocky road for climate action.

So, what’s holding us back? While many of the reasons – like money and geopolitics – are well known, there are several major blockers to tackling climate change that are barely discussed and far from the public eye.

Exposing the ‘hidden handbrakes’

Action to tackle climate change and social injustice is being blocked by a range of deep-lying constructs, or ‘hidden handbrakes’, that the public are largely unaware of. Bond and its members are already working on weakening many of these blockers, from a range of legal obstacles to exploitative mini practices, with reform of the architecture of the global financial system set to be a key focus for 2025 with events such as the 4th International Conference on Financing for Development (FfD4).

In partnership with The Generation Foundation, IIED has been researching these hidden handbrakes and exposing them to wider scrutiny and action.

Over the past 18 months we have been shedding light on the levers slowing down or paralysing progress on tackling climate change and social justice.

In that time, we conducted research that has made news headlines across the world (with a reach over 6 billion) by simplifying and exposing critical but little understood issues such as:

Climate Finance not reaching where it’s most needed
Environmentally damaging subsidies
Investor state dispute settlements
Debt and credit ratings burden on developing countries

The tip of the iceberg

The money needed to service national debt is just one example of a ‘hidden handbrake’ that holds back progress for the countries most impacted by climate change.

The 37 Small Island Developing States (SIDS) together received $1.5bn in total international finance for climate action between 2016 and 2020, while in the same period, just 22 of the 37 paid $26.6bn to their external creditors. This means for every $1 mobilised for climate action, these countries were paying at least $18 to rich banks headquartered in global financial centres and other creditors.

The amount developing countries collectively spend on debt servicing is estimated at $310bn in 2022, and $43bn for the world’s least developed countries, dwarfing all measures of finance for climate action. Given that indebtedness is increasingly fuelled by climate-related disasters and less than 10% of climate finance is reaching vulnerable people who need it most, we are effectively asking those who have done least to cause the problem to shoulder the biggest burden.

Our research has highlighted many other hidden handbrakes too:

Vast subsidies for industries which damage the climate including agriculture, animal feed supplies, and the manufacture of steel, cement, and concrete
The legal contracts or agreements that make the intended beneficiaries of climate finance liable for underperformance when often the bureaucracy is stifling
Climate finance not reaching the local level, holding back cities’ ability to adapt and protect their residents from heatwaves.

Taking action together

Greater public awareness of all the factors holding us back from rapid action should allow more people to consider whether these injustices are compatible with the kind of world we want to live in.

We hope this can lead to direct action that exposes the deep code in society and economies protecting the status quo, so that we can take off the handbrakes and speed up our transition to a cleaner, sustainable future.

With a year of big moments ahead of us to accelerate climate action and form the global financial system, IIED is reaching out to Bond members to offer:

Potential funding for research into new handbrakes
Explore where IIED’s research can support your campaigns
Build coalitions to release specific handbrakes.

If you’re working on any related issues (overview of our existing research) and would like more information or to discuss potential for collaboration then please contact: [email protected]