Sunday, 1 October 2023

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COP 28 president: ‘It’s time to transform climate finance–and bridge its $2.4 trillion gap’

COP 28 president: 'It’s time to transform climate finance–and bridge its $2.4 trillion gap'

If you want to understand the state of the world’s climate efforts, follow the money. Here’s the daunting reality: By 2030, the developing world will need more than $2.4 trillion to address climate change–not as a one-off, but every single year. Of this total, donor countries have committed to mobilize $100 billion annually, a small fraction of what is needed. They have repeatedly fallen short until this past summer at the Paris Summit after a lot of pressure was applied. Now the challenge is how best to mobilize committed finance to restore trust, while simultaneously building a new climate financial infrastructure.

This raises a fundamental question: Is the world capable of mobilizing the trillions of dollars necessary to fund the climate transition? I believe the answer is yes–but not without a concerted effort from governments, international financial institutions, and the private sector to reform the current financial architecture and better align global and domestic financial flows with the world’s climate goals.

Let’s be clear about the stakes. Without major reform of the current financial system, it will be impossible to adequately build new zero-carbon energy, food, and transport systems. We will not have the ability to invest in the resources and infrastructure that help developing countries–especially small island developing states and economies across the Global South–to cope with flooding, droughts, heatwaves, storms, and other climate shocks.

However, if we get this right, creating a better climate finance system can catalyze the biggest economic transformation since the Industrial Revolution. It presents a multi-trillion-dollar opportunity to unlock better forms of growth, create new jobs, new firms, and entirely new industries–and to leave a world to our children and grandchildren that is safer, cleaner, and more prosperous.

The UN General Assembly has climate finance reform in its hands

As leaders gather in New York for the UN General Assembly this week, we urgently need to rally behind a well-defined framework for overhauling climate finance. We must build on the recent momentum of the Barbados Bridgetown Initiative, France’s Summit for a New Global Financing Pact, and the Africa Climate Summit so that the upcoming COP28 climate summit can deliver concrete outcomes.

In an effort to build such a framework, the COP28 Presidency is holding a series of dialogues with a diverse group of leaders to…

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