Tuesday, August 22, 2023 – 5:25 PM
ABU DHABI, 22 August / WAM / The climate change crisis requires joint global solutions, including climate finance, which is one of the main tools that can help in facing this crisis.
Developed countries cannot ignore the importance of financing emerging countries to reduce their dependence on traditional energy sources and move towards projects that are more environmentally friendly, as these countries bear a greater burden of the negative effects of climate change while their capabilities to reduce emissions are limited.
COP28, which is approaching in the UAE, represents an important opportunity to shape the features of climate change financing, by discussing increased financing for projects that help reduce emissions, ensuring that climate financing is fair, in addition to being a platform for discussing the development of new financial instruments that can Help reduce the cost of climate finance, and strengthen international cooperation in the field of climate finance.
The Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28), which the United Arab Emirates is preparing to host from November 30 to December 12 at Expo Dubai, is an important turning point for achieving progress in the field of climate finance, which contributes to putting the world on the path. correct to achieve the global warming target of 1.5°C.
While international financing institutions and multilateral development banks are not designed to stimulate private capital in order to provide the necessary concessional financing, COP28 will represent a shift for a radical and comprehensive development of the international climate finance system.
The UAE represents a role model in the field of sustainability, the environment, sustainable financing, and its contribution to achieving the goals of sustainable development through the initiatives and projects it adopts.
Many international studies have talked about the importance of climate financing at all levels, whether when we talk about financing developed countries for developing countries, or when we talk about public financing and private financing within each country.
Public financing from developed countries can play a key role in meeting their $100 billion annual commitment to support developing countries in mitigating and adapting to climate change.
According to a report by the International Energy Agency and the International Finance Corporation, less than half of the investments of emerging market and developing countries in the field of clean energy are financed by the private sector, and this share must rise, as the massive expansion of investment is necessary in emerging and developing economies to meet the growing demand. on energy sustainably and to ensure that climate goals are met.
Getting on track to reach net-zero emissions by 2050 will require more than tripling clean energy spending in emerging and developing economies by 2030, far beyond the capacity of public finance alone, and thus requires an unprecedented mobilization of private capital.
In the agency’s estimation, to reach the climate and sustainable development goals, the private sector will need to finance at least 60% of clean energy investments in emerging market and developing countries through 2035.
According to the World Resources Institute, it is estimated that about $5 trillion in capital will be needed each year by 2050 to achieve climate and biodiversity goals, and these investments are necessary to research and scale up new low-carbon technologies to replace existing capital stocks with sustainable alternatives. Transforming business models away from harmful practices and enabling rich countries to support vulnerable countries in their ability to adapt to climate and protect biodiversity.
According to a report by the institute, it is also estimated that public climate financing of at least $1.3 trillion will be required each year by 2030.
In 2020 climate financing totaled $333 billion, well below the levels required to achieve this goal.
According to the Regime Change Lab, there are six major shifts in the finance sector that could fundamentally change how investments are measured and allocated for a sustainable future, including increased public and private financing for climate and nature.
Asim Al-Khouli / George Ibrahim
2023-08-22 13:25:00
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