Accelerate climate finance or risk developing countries' ambition
Participants walk outside of the Sharm El Sheikh International Convention Centre before the COP27 climate summit opening in Egypt's Red Sea resort of Sharm el-Sheikh, Egypt November 6, 2022. REUTERS/Thaier Al-Sudani
Success at COP27 needs more than just new pledges as vulnerable regions receive less than 25% of international climate finance
Matthew Samuda is Minister without Portfolio in the Jamaican Ministry of Economic Growth and Job Creation, and Co-Chair of the NDC Partnership.
As global leaders continue to gather for COP27 in Sharm El Sheikh, Egypt, we can’t overlook the fact that there are still trillions of dollars needed by developing countries to meet the mitigation and adaptation ambitions of their Nationally Determined Contributions (NDCs).
If developing countries cannot access climate finance, our current commitments and future determination to raise the ambition of our climate goals are at risk.
Jamaica’s ecosystems, economic growth, and social development have already been impacted by droughts, floods, tropical storms, and hurricanes. With each passing year, threats to our population’s food security, water resources, health outcomes and livelihoods have become increasingly existential. These climate hazards underscore that rapid and effective climate action is not optional: it’s an urgent need, and a top development priority.
The financing required to safeguard the 1.5 degrees Celsius threshold falls far too short—even as we hear that finance is readily available for new investment opportunities. If we are to see success at COP27, we need more than new pledges. We must position developing countries to access finance and encourage financiers to deploy investments so countries can deliver on their climate goals.
There is still time to act. Climate finance commitments steadily increased over the last decade, reaching an all-time high last year, much of which has been in the form of loans. Yet, significantly more is needed to prevent a high-risk climate future with catastrophic consequences. To meet our internationally agreed climate objectives by 2030, annual climate finance flows must grow seven-fold and be deployed at speed and scale.
We also need to ensure that all countries in need of climate finance are able to access it with ease and predictability. Less than 25% flows to the more vulnerable regions where the majority of low- and middle-income countries are located.
To finance the adaptation needs of developing countries, the NDC Partnership is working with the United Nations Secretary-General, the United Nations Development Programme and the Green Climate Fund, piloting innovative approaches to turn adaptation priorities into viable investment plans and project pipelines. This is just one example of the collaboration urgently required to finance climate action.
What can be done
Overcoming the climate finance challenge and ensuring more funds flow to developing countries—and faster—demands new approaches to bringing countries and financiers together. We can build on the success the NDC Partnership has in supporting more than 80 countries around the world.
On behalf of the NDC Partnership, we propose the following:
First, we eliminate barriers to accessing finance and enhance countries’ financial readiness. This can be achieved by building capacity in key government ministries and agencies, by integrating climate priorities into government processes, policies, and budgets, by developing adequate enabling environments, and by strengthening investment planning and project development.
Second, we provide dedicated support for project development and drive innovation through blended finance models to manage risk. Collaboration among a broad range of actors, including the private sector, multilateral development banks, multilateral funds, and philanthropies, among others is fundamental.
Finally, we strengthen engagement between countries and financiers to better match funding opportunities to critical projects through increased transparency and collaboration. This may include shepherding projects through the entire process: from investment planning and project development to matching them with funding.
We need investment now, and at an unprecedented scale, to ensure that the Paris Agreement’s targets remain in sight. Beyond anticipated financial pledges, we need coordinated action. All stakeholders, domestic and international, public and private, must step up. We must all work with countries to improve enabling environments through innovative solutions, and to develop ambitious investment plans and project pipelines.
This is the message we bring to COP27.
Any views expressed in this opinion piece are those of the author and not of Context or the Thomson Reuters Foundation.
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