INTRODUCTION: ACHIEVING ADEQUATE, AMBITIOUS CLIMATE FINANCE
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A moment of profound fracture
To avoid falling into a world of clean energy haves and have- nots, we must scale up interna- tional climate financing.
I n the past decade we’ve seen some real progress [on climate finance]. Over a trillion dollars was invested in climate action last year glob- ally. Up from a few hundred billion a decade ago. According to the OECD [Organisation for Economic Co-operation and Devel- opment], in 2022 developed countries provided and mobilised more than $100 billion in climate finance to developing countries. We got this far because first-movers and smart governments – who had the means – seized their chance. They saw the opportunity and grabbed it. But … this is nowhere near enough. This year we’ve seen hundreds of bil- lions of dollars of damage to countries rich and poor. So many have suffered from Hurricane Milton and Helene’s devastating dam- age. My own home island of Carriacou took a direct hit from Hurricane Beryl only a few months ago. And even those who’ve avoided direct damages have been hit hard by inflation as supply chains are blocked and broken. We simply can’t afford a world of clean energy haves and have-nots. In a two- speed global transition, pretty soon everyone loses. Because we can only prevent the climate crisis from decimating all econ- omies – including the largest – if every nation has the means to slash green- house gas pollution and boost climate resilience … Doing so is a crucial investment to pro- tect the global economy, and will be a fraction of the costs every nation will pay if we allow the climate crisis to keep run- ning rampant, devastating more and more lives and livelihoods every year … International climate finance must grow up, step up, and scale up, to meet this moment …
Multilateral Development Banks will be at the heart of this transition. Just this week the World Bank announced more concessional lending for climate. And the IMF [International Monetary Fund] is looking at ways to incorporate climate action and risks right across their work. This is good news. But incremental increases won’t lead to an exponential surge of investment and green growth. On climate finance, we have a need for speed, and without much larger scale, all economies will fail. So many countries are fac- ing debt crises that amount to fiscal straight-jackets, making it near- impossible to invest in climate action. … We must see further signals that the World Bank and IMF are committed to ensuring developing countries have funds and fiscal space for climate action and investment, not devastating debts and sky-high costs of capital. Debt relief and introducing more climate-related debt clauses are a start. So is replenishing the World Bank’s International Development Association. And it’s not just up to development banks. The G20 countries are their larg- est shareholders and must fund them properly and demand more, includ- ing wider reforms to the international financial architecture, while also work- ing to find new and innovative sources of finance. Under Brazil’s G20 leadership, climate and finance ministers have finally been brought together. This essential collab- oration must continue and be translated into clear outcomes. Progress on climate finance outside our negotiation process enables break- throughs within it and vice-versa. If we fail at either, it could be a knock-out blow to crucial parts of the Paris Agreement. So ambitious outcomes … are vital to
Simon Stiell, executive secretary, UN Climate Change
BECAUSE WE CAN ONLY PREVENT THE CLIMATE CRISIS FROM DECIMATING ALL ECONOMIES – INCLUDING THE LARGEST – IF EVERY NATION HAS THE MEANS.
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Financing a Just Transition
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