MOBILISING PRIVATE SECTOR FINANCE
4.1
Financial innovation for climate investment and development
The world’s institutions must find new ways to support nature positive solutions in developing countries – reducing emissions is a collective concern that requires collective answers. Mark Carney, United Nations special envoy on climate action and finance
T he rapid growth of clean- energy investment must con- tinue. Global clean energy investment has grown over 40% since 2020, to $1.8 tril- lion, [and] is now almost twice the level of fossil fuel investment. This pace must be sustained so that clean energy investment reaches $4.5 trillion a year in the 2030s … Over the past two dec- ades, wind and solar are the fastest growing sources of electricity in his- tory. And battery deployment has been growing even faster over the last eight years. At COP28 [the 28th Conference of the Parties to the United Nations Frame- work Convention on Climate Change] countries agreed to “transition away from fossil fuels” and committed to triple global renewable energy capac- ity and double annual energy efficiency by 2030 … The world won’t get to net zero unless heavy emitting indus- tries also make their contributions. These industries generate a third of global emissions, and based on current trajectories those emissions will rise by over 30% by 2050 – putting the world’s climate goals out of reach. The challenges to decarbonising heavy-emitting industries are legion. They are hard to electrify. Reduc- ing emissions requires building new low-carbon manufacturing facili- ties, developing sustainable fuels and green hydrogen, and pursuing carbon- capture and storage …
Reducing emissions requires build- ing new low carbon manufacturing facilities, developing sustainable fuels and green hydrogen, and pursuing carbon-capture and storage. For all this, heavy emitters need finance – a lot of it. To tackle these challenges, the UAE [United Arab Emirates] COP Pres- idency and UN launched the Industrial Transition Accelerator (ITA), which I co-chair with Mike Bloomberg, Sul- tan Al-Jaber and Simon Steill. Already, 1,300 companies, representing almost 20% of global [emissions], are mem- bers of ITA partner organisations. The ITA will spring the transition traps for high-emitting sectors by bring- ing together the leadership across industry, finance, and governments to overcome the challenges of decar- bonisation in six sectors – aluminium, cement, chemicals, steel, aviation, and shipping – and their energy supply chain. We will focus on green demand, value chain orchestration, integrating new energy sources, and driving green industrial policies to attract transition finance on the huge scale required. To invest in a truly global transition, we need radical reform of the interna- tional financial system … To support the transition in the emerging world, the UAE launched the innovative $30 billion catalytic climate fund ALTÉRRA, with an ambi- tion to mobilize $250 billion by 2030 from private and institutional inves- tors. With its unique capped return
FINANCING NATURE POSITIVE SOLUTIONS MUST BECOME A MAJOR FOCUS OF CLIMATE FINANCE INNOVATION.
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Financing a Just Transition
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