Developing and emerging countries excluding China need investments well beyond $2 trillion annually by 2030 to cut greenhouse gas emissions and cope with the effects of climate breakdown, according to a United Nations-backed report.
“The world needs a breakthrough and a new roadmap on climate finance that can mobilize the $1 trillion in external finance that will be needed by 2030 for emerging markets and developing countries (EMDC) other than China,” said the report jointly commissioned by UK and Egypt and presented at the Cop27 UN climate summit in Sharm-el-Sheikh.
Current investments, to tackle with climate change, in emerging and developing economies other than China stand at about $500bn, according to the report jointly commissioned by UK and Egypt and presented at the Cop27 UN climate summit in Sharm-el-Sheikh.
The report proposed that a trillion dollars should be contributed by rich countries, investors and multilateral development banks, while the remaining money must originate locally from private and public sources.
“Around half of the required financing can be reasonably expected to come from local sources, from strengthening domestic public finance and domestic capital markets, including tapping into large pools of local finance that national development banks are able to mobilize,” the report said.
The collected money will help the developing countries in following environment friendly projects mentioned in the report. The proposed projects included:
- Switching away from fossil fuels
- Investing in renewable energy and other low-carbon technology
- Coping with the impacts of extreme weather
The report presented in the COP27 summit is among the first to map out the finances needed across the three broad areas covered in UN climate talks:
- Reduction of the greenhouse gas emissions that drive warming (mitigation)
- Adapting to future climate effects (adaptation)
- Compensating poor and vulnerable nations for unavoidable damages already incurred, known as “loss and damage”
Vera Songwe, one of the report leads, highlighted that financing alone is not enough to tackle with climate change issues, rather it must be coupled with the right instruments and good policies to accelerate and scale up impact. Unlocking substantial climate finance is key to solving development challenges today, Songwe added.