electra-supply.comBennett Oghifo
In a recent statement, Simon Stiell, the UN Climate Change Executive Secretary, emphasized the critical need for enhanced global climate finance to avert economic collapse in both developed and developing nations. Speaking at a virtual event hosted by the Brookings Institution on October 17, 2024, Stiell declared, “International climate finance must grow up, step up, and scale up, to meet this moment.”
Stiell outlined the current state of climate finance, its future trajectory, and the necessary changes required to ensure funding reaches all sectors of every economy. He referenced a report from the Organisation for Economic Co-operation and Development (OECD), highlighting that developed countries mobilized over $100 billion in climate finance to assist developing nations in 2022.
He stated, “We simply can’t afford a world of clean energy haves and have-nots. In a two-speed global transition, pretty soon everyone loses. The only way to prevent the climate crisis from severely impacting economies—large and small—is to ensure that every nation can reduce greenhouse gas emissions and enhance climate resilience. Trillions more are needed to safeguard the global economy, and the cost of action will be a fraction of what nations will face if the climate crisis continues to escalate, affecting lives and livelihoods year after year.”
Looking towards the future, Stiell pointed out the progress made over the last decade, noting that global climate action investments surpassed a trillion dollars last year, a remarkable increase from a few hundred billion just ten years prior. “This progress came from first-movers and strategic governments that recognized an opportunity and acted on it. However, compared to what is necessary, this is still far from sufficient.”
He continued, “This year alone, we’ve witnessed hundreds of billions of dollars in damages across both wealthy and poor countries, significantly exacerbated by devastating storms like Hurricane Milton and Helene. My home island, Carriacou, was hit directly by Hurricane Beryl just months ago. Even nations that escaped direct damage are grappling with inflation due to disrupted supply chains.”
Stiell identified the upcoming World Bank Annual Meetings from October 25 to 27, 2024, as a pivotal opportunity for transformation. He stated, “Multilateral Development Banks will be central to this transition. Recently, the World Bank announced plans for increased concessional lending for climate initiatives, and the IMF is exploring ways to integrate climate action into their work.”
However, he cautioned, “Incremental increases in climate finance are insufficient for achieving exponential growth in investment. We need to act quickly; without a significant scaling up, all economies are at risk. Many countries are trapped in debt crises, restricting their ability to invest in climate action.”
Stiell insisted that during the Annual Meetings, there must be clear indications from the World Bank and IMF that funding and fiscal space for climate action will be prioritized for developing countries, rather than perpetuating crippling debts and high capital costs. “Initiatives like debt relief and the introduction of climate-related debt clauses are essential starting points, as is replenishing the World Bank’s International Development Association.”
He highlighted the responsibility of G20 countries, the largest shareholders in Development Banks, to ensure proper funding and advocate for broader reforms in the international financial system while also seeking innovative financing solutions. “Under Brazil’s G20 leadership, collaboration between climate and finance ministers has finally begun. This essential partnership must continue to yield tangible results.”
Stiell warned that failure in climate finance negotiations could jeopardize critical elements of the Paris Agreement. “Ambitious outcomes at the Annual Meetings are crucial for enabling bold climate actions that will benefit economies and strengthen societies everywhere.”
Looking ahead to COP29, set for November 2024 in Baku, Azerbaijan, he asserted that all governments must reach a consensus on a new international climate finance goal that genuinely meets the needs of developing countries. “COP29 must be a moment of accountability, acknowledging that climate finance is vital for saving lives and livelihoods from the devastating impacts of climate change. While I won’t speculate on what the new goal should entail, it’s clear that public finance must be at the heart of it.”
He called for the majority of this financing to be in the form of grants or concessional loans, ensuring accessibility for those who need it most. “We must also maximize the impact of climate investments by attracting private finance and signaling to markets that investing in green initiatives yields substantial returns.”
Stiell emphasized the urgency of reaching agreements in Baku on funding, while clarifying that the aim is not to renegotiate the Paris Agreement. He also highlighted the necessity of mechanisms to track and ensure promised funds are delivered on time. “We must rapidly increase support for adaptation, activate international carbon markets, and fund a new wave of national climate plans to build on the progress made at COP28 and turn our pledges into real outcomes.”
He acknowledged the profound divisions among nations and within them, warning against the temptation to retreat inward during these challenging times. “Such an attitude would undermine our global climate efforts. Instead, we must seize this opportunity for transformative climate finance, which aligns with the interests of every nation and can yield benefits universally.”
Stiell concluded by urging global leaders to adopt a solution-oriented approach, emphasizing that proactive climate action can lead to stronger economic growth, job creation, improved health outcomes, and accessible clean energy for all nations. “This is the only way forward to ensure the survival and prosperity of every nation.”
