Earth Today | Bridging the climate ambition, finance gaps
RAISING AMBITION to act on climate change and the needed finance to do it are so interconnected that governments and the entire financial sector must see it as a single challenge.
This was the message from Monday's deliberations at the global climate talks being held in Bonn, Germany.
The day, designated 'Finance for Climate Day', saw high-level representatives from across the sector underlining that this challenge of coordination and coherence needed to be quickly addressed, even as they highlighted their own efforts to meet the goals of the Paris Agreement.
"At the heart of the climate challenge are two gaps we urgently need to bridge: the ambition and the investment gap. It is up to national governments now to increase the ambition of their NDCs (nationally determined contributions to greenhouse gas emissions) to close the emissions gap that we still face for 2030," Eric Usher, head of UNEP Finance Initiative, said in a UN Climate press release.
"When it comes to the investment gap, however, we need all financial players - public, private, domestic, international, and including markets and regulators - to work together effectively to mobilise at least US$1.5 trillion of climate finance that is needed every year. Let this Finance Day be the start of a new and determined chapter of climate finance innovation, collaboration, and impact," he added.
What is more, every dollar invested in cutting GHG emissions and adapting to climate change reportedly gets double the bang for the buck, because the results directly support the only sustainable future possible, which is captured in the international community's 2030 Agenda for Sustainable Development.
"Finance for climate is flowing at a greater pace than ever, with vibrant and growing markets for renewable energy, electric vehicles, green buildings and climate-smart agriculture seeing aggressive growth, backed by exponential advances in innovative, green financial instruments, indices and markets," the release noted.
"Equally, the finance sector is recognising to a much greater degree where and how climate change presents risks to its existing investments and the need to adjust their portfolios away from carbon-intensive assets to reduce that risk," it added.
However, as a series of discussions at Monday's talks highlight, much more is needed to secure finance and investment at the scale required to deliver a fully de-carbonised and climate-resilient global economy by 2050.
"The potential for climate-friendly investment in areas such as clean energy and climate-smart agriculture is enormous," said Laura Tuck, vice-president sustainable development at the World Bank.
"The key is to get the funding to flow so that everyone everywhere can benefit from low-carbon and climate-resilient investments. That's why we are working with the UN and our other development partners to create the conditions that will attract investors and to get all forms of finance - public, private, philanthropic - working together for maximum impact," she added.