The urgent need to raise the cash needed to meet the Paris Agreement goals – and support action by developing countries – took centre stage during COP 23’s final week.
High-level representatives from across the finance sector stressed that every dollar invested in cutting greenhouse gas emissions and adapting to climate change ‘gets double the bang for the buck’ because it directly supports the international community’s 2030 Agenda for Sustainable Development.
‘We need all financial players – public, private, domestic, international – and including markets and regulators, to work together effectively to mobilise at least $1.5 trillion in climate finance that is needed every year.’
Head of Finance Initiative at the UN Environment Programme (UNEP)
According to the UN Climate Change (UNFCCC) secretariat, finance for climate is flowing at a greater pace than ever.
Markets for renewable energy, electric vehicles, green buildings and climate-smart agriculture are seeing strong growth, and being backed by advances in innovative green financial instruments and markets.
Equally, the finance sector is recognising where and how climate change presents risks to its existing investments, and understanding the need to adjust their portfolios away from carbon-intensive assets in order to reduce that risk.
However, much more is needed to secure finance and investment at the scale required to deliver a fully decarbonised 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. The key is to get the funding to flow so that everyone everywhere can benefit from low-carbon and climate resilient investments.’
Vice-president of sustainable development at the World Bank
Peter Damgaard Jensen, CEO of the Danish pension provider PKA and chair of the Institutional Investors Group on Climate Change (IIGCC) said at a press conference that ‘it is extremely important that there is a significant increase of investor awareness and action with regards to supporting the transition […] to a low carbon economy’.
He added that strong investment signals from policymakers across carbon trading, energy, transport and buildings ‘are essential to unlock the necessary capital.’
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