UN Secretary-General António Guterres has said that COP29 must “tear down the walls to climate finance”, noting that last year, developing markets received just 15 cents for every dollar invested in clean energy globally.
While developing countries are “eager to act” on energy transition measures, Guterres added that they are facing a multitude of obstacles, including “scant public finance, raging cost of capital, crushing climate disasters, and debt servicing that soaks up funds”.
This is leading to a “tale of two transitions”, with climate adaptation the preserve of the wealthy – a situation that needs to be put right at COP29.
“Developing countries must not leave Baku empty-handed,” he added. “A deal is a must. We need a new finance goal that meets the moment.”
Urgent action
Guterres was speaking at the World Leaders’ Climate Action Summit Opening Ceremony at COP29, where he stressed the urgency of immediate action to keep the global temperature rise within the 1.5 degrees Celsius target. He underscored that to achieve this goal, global emissions need to decrease by 9% annually. This equates to an ambitious overall reduction of 43% by 2030 compared to 2019 levels.
“The sound you hear is the ticking clock,” the UN head put it. “We are in the final countdown to limit global temperature rise to 1.5 degrees Celsius. And time is not on our side.”
Five elements for success
During his address, Guterres identified five elements that are “critical to success” when it comes to developing and implementing an effective climate finance structure.
First, he called for a substantial increase in concessional public finance, which provides loans at favourable terms, essential for supporting climate resilience and transition in lower-income regions. Second, he emphasised the need for public finance mechanisms that can catalyse the trillions of dollars required to meet the needs of developing countries, creating a bridge between public funds and private investment on a massive scale.
Third, he highlighted the importance of innovative funding sources, suggesting levies on sectors like shipping, aviation, and fossil fuel extraction—principles based on the notion that polluters should bear a greater share of the costs.
The fourth element involved creating a framework to ensure greater accessibility, transparency, and accountability in climate finance. Finally, Guterres called for enhancing the lending power of Multilateral Development Banks (MDBs). He proposed significant recapitalisation and reforms to MDBs’ business models, enabling them to mobilise much larger amounts of private finance and thus better support ambitious climate initiatives.
“The resources available may seem insufficient,” Guterres noted. “But they can be multiplied with a meaningful change in how the multilateral system works. Big sums require big change. […] On climate finance, the world must pay up, or humanity will pay the price.” [Photo: UN Climate Change]
