Investment in climate action needs to increase across all global economies, with between $6.3 trillion and $6.5 trillion per year needed by 2030 to meet climate targets in advanced economies, China and developing countries.
That’s according to the Independent High Level Expert Group (IHLEG) on Climate Finance, launched by the COP26 and COP27 presidencies, which has released its third report, updating its previous estimates of investment requirements for climate action.
‘Investment imperative’
The report, published during COP29, delves into both the ‘investment imperative’ for climate action and the significant opportunities that climate finance offers. Key pathways identified for accelerating delivery include unlocking investment at scale, managing debt burdens, and leveraging the roles of multilateral development banks and other financial entities to maximise impact.
Furthermore, the report underscores the critical importance of tracking and monitoring the progress of these financial commitments to ensure transparency and accountability as they are implemented.
It suggests that the largest increase in investment will be required in developing markets other than China – countries that typically have low investment levels, significant development need, and are projected to contribute as much as 50% of global emissions by 2030.
Climate stability
‘Any shortfall in investment before 2030 will place added pressure on the years that follow, creating a steeper and potentially more costly path to climate stability,’ the report finds’ ‘The less the world achieves now, the more we will need to invest later. Delayed action means we will need to mobilise even larger sums in shorter timeframes to catch up on critical targets.
‘Additionally, investment needs for adaptation and resilience, as well as loss and damage and restoration of nature, will rise sharply as climate and nature risks escalate.’
The IHLEG, co-chaired by Amar Bhattacharya, Vera Songwe and Nicholas Stern, has been supporting the deliberations on the climate finance agenda under successive COP Presidencies since COP26. It was formed to develop and present policy options and recommendations aimed at mobilising public and private investment to fulfil the commitments, ambitions, and targets set by the Paris Agreement, as strengthened by subsequent frameworks such as the Glasgow Climate Pact, the Sharm el-Sheikh agenda, and the COP28 Global Climate Finance Framework.
The report is published as countries negotiate at COP29 a ‘new collective quantified goal’ (NCQG) for financial support for developing countries beyond 2025. Read more here. [Photo: UN Climate Change]
