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UN Secretary General calls for increased climate financing

09 February 2021 Amena Saiyid

UN Secretary General António Guterres called on major economies to ramp up financing for projects that help communities adapt to a changing climate and mitigate the disastrous effects of global warming.

During a joint briefing with Alok Sharma, president of the 26th Conference of the Parties of the United Nations Framework Convention on Climate Change (COP-26), on 8 February, Guterres also urged multilateral banks to increase the share of adaptation and resilience finance to at least 50% of their climate finance support.

The COP-26 meeting that was postponed due to the global pandemic is now scheduled for November 2021 in Glasgow, UK. The meeting, which the UK and Italy are cohosting, is seen as a critical event for securing greater progress toward the non-binding 2015 Paris Agreement goal of limiting the global rise in temperatures to 1.5 degrees Celsius or well below 2 degrees Celsius.

Guterres reminded G7 members in particular about the pledge they made 10 years ago to provide $100 billion each year in climate finance to countries that can ill afford to protect themselves against hurricanes, typhoons, and other climate change impacts. "We have a moral obligation to do much better, and with new and scaled up finance initiatives and instruments," he said.

Funding for the Small Island Developing States and Least Developed Countries stands at a paltry 2% and 14%, respectively. He said the member countries must reach an agreement on climate financing before COP-26 instead of waiting to negotiate when the meeting occurs.

In addition, Guterres warned that the world remains "way off target" for staying within the 1.5 C limit of the 2015 Paris Agreement.

Since the adoption of the Paris Agreement, more than 100 jurisdictions have announced goals to reach net-zero emissions by midcentury, including six of the 10 largest emitters: China, the United States, Japan, Brazil, Canada, and the European Union. Those 100 jurisdictions represent about 70% of the global economy and 65% of greenhouse gas emissions, he said.

Net-zero emissions refer to the greenhouse gases, notably carbon dioxide, released by human activities that are not eliminated through mitigation efforts. Rather these GHGs are balanced out by removing an equivalent amount from the atmosphere. This must become "the new normal for everyone, everywhere" in every country, company, city, and financial institution, as well as key sectors such as aviation, shipping, industry, and agriculture, Guterres said.

More 'ambition' needed

"This is why we need more ambition—more ambition on mitigation, ambition on adaptation, and ambition on finance," he said. "The global coalition for net-zero emissions needs to grow, to cover more than 90% of the emissions."

At the same time, Guterres said countries must commit to net-zero carbon goals that must be "underpinned by clear and credible plans to achieve them."

Countries can do their part by ending financing of new fossil fuel-fired power projects and redirecting their investments toward the clean energy transition, he added.

An IHS Markit analysis of net-zero targets set by countries, however, found that hydrocarbons (oil, natural gas, and coal) still make up 80% of primary energy production.

"Although renewables such as wind and solar are the fastest rising sources of new energy supply, and electric vehicle sales are rising far faster than sales of conventional gasoline and diesel-powered vehicles, the massive fleet of cars and trucks already on the road, plus the vast extent of existing energy infrastructure and equipment do not turn over quickly. For this reason, it will take years to see meaningful change," wrote Christopher Elsner, associate director for IHS Markit climate and sustainability, Susan Farrell, vice president for climate and sustainability, and Rick Vidal, a director in the same group, in a 3 February insight piece.

Recommitting the US

Since assuming office on 20 January, President Joe Biden has recommitted the US to tackling climate change in the international arena, not just through promises, but through concrete measures.

In a 27 January executive order, Biden said he had directed Special Climate Envoy John Kerry to work with heads of multiple federal agencies including the US State and Treasury departments to develop a climate financing strategy by May.

This plan would outline how the US, through multilateral and bilateral channels, would assist developing countries in "implementing ambitious emissions reduction measures, protecting critical ecosystems, building resilience against the impacts of climate change, and promoting the flow of capital toward climate-aligned investments and away from high-carbon investments."

The same order also directed Secretary of the Treasury Janet Yellen to develop a strategy for the US to exercise its "voice and vote" at international financial institutions like the International Monetary Fund and the World Bank to promote financing, economic stimulus, and debt relief packages that are aligned with and support the goals of the Paris Agreement.

Posted 09 February 2021 by Amena Saiyid, Senior Climate & Energy Research Analyst, IHS Markit

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