Guest Q&A|Helena: Climate Finance Missing Those Who Need It Most

摘要：In the face of the climate crisis, closing the climate finance gap is a huge challengefacing developing countries. What challenges

In the face of the climate crisis, closing the climate finance gap is a huge challengefacing developing countries. What challenges does the international community face in implementing the new collective finance goals set at COP29 and improving the climate financesystem? How should Asian countries respond to these challenges?

Helena McLeod

Deputy Director General,Global Green Growth Institute (GGGI)

At COP29 the collective finance goals committed to are: Raise climate financing for developing countries threefold, from the previous goal of USD 100 billion annually, to USD 300 billion annually by 2035；and secure efforts of all actors to work together to scale up finance to developing countries, from public and private sources, to the amount of USD 1.3 trillion per year by 2035.

In 2022, the world mobilized an impressive USD 1.26 trillion for climate finance, nearly doubling the amount from the previous year. However, while this may seem like a cause for celebration, scientific evidence tells us we need to be mobilizing between USD 8.1 and 9 trillion annually to stay on track for a 1.5-degree scenario. This requirement will rise even further, reaching over USD 10 trillion per year between 2031 and 2050. So the first challenge is that even the quantum of money committed to is not enough to meet the need.

If that reality check wasn't sobering enough, there's another critical issue: we're directing climate finance to the regions that need it the least. A staggering 84% of climate finance is funneled into Western Europe, North America, and East Asia, leaving only 16% for the rest of the world. Even more concerning is that a mere 3% reaches the Least Developed Countries (CPI, 2023). To make matters worse, of the USD 1.26 trillion mobilized, only USD 62 billion—just 5%—was invested in building the adaptation and resilience of vulnerable communities and essential infrastructure.

The world has faced a number of economic challenges in recent years including covid and the following heavy debt burdens, wars in the Ukraine and Palestine and the domestic impacts and costs of extreme weather events. There are two particularly important areas of mobilizing climate finance, both areas that GGGI excels in.

i)Sustainable finance in particular mobilizing green and thematic bonds for climate objectives such as energy transition and rainforest protection.

ii)Originating and developing projects to bankability including in the energy, circular economy and climate smart agriculture spaces.

Another area of priority is carbon finance, this is where countries can sell carbon additional to their NDC commitments and receive money. Asia has an opportunity for a win-win investments in clean energy for job creation, energy security, and climate resilience.