COP26: Finance Ministers, Institutions Agree to Mobilise Funding for Large-scale Climate Action

•Commit $100bn to support developing countries
Chiemelie Ezeobi
in Glasgow, Scotland

Finance ministers across the globe as well as international finance institutions yesterday agreed to mobilise funding for rapid, large-scale climate action.

According to them, mobilising finance was critical if they are to deliver the urgent action needed to limit global temperature rises to 1.5C., adding that public and private finance could lead the transition to a net zero, climate resilient world.

They further posited that trillions of dollars of additional investment a year were needed to secure a low-carbon future and support countries already living with the devastating impacts of climate change.

Addressing newsmen, COP26 President Alok Sharma, said already, there were more public and private finance for climate action than ever before, “but to meet the commitments made in the Paris Agreement and keep 1.5 alive, we need developed countries to deliver on public finance, and to unleash the trillions required in private investment.
“That is why we have made finance such a key focus of COP26, why these new commitments from nations and the private finance sector are so welcome and why we continue to push for countries to do more to meet their finance obligations.

“I am delighted that work is underway to mobilise finance into developing countries to help with their energy transition. Countries are telling us what they need, now global finance needs to respond”.
On meeting the $100 billion commitment and financing adaptation, countries made new commitments to increase finance to support developing countries to deal with the impacts of climate change.

This included a commitment from Norway to triple its adaptation finance, commitments from Japan and Australia to double their adaptation finance, and commitments from Switzerland, the US and Canada for the Adaptation Fund.

Also, this included the largest US adaptation finance commitment to date, to reduce climate impacts on those most vulnerable to climate change worldwide. While Canada committed to allocate 40 per cent of its climate finance to adaptation.

New commitments for climate financing also came from the United Kingdom, Spain, Japan, Australia, Norway, Ireland and Luxembourg, which build on the plan set out ahead of COP26 to deliver the $100 billion per year to developing countries.

Similarly, to combat the difficulties many countries were facing with the bureaucracy of securing climate investment, £100 million in new funding from the United Kingdom was announced yesterday to support the approach of the Taskforce on Access to Climate Finance, co-chaired by the UK and Fiji.
The taskforce launched a partnership with five ‘pioneer countries’ – Bangladesh, Fiji, Jamaica, Rwanda and Uganda – to support them and their local communities to get the finance they need for their climate plans.

On public finance for a net zero future and the direct benefits of what public climate financing could achieve, leaders from South Africa, the United Kingdom, the United States, France, Germany and the European Union announced a ground-breaking partnership to support South Africa with an accelerated just energy transition.

THISDAY gathered that as a first step, the international partnership announced that $8.5 billion could be made available over the next three to five years to support South Africa – the world’s most carbon-intensive electricity producer – to achieve the most ambitious emissions reduction target within its upgraded and ambitious nationally determined contribution.

Also, on mobilising private finance, the finance ministers agreed that the billions of dollars in public finance must be used to leverage the trillions of dollars in private finance needed for a climate resilient, net zero future, and how to support developing countries to access that finance.

The United States, the European Commission and the UK also committed to work in partnership with countries to support a green and resilient recovery from COVID-19 and boost investment for clean, green infrastructure in developing countries.

Meanwhile, the UK committed £576 million at COP for a package of initiatives to mobilise finance into emerging markets and developing economies, including £66 million to expand the UK’s MOBILIST programme, which helps to develop new investment products which can be listed on public markets and attract different types of investors.

There was also the launch of an innovative new financing mechanism – the Climate Investment Funds’ Capital Markets Mechanism (CCMM) – that will boost investment into clean energy like solar and wind power in developing countries.
In aligning private finance to net zero, private financial institutions also took a major step to ensure that existing and future investments are aligned to the global goal of net zero.