$2.4trn investment needed yearly to achieve climate transition — UNFCCC

At least $2.4 trillion investment globally is needed yearly to achieve climate transition, Simon Stiell, the United Nations Framework Convention on Climate Change (UNFCCC) Executive Secretary, has said.

In a speech he gave at ADA University in Baku, Azerbaijan, building on last year’s COP28 and ahead of COP29 which holds this year in Baku, Stiell said: “What must we do this year to ensure the world’s shared goals remain within reach?

“We must spend the year working collectively to evolve our global financial system so it’s fit-for-purpose, with a clear plan to meaningfully execute the climate transition.

“Looking at the numbers, it’s clear that to achieve this transition, we need money, and lots of it – $2.4 trillion, if not more.”

The UNFCCC boss said that “$2.4 trillion is what the High-Level Expert Group on Climate Finance estimates is needed every year to invest in renewable energy, adaptation, and other climate-related issues in developing countries, excluding China.

“Whether on slashing emissions or building climate-resilience, it’s already blazingly obvious that finance is the make-or-break factor in the world’s climate fight – in quantity, quality, and innovation.

“In fact, without far more finance, 2023’s climate wins will quickly fizzle away into more empty promises. We need torrents – not trickles – of climate finance.”

Stiell added that “The New Collective Quantified Goal on Climate Finance must be agreed. Countries must be confident that they will be able to rapidly access sufficient concessional support.

“With finance, as with other commitments, transparency is essential for building trust, delivering impact and therefore forging more ambitious commitments.

“Climate finance must not be quietly pilfered from aid budgets. And it must be designed to be leveraged, driving and protecting development gains, whilst delivering concrete implementation of climate action.

“In parallel, clear progress must be made to address the assessment of investment risk, the allocation of Special Drawing Rights, innovative sources of financing from sectors, and creative mechanisms to tackle unreasonable debt burdens.

“2024 is the year multi-lateral development banks must demonstrate – with concrete actions – their centrality in the world’s climate fight, and their determination to deliver impact at scale.

“They should take bold steps towards financial innovation that will double, if not triple, their collective financial capacity by 2030 – particularly with respect to grants and concessional finance.

“Furthermore, they should commit to leveraging their engagement with the private sector to double and triple the overall rate of private capital mobilisation.”