World leaders are converging in Sharm el Sheikh, Egypt, to figure out how to mitigate the impact of climate change — or global warming — by reducing emissions, financial support is needed to address these concerns. It’s a widely held view that suitable infrastructure needs to be built to promote green energy in order to reduce emissions, for which, in turn, the World Bank says that all the countries need to make investments to the tune of $ 90 trillion by 2030.
The World Bank has found that these investments can be recovered through a transition towards a green economy. This transition can create newer economic opportunities and jobs, it notes.
This concept is known as climate funding and it is one of the significant to-do points in the ongoing COP27 summit.
Money needed to fight climate change
The climate crisis calls for collaborative action from all countries, cities, financial actors, businesses and private citizens. Among these concerted efforts, developed countries had committed to jointly mobilise $ 100 billion per year by 2020 from a variety of sources, to address the pressing mitigation and adaptation needs of developing countries, the United Nations said.
There has been a surge in interest from companies and some major investors in adopting sustainable business plans that are compatible with a 1.5°C future, as decision-makers recognise the vast growth opportunities ahead in the global transition to a decarbonized economy by 2050. However, much wider progress is needed, and the journey of companies and investors, in aggregate, is only in its early stages, the UN says.
“The world leaders who are meeting in Sharm el Sheikh, Egypt, to discuss the global climate negotiation during COP27, must acknowledge that the climate crisis needs immediate systemic solutions rather than more announcements without any impactful action. They must deliver and align with the principle of loss and damage, mitigation and adaptation, and climate justice. All countries should contribute in a just and fair manner to phase out fossil fuels dependence and implement strict actions to halve emissions by 2030, on the way to phasing out emissions completely,” said Avinash Kumar, the head of the climate and energy campaign at Greenpeace India.
Big pension funds and investment firms that acknowledge that their portfolios are now more aligned with a “3.5° future” are now starting to move at scale by working with the asset managers and companies in their portfolios to decarbonise and align with net-zero targets.
What is a ‘3.5° future’?
A “3.5° future” refers to the rise in global temperatures by 3.5°C over the next 25 years, which the International Energy Agency had said on 11 November 2010. It meant that governments worldwide would have failed in their pledge to hold global temperature at a 2-degree increase if state policies and actions continued in the shape they were in 12 years ago.
Kumar says that most developed countries did not meet their commitment to mobilise $ 100 billion per year by 2020 to support developing countries to mitigate and adapt to climate change. “They are certainly not doing enough on their commitments. This (COP27 summit) is the last chance for developed countries to ensure low-income countries have access to the necessary resources to prepare themselves for the adverse effects of climate change and to decarbonise their economies.
“The next few years are going to be crucial to tackle climate change. There is an urgent need to transform sectors such as energy, transport, agriculture, food, land use etc from carbon-intensive to carbon sequestering,” Kumar cautioned.