COP26: Massive funding proposed by new alliance to help emerging economies make green transition

“The initiative brings together the critical stakeholders that must align and co-create a sustainable path for our nations and for our grandchildren,” Indonesian President Joko Widodo said, in endorsing the alliance.A US$10 billion package has been made available initially, from a variety of philanthropic partners, multilateral development banks, development financial institutions and national governments. It comes as the focus of global climate change talks at COP26 in Glasgow turned to mobilising the vast amount of finance needed to drive the world’s net zero ambitions.  FAST-TRACKING THE GREEN TRANSITION It is estimated that trillions of dollars will be needed, much of it by poorer nations, if the planet is to avoid catastrophic heat increases and the impacts that will result, including more intense weather events and rising sea levels. Much scrutiny and negotiating at the conference is centred on the US$100 billion promised by developed nations on an annual basis to help poorer countries meet the challenges of climate change. Since that pledge in Paris in 2015, that amount has consistently been under-delivered. Finance ministers at COP26 have been discussing how to use public funds to leverage enormous amounts of private finance that could prove key to fast-tracking the green transition. A coalition of the world’s biggest investors, banks and insurers aligned on Wednesday (Nov 3) under the Glasgow Financial Alliance for Net Zero, to ensure that their US$130 trillion in capital is used to target net zero emissions by 2050, putting climate change at the forefront of global financial decision making. “We now have the essential plumbing in place to move climate change from the fringes to the forefront of finance so that every financial decision takes climate change into account,” the leader of the group, Mark Carney said in a statement. OPPOSITION FROM ACTIVISTS It is a plan that was quickly condemned by environmental activists, including Greta Thunberg, who took aim at the industry’s reliance on carbon offsets and perceived corporate greenwashing and launched demonstrations through Glasgow streets.  Meantime, the GEAPP, which includes the Rockefeller Foundation, will aim to use initial grants to kickstart projects that can eventually be scaled up to a commercial level, drawing in even more funds. “This meeting and the politics of it simply have to generate a meaningful growth story for populations consistently left behind. We think we can make a difference,” Dr Rajiv Shah, the president of the foundation, told CNA in Glasgow. “We’re putting in US$500 million, we’ve raised a US$10 billion platform and the goal is to use that in catalytic ways to unlock even more commercial resources to scale this to one billion people.” The alliance wants to de-risk investments in countries that may not normally attract the types of investments that they need in the face of the climate challenge.

COP26: Massive funding proposed by new alliance to help emerging economies make green transition

“The initiative brings together the critical stakeholders that must align and co-create a sustainable path for our nations and for our grandchildren,” Indonesian President Joko Widodo said, in endorsing the alliance.

A US$10 billion package has been made available initially, from a variety of philanthropic partners, multilateral development banks, development financial institutions and national governments.

It comes as the focus of global climate change talks at COP26 in Glasgow turned to mobilising the vast amount of finance needed to drive the world’s net zero ambitions. 

FAST-TRACKING THE GREEN TRANSITION

It is estimated that trillions of dollars will be needed, much of it by poorer nations, if the planet is to avoid catastrophic heat increases and the impacts that will result, including more intense weather events and rising sea levels.

Much scrutiny and negotiating at the conference is centred on the US$100 billion promised by developed nations on an annual basis to help poorer countries meet the challenges of climate change. Since that pledge in Paris in 2015, that amount has consistently been under-delivered.

Finance ministers at COP26 have been discussing how to use public funds to leverage enormous amounts of private finance that could prove key to fast-tracking the green transition.

A coalition of the world’s biggest investors, banks and insurers aligned on Wednesday (Nov 3) under the Glasgow Financial Alliance for Net Zero, to ensure that their US$130 trillion in capital is used to target net zero emissions by 2050, putting climate change at the forefront of global financial decision making.

“We now have the essential plumbing in place to move climate change from the fringes to the forefront of finance so that every financial decision takes climate change into account,” the leader of the group, Mark Carney said in a statement.

OPPOSITION FROM ACTIVISTS

It is a plan that was quickly condemned by environmental activists, including Greta Thunberg, who took aim at the industry’s reliance on carbon offsets and perceived corporate greenwashing and launched demonstrations through Glasgow streets. 

Meantime, the GEAPP, which includes the Rockefeller Foundation, will aim to use initial grants to kickstart projects that can eventually be scaled up to a commercial level, drawing in even more funds.

“This meeting and the politics of it simply have to generate a meaningful growth story for populations consistently left behind. We think we can make a difference,” Dr Rajiv Shah, the president of the foundation, told CNA in Glasgow.

“We’re putting in US$500 million, we’ve raised a US$10 billion platform and the goal is to use that in catalytic ways to unlock even more commercial resources to scale this to one billion people.”

The alliance wants to de-risk investments in countries that may not normally attract the types of investments that they need in the face of the climate challenge.