UAE pledges to kickstart ‘new climate economy’

Jakub Porzycki via Reuters Connect

• UAE Declaration launched
• Altérra fund worth $30bn
• Aims to help Global South

The UAE has announced a package of funding initiatives aimed at mobilising finance reform to create a “climate economy” – one of the main aims of Cop28. 

In a speech to delegates of the UN climate summit, Cop28 president Sultan Al Jaber launched the official UAE Declaration on a Global Climate Finance Framework – an agenda for financing the low-carbon and climate action economy. 

“We all know climate finance is not available, accessible or affordable enough. This is impacting lives and livelihoods across the Global South,” Al Jaber said. “The declaration is a framework for financing a new climate economy.” 

Among the initiatives announced as part of the new framework was the UAE’s launch of a $30 billion fund, called Altérra, to “steer private markets at scale towards climate investments”, the Cop28 presidency said. 

The Altérra fund, launched in partnership with BlackRock, TPG and Brookfield, will focus on emerging markets and developing economies. Its priorities mirror those of the summit: energy transition, industrial decarbonisation, sustainable living and climate technologies. 

Examples of investments being explored by Altérra include an African developer of wind and solar projects, and a Latin American rural electrification platform aiming to provide electricity to 1 million people. 

The UAE’s $30 billion commitment is expected to mobilise a further $250 billion of private sector investment by 2030. 

Another pledge made as part of the framework was the UAE’s commitment of an additional $200 million of “special drawing rights” (a form of international money convertible into multiple currencies) to the International Monetary Fund’s Resilience and Sustainability Trust. This trust aims to support climate resilience in developing countries. 

The UAE also launched the Global Climate Finance Centre, a private-sector think tank for climate finance reform, described as a first of its kind in the region.

It will aim to provide research and capacity building to increase high-growth low-carbon investments in the region and globally.

The announcements follow the official approval of the United Nations Loss and Damage Fund – targeted at $100 billion – to help vulnerable countries recover from damage caused by climate change. Its exact details are yet to be worked out. 

Among the financial aims of the Cop28 summit are to ensure that wealthy nations double their financing for climate adaptation.

They finally met a $100 billion a year pledge to support developing nations last year, two years later than promised, according to a report by the OECD in October.