Cop28 and UN to draft climate finance framework

Reuters/Orhan Qereman

• New recommendations to tackle global warming
• Reforms must ‘unlock supercharged stream of capital’ 
• Developing nations face $2.2trn funding shortfall

United Nations economists, the Cop28 leadership and other institutions including the World Bank and International Monetary Fund, have agreed to draw up recommendations to reform climate finance.

The planned changes come amid concerns that the billions pledged by developed nations to tackle global warming are falling short.

The recommendations – to be shared and discussed during the Cop28 climate change conference in Dubai this year – would form the basis of a new global framework for international climate finance, the Cop28 organising body said. 

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Cop28 last week convened a two-day meeting in Abu Dhabi. In attendance were the UN’s Independent High-Level Expert Group of economists, the IMF, World Bank, International Finance Corporation, European Climate Foundation, the UN Climate Change High-Level Champions, and the previous Cop27 presidencies. 

The parties agreed to deliver their recommendations for reforming climate finance at Cop28, and to work together on a definitive roadmap for implementing them. 

The framework is expected to include ways to address debt distress in vulnerable countries, the role of the private sector in delivering increased financing to mitigate the negative impacts of climate change, and other issues. 

It will be designed to guide all participating institutions – plus other UN agencies, regional bodies, national governments, the private and third sectors – as they take short and long-term steps to reach the goals set by the 2015 Paris Agreement. 

“This new framework needs to be comprehensive,” said Cop28 president-designate Sultan al Jaber this week. “It needs to cover both adaptation and mitigation. And it needs to unlock a supercharged stream of private capital. 

“All forms of finance must be made more available, more accessible, and more affordable. MDBs [multilateral development banks] must be adequately capitalised and provide much more concessional finance to lower risk and bring more private capital to the table. 

“And we need to explore innovative new mechanisms for managing currency risk. I am confident that the assembled experts who have devoted their time to this effort will find solutions to unlock climate finance.”

The core of the Cop28 agenda

A report by the UN Conference on Trade and Development last month found that developing countries, including those in the Middle East, will face a combined annual $2.2 trillion investment shortfall by 2030 in meeting sustainability and energy transition goals set by the UN.

Worldwide the figure is $4 trillion. The largest gaps are in energy, water and transport infrastructure. 

Developed nations have already pledged to contribute $100 billion a year to keep the global temperature increase at the maximum 1.5C set by the Paris Agreement. 

The parties involved in the Cop28 talks this week said that, while private finance flows are growing, they need to grow much faster if they are to meet the estimated investment shortfall. 

“For too long, climate finance has divided the international community and held back progress in tackling climate change and supporting countries most impacted by it,” Al Jaber said.

“But climate finance is the issue that lies at the core of the Cop28 agenda because finance is how we transform goals into reality. The time for action is right now.” 

Cop28’s director general Majid Al Suwaidi agreed earlier this month that the stalled $100 billion a year funding pledge by developed nations falls far short of the trillions of dollars actually needed to battle climate change.