The 3rd of November, within the framework of COP26, international financial leaders met in Glasgow to discuss the responsibility of the public and private financial sector, in the form of consistent flows of investments, in reaching the net-zero target and in limiting temperature rise to 1.5C. Countries made consistent commitments to support developing countries. Among these, the US proposed their largest adaptation finance until now, while countries such as Japan and Australia committed to double their investments. The Climate Finance Delivery Plan, published last week by the COP26 Presidency, depicts the trajectory of a plan for developed countries to deliver 100$ billion a year to support developing ones. To help overcome the bureaucracy that countries can face when investing in climate plans, a Task Force on Access to Climate Finance was created under the lead of the UK and Fijis. These are just the first commitments: others are expected in the coming days.
To prove the direct benefits that public climate financing can bring about, a new partnership between South Africa, the UK, the US and the EU has been announced: its aim is to support South Africa, who is the global most intensive carbon based electricity producer, accelerating the transition towards greener energy through the investment of $8.5 billion in the next years.
These public investments, in the leaders’ expectations, should leverage the trillions of dollars of private investments needed to secure a carbon free future. Their point of discussions also included how to make sure developing countries had access to this kind of finance, especially in the light of the post-pandemic recovery. While the UK ensured investments to mobilise the private sector, the WBG and others announced initiatives to share the risk with developing countries: among these there’s the launch of the CCMM, a financial mechanism aimed at boosting investments in clean energy. The private sector has indeed moved forward in a greener direction. To improve the efficiency of future investments, the International Sustainability Standards Board has been created, a new international body which will establish common and transparent
sustainability thresholds. Another important new body is the Glasgow Financial Alliance for Net Zero, set to establish targets in a short period of time, while supporting emerging markets and developing countries.
This is why the private and public financial sector can offer a solution to the nation’s needs, by ensuring a greener future.