The summit allowed for the convergence of goals in the areas of climate, biodiversity, development and ecological transition, and finally recognized the interactions between all these concerns. From our point of view, the most important part of the summit was the question of how to scale up financing for climate change and sustainability management in emerging countries.
The answer to this question is more urgent than ever. The target set at COP 15 in 2009 for climate change financing in developing countries to reach US$100 billion by 2020 has just been met, three years behind schedule. (1). However, not only the speed at which these goals are being achieved is a significant issue, but also the amount of capital as investments are made in energy infrastructure in emerging markets must reach at least $1,000 billion by 2030 alone (2). This illustrates the daunting task ahead of us.
It is therefore not surprising that the official announcement by Senegal and the International Partners Group last week to raise 2.5 billion euros for the expansion of renewable energies raises some hope. This could be the first of many such public-private partnerships, such as the Sustainable Energy Transition Partnerships announced in recent years by Indonesia, India, Vietnam and South Africa (3).
All eyes are now on the next round of discussions on reforming the international financial system, which will take place at the September IMF-World Bank meetings in Washington. Freeing the balance sheets of multinational development banks is now high on the political agenda. In fact, leveraging first loss provisions and de-risking these investments could prove to be the most effective way to attract private sector capital to meet climate and development goals.
(1) UNCTAD (June 2023) https://unctad.org/news/climate-finance-goal-works-developing-countries
(2) IEA (June 2021). Financing the clean energy transition in emerging and developing countries.
(3) International Institute for Sustainable Development (November 2022). take a leap