Money pledges grabbed the spotlight again at COP28 in Dubai on Monday as delegates turned their focus to the yawning gap in the need for climate finance and what’s on offer.
The United Arab Emirates, the host of this year’s conference, pledged $270 billion in green finance by 2030 through its banks, and several development banks made fresh moves to scale up their funding efforts, including by agreeing to pause debt repayments when disaster strikes.
But leaders of the region’s biggest economy and the world’s biggest oil producer Saudi Arabia have so far not attended the U.N. summit, in sharp contrast to their participation in last year’s COP27 conference in Sharm el-Sheikh, Egypt.
On Monday, Prince Abdulaziz bin Salman, energy minister and the key climate negotiator, for the kingdom, was a no-show at the Saudi Green Initiative. De facto ruler Crown Prince Mohammad bin Salman also did not deliver a speech to world leaders as scheduled on Friday.
The amount of cash needed for the energy transition, climate adaptation and disaster relief is overwhelming.
A report released Monday estimated that emerging markets and developing countries will need $2.4 trillion a year in investment to cap emissions and adapt to the challenges posed by climate change.
“The world is not on track to realise the goals of the Paris Agreement. The reason for this failure is a lack of investment, particularly in emerging market and developing countries outside China,” said co-author Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment.
“The central challenge is to accelerate and implement the fostering and financing of this investment from a range of sources.”
Vulnerable countries that are already being hit by costly climate disasters are asking for billions more through a newly formed disaster fund, although current pledges are only around $700 million.
“Unless we have an urgent set of decision-making, we are going to suffer what every parent suffers from – exciting expectations and being unable to deliver,” said Barbados Prime Minister Mia Mottley, who has become a prominent voice in global discussions about mobilising climate finance.
In a news conference, she urged countries to go beyond voluntary pledges and pleas to charities and private investors and instead to consider taxes as a way to boost climate funding.
A global 0.1% tax on financial services, for example, could raise $420 billion, she said, while a 5% tax on global oil and gas profits in 2022 would have yielded around $200 billion.
“The planet needs global governance not in a big stick way, but in a simple way of us cooperating with each other to be able to work with the institutions that we have,” she added.
Other delegates, including U.N. Secretary-General Antonio Guterres, have called for an end to fossil fuel subsidies which have hit a record $7 trillion per year.
Activists with the Asian Peoples’ Movement on Debt and Development said they worried the sums pledged would be inadequate.
“The climate finance that they have pledged at this COP28 is simply not enough,” said Pakistani activist Zaigham Abbas, whose country was devastated last year by widespread flooding. “We are not looking for charity here. We are not looking for peanuts … The scale of the catastrophe that we are staring is unprecedented.”
The biggest pledge on Monday came from the UAE’s banking system, joining peers in other regions in pledging to lend more to green projects. It followed a Friday pledge of $30 billion for climate-related projects from the oil producing Gulf state.
Elsewhere, France and Japan said they would support a move by the African Development Bank to leverage IMF Special Drawing Rights for climate and development.
The European Bank for Reconstruction and Development, meanwhile, said it would include climate resilient debt clauses in new loan deals with some poorer countries.
Danish investment firm Copenhagen Infrastructure Partners announced plans to raise $3 billion for renewable projects in emerging markets.
This year also features the biggest-ever representation of business at the annual U.N. summit, amid hopes for more private investment toward climate causes.
The emirate of Abu Dhabi teamed up with private sector partners including BlackRock and HSBC to launch a climate research and advisory hub to boost financing options in the region.
“The scale of the climate crisis demands urgent and game-changing solutions from every industry,” COP28 President Ahmed Al-Jaber said. “Finance plays a critical role in turning our ambitions into actions.”