The Golden Opportunity

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Humanity cannot pass up the "golden opportunity" of a green, inclusive, and resilient recovery.
A minister of a small island nation warned that, because of rising sea levels and without action on climate change, “I will have nowhere to call home.”
The latest assessment from the Intergovernmental Panel on Climate Change signaled that the planet is heating up even faster than previously thought.
If progress is not made before COP26, prospects of securing an outcome that delivers for both people and the planet will be "drastically diminished."

Developed economies’ mobilization of the $100 billion they have promised developing economies is "paramount."
The author supports the IMF’s $650 billion allocation of special drawing rights (SDRs) to help generate liquidity and give countries breathing space to invest in tackling climate change.
The author urges voluntary SDR channeling, calling on larger economies to channel a significant proportion of their new SDRs to support green, inclusive, and resilient recovery in developing and climate-vulnerable economies.
All SDR channeling options "should be consistent with a sustainable and resilient recovery and avoid entrenching carbon-intensive growth."
Progress at the World Bank and IMF Annual Meetings in October would provide a welcome boost ahead of COP26.

Under Kristalina Georgieva’s international leadership, the IMF has:
- integrated climate risks into global economic surveillance;
- raised awareness of links between climate change and the macroeconomy;
- emphasized investment in green and climate-resilient recoveries, and the need for financial support and debt service relief to low-income countries in crisis.
Several MDBs, including the World Bank and the European Bank for Reconstruction and Development, have published plans and a date to align activities with the Paris Agreement; others are urged to follow quickly.
The latest Joint Report on Multilateral Development Banks’ Climate Finance shows a total dip in these banks’ climate finance to low- and middle-income countries in 2020 as the banks responded to the pandemic; this assistance "must bounce back."
The author calls on each major MDB to launch an action plan on private climate finance mobilization in time for COP26.

The International Climate Finance commitment from the United Kingdom mobilized £2.2 billion in private funds for climate action in developing economies between 2011 and 2020.
The UK partnership with Macquarie in South Africa delivered:
- more than 254 megawatts of clean energy;
- helping avoid approximately 844,000 tons of greenhouse gas emissions a year;
- equivalent to taking 182,000 cars off the road;
- while creating about 400 green jobs.
The author emphasizes that investment in climate action will pay dividends in economic and environmental terms by safeguarding against further damage and building a greener, more prosperous and resilient future.

Under the current trajectory, climate change could erase 11–14 percent of global GDP by 2050.
A recent report found that the 215 biggest companies in the world have valued their climate risks at about $1 trillion.
Those same companies "have the potential to gain double that amount from a move to green economies."
According to Carbon Tracker, "by 2030 it could be cheaper to build renewables than run existing coal plants in all major markets," creating opportunities to link many communities to power for the first time.

At the July ministerial meeting, Germany and Canada agreed to take forward work on setting out a delivery plan on the $100 billion a year by 2025.
The G7 Summit in Cornwall saw G7 countries agree to increase and improve climate finance contributions through to 2025, including more funding for adaptation and nature-based solutions.
Canada, Japan, and Germany immediately committed more money toward the $100 billion goal—together amounting to billions of dollars a year.
The UK has doubled its international climate finance contribution, to £11.6 billion between 2021 and 2025.
The World Bank has increased its climate finance target to 35 percent of total lending.
The Glasgow Financial Alliance for Net Zero has seen more than 250 financial institutions responsible for $88 trillion in assets commit to net zero emissions by 2050 at the latest.

Ensure developed countries fulfill and reinforce the $100 billion commitment to developing economies.
Use the IMF’s $650 billion SDR allocation and pursue ambitious voluntary SDR channeling to free up resources for climate-vulnerable countries.
Encourage larger economies to lay out commitments to channel SDRs, building on the collective aim put forward by the G7.
All options under development must be consistent with a sustainable and resilient recovery and avoid entrenching carbon-intensive growth.
All MDBs should publish alignment plans with the Paris Agreement and launch action plans on private climate finance mobilization by COP26.
Governments, MDBs, and private finance must collaborate to:
- scale up blended finance initiatives and technical assistance;
- improve conditions for investment within countries;
- build pipelines of high-quality, bankable green projects.
By COP26, establish a clear pathway to mobilize the trillions needed to support frontline countries and keep the 1.5C goal in sight.

F&D Magazine — The Golden Opportunity; Alok Sharma; September 2021