Protecting vulnerable nations from the deepening impact of climate change and overcoming the challenges faced in mobilising enough financing to help boost their mitigation and adaptation has led most discussions at the World Bank and International Monetary Fund’s meetings this week in Morocco.
The week-long gathering of thought leaders, policymakers, government officials, corporate bosses, civil society representatives and finance leaders discussed everything from rising debt distress to dimming prospects of medium-term growth and escalating geopolitical risks amid an already shaky economy.
The constant push by the IMF and the World Bank's top executives and policymakers on the need to find solutions for financing for low and middle-income countries, as well as the emphasis on building a cleaner and greener financially stable global economy, was a prelude to their preparations for Cop28.
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Now, policymakers, regulators and finance leaders are gearing up to meet private sector and government representatives in Dubai between November 30 and December 12 to find solutions for the problems highlighted at the Marrakesh annual meeting.
Clear emphasis is on putting the money on the table to help boost climate mitigation and adaptation efforts to ensure the world does not fall behind its 2050 climate targets.
“Look, it's very important, the Cop28, because in the current fragmented world, if you want to promote initiatives that build the global public good around climate, you need to have big players coming together,” Jihad Azour, director of the IMF’s Middle East and Central Asia Department, told The National on the sidelines of the meetings.
“For us, it's very important because the Mena region has been subjected to [many] climate events over the last two decades. With the increase in temperature that [we have] now, we have demonstrated that it has affected the growth level.”
The UAE, the Arab world’s second-largest economy, is hosting the UN Cop28 climate summit in Dubai, which will bring together heads of states, a who's who of the finance and corporate world, as well as members of civil society.
Tough negotiations are expected to take place in Dubai to put the world back on the path of carbon neutrality by midcentury and new pledges will be needed to bridge the gap in funding required to shield some of most vulnerable countries from the impact of climate change.
“We need to help countries, who are not among the large emitters, in adaptation and this requires investment for countries who have a very, very narrow fiscal space,” Mr Azour said.
Fragility is driving the IMF’s urgency in bringing the worsening climate plight of the some of the poorest nations in the world to the fore, he added.
“This region [also] has a number of countries in a fragile state because of conflict, because of many other issues and we want to raise awareness to support those countries,” he said.
Situmbeko Musokotwanem, Zambia's Minister of Finance and National Planning, said he hopes that Cop28 will deliver a set of policies for Africa to boost investment and financial stability in the region, giving African nations the ability to to deal with climate challenges.
“I think for us, we see this as an opportunity. Of course, it is a challenge but what’s more positive is that we see opportunities … let’s focus on those opportunities rather than putting our arms up in the air,” he told a media briefing.
The IMF also sees climate as a sector that has the potential for growth, investment and job creation, while there is interest in the Middle East North Africa region to increase its research footprint and play a leading global role, Mr Azour said.
“This is why, for us, it [Cop28] is very important,” he said. “It's part of the global growth agenda. Climate is something that you need.”
The IMF is in already collaborating with the UAE on the Cop28 agenda.
In April, the Washington-based fund’s managing director Kristalina Georgieva, Cop28 President-designate Dr Sultan Al Jaber and Mark Carney, UN special envoy for climate action and finance and co-chairman of the Glasgow Financial Alliance for Net Zero, called on governments, international financial institutions, development banks, philanthropic organisations and private financial institutions to collectively help to scale up climate finance and provide access to the trillions of dollars that are needed to achieve climate goals.
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Accelerating the partnership between public and private finance can help the world meet climate goals, they said at the time.
Ahead of the annual meetings, the IMF said emerging markets and developing economies will require a huge amount of financing to mitigate climate changes, 80 per cent of which will have to come from the private sector.
Emerging and developing nations, which currently emit around two thirds of greenhouse gases globally, will need about $2 trillion annually by 2030 to reach their climate targets, the fund said, citing the International Energy Agency's estimates.
The projected investment is a fivefold increase from the current $400 billion of climate investments planned over the next seven years, and the majority of the required funding needs to flow into the energy industry, the Washington-based fund said in its Global Financial Stability Report.
Like the IMF, other multilateral lenders also have plans to contribute to advancing the global climate agenda at Cop28.
The World Bank is devising a new strategy, progress on which will be revealed at the UN climate summit next month, the lender's president, Ajay Banga, said in his first major policy address since taking the helm at the bank earlier this year.
“We are developing a new approach to track climate outcomes based on impact. We plan to share more about our progress at Cop28 in Dubai,” Mr Banga said.
“This unified approach could greatly benefit the governments we serve, making it easier for them to access resources from a diverse set of multilateral development banks, focusing lending through a single country platform.”
He said the World Bank, as well the other multilateral development banks, “don’t have a monopoly on good ideas”.
“We should steal shamelessly – and share seamlessly. And we must do it with, and among, think tanks, the private sector, civil society and anyone who is moving the needle. There is much we can do together,” Mr Banga added.
Institutions such as the European Bank for Reconstruction and Development, Asian Development Bank, Islamic Development Bank, European Investment Bank and Asian Infrastructure and Investment Bank are also squeezing their own balance sheets to bring additional financing to the table.
“We will continue our collaboration in the implementation of our joint approach to align our financing flows with the goals of the Paris Agreement on Climate Change,” the heads of the multilateral banks said in a joint statement.
“As we set ourselves for a successful Cop28, we will pursue the launch of several activities and initiatives, including a joint MDB facility to support clients’ long-term strategies [on climate].
“We are working to enhance our approaches to tracking and reporting climate outcomes, while continuing to jointly report our climate finance commitments.”
Mr Azour said the UAE as host and Dr Al Jaber and his team have been reaching out to the emerging world throughout the year and were “very active to have the most inclusive Cop; a Cop that also provides a voice to the south, as well as to new types of issues [facing us].
“I look forward to it, as this Cop will be a turning point, especially [in terms of] addressing some of the issues [such as] fragmentation, cost of financing – higher for longer [interest] is not great – and how international institutions should calibrate their interventions to help.”