IMF chief and Cop28 President-designate discuss measures to accelerate climate action

Considerable global investment is needed to reduce emissions while public-private partnership needs to be harnessed to boost financing

IMF Managing Director Kristalina Georgieva, Cop28 President-designate Dr Sultan Al Jaber and UN special envoy for climate action and finance Mark Carney lead the round-table discussion. Photo: Cop28 UAE
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International Monetary Fund 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, co-chaired a round-table discussion on Tuesday at the IMF to discuss climate action and finance.

Other participants included representatives of governments, international financial institutions, development banks, philanthropic organisations and private financial institutions committed to net zero.

In a joint statement, Ms Georgieva, Dr Al Jaber and Mr Carney said working collectively can help to scale up climate finance and provide access to trillions of dollars that are needed to achieve climate goals.

Accelerating the partnership between public and private finance can help the world meet climate goals, they said.

“Capital and finance are among the most important enablers of climate action and sustainable economic development, but not enough is getting to the people and places that need it most. For vulnerable communities, across the global south, climate finance is nowhere near available, affordable or accessible enough,” said Dr Al Jaber, who is also UAE Minister of Industry and Advanced Technology.

Only 20 per cent of clean technology investment is going to developing countries that make up more than 70 per cent of the global population, with the least developed countries receiving less than two cents on every dollar spent, he said.

“Behind every number there are individual lives, people and communities who should have the right to fulfil their potential and contribute to sustainable global prosperity,” Dr Al Jaber said.

“The world needs to triple the amount of money by 2030 that is available for clean tech investment, adaptation finance and a just energy transition in emerging and developing countries.”

Dr Al Jaber said the world needs to urgently consider fundamental reform to achieve both climate and development goals.

“We need substantially more concessional finance that can lower risk in lower-income countries and attract private capital at a multiple. And we need to explore new instruments to drive private sector finance more effectively and more efficiently to emerging and developing states,” he said.

“As the UAE prepares to host Cop28 later this year, I am keen to apply a business mindset and action-orientated approach to enable the transformational progress the world needs. And I am hopeful that we can find pathways to reignite the relationship between public and private finance to meet development and climate goals at the same time.”

Participants in the round-table discussions identified areas of work within their respective mandates to be accelerated on the road to Cop28, as climate change is one of the most critical macroeconomic and financial policy challenges that countries face in coming decades, with capital being an enabler of climate action.

More concessional finance can boost the scaling up of clean energy and the managed phase-out of fossil fuels on an accelerated time frame, helping to lower risk and drive private sector finance more efficiently to emerging and developing countries.

Measures discussed in the round-table include making the investment environment more conducive to climate finance, identifying specific obstacles that impede private sector climate finance and proposing reforms to help to strengthen countries’ macroeconomic and balance of payments stability by reducing risks associated with climate change.

Other areas include using innovative financing instruments to scale up private investment in emerging and developing economies.

“The impacts of global warming are already destroying lives and livelihoods, so we need a step change in our financing approach to redirect trillions of dollars towards meeting the climate challenge. To get there, stronger co-operation and partnerships across the public and private sector are vital — there is no time to waste,” said Ms Georgieva.

Mr Carney said: “To ensure that the impact of the net-zero revolution under way in private finance benefits all countries, we need a more efficient and effective multilateral financial architecture”.

“I salute the leadership of Kristalina Georgieva, Managing Director of the IMF, and Dr Sultan Al Jaber, President-designate of Cop28, on this imperative, and look forward to partnering with them and other stakeholders to deliver progress this year.”

Round-table participants agreed to continue to collaborate between now and Cop28 in Dubai and beyond to define and put in place specific measures towards shared goals.

Updated: April 12, 2023, 5:13 AM