The UAE has announced a new initiative aimed at developing technology solutions such as artificial intelligence and blockchain to scale the use of green finance and combat climate change.
The UAE Central Bank, the Bank for International Settlements, the Emirates Institute of Finance and the Cop28 Presidency have launched the Cop28 UAE TechSprint, ahead of the UN climate summit in the Emirates at the end of the year.
The programme seeks to encourage global innovators from the public and private sectors to use technologies such as AI, blockchain, Internet of Things and sensors to tackle challenges in green and sustainable finance, the country's banking regulator said in a statement on Monday.
“Tackling climate change requires available, accessible and affordable finance,” said Dr Sultan Al Jaber, Cop28 President-designate.
“By introducing advanced technological solutions that support the development of sustainable finance standards and instruments, we can help to foster investor confidence and better ensure that capital reaches those who require it the most.”
The importance of climate financing is taking centre stage ahead of Cop28, which is being held at Dubai Expo City from November 30 until December 12.
Private finance flows need to grow faster to meet the $2.4 trillion in total investment estimated to be required annually by 2030 to address climate change in emerging markets and developing economies, officials said at the meeting of the Independent High-Level Expert Group on Climate Finance last month.
A cumulative sum of $150 trillion of investments in renewable energy solutions is required to keep global warming to below 1.5°C above pre-industrial levels by 2050, according to the International Renewable Energy Agency's World Energy Transitions Outlook.
Although global investment across all energy transition technologies reached a record high of $1.3 trillion in 2022, annual investment must more than quadruple to remain on the 1.5°C pathway, said the intergovernmental organisation.
As part of the new TechSprint initiative, developers can either offer AI solutions for sustainable finance reporting, verification and disclosure in the financial services industry; blockchain solutions for auditing and enhancing transparency, traceability and accountability in sustainable finance; or IoT and sensor technology solutions for sustainable finance to ensure informed assessments of impact or risk.
“In line with the vision of the UAE’s leadership, and its endeavours to address the challenges of climate change, we value the partnership with Cop28 UAE and the BIS in launching this international initiative,” said Khaled Balama, Governor of the UAE Central Bank.
Shortlisted participants for each problem statement will be invited to further develop their solutions and will be eligible for a stipend of Dh 45,000 ($12,253). A winner for each of the three areas will be selected by an independent panel of experts, the Central Bank said.
The winners will be announced at Cop28, with each winner eligible for an award of Dh220,000.
“Combating climate change is more urgent than ever. It calls for a profound change in the way economies operate and grow,” said Agustin Carstens, general manager of the BIS.
“To finance the needed transformation, investors need certainty that their funds are channelled to their intended uses,” he said.
“Technologies that promote the timely measurement and disclosure of climate-related information are part of the solution.”