A gathering of leading global economists and financial leaders convened by the COP28 Administration has reached an agreement on the next steps to establish a new framework for international climate finance. This meeting, building on the momentum generated by the Bridgetown Drive and Paris Summit for a New Global Economic Agreement, marks a significant stride toward reshaping global climate finance. It will guide progress not only at COP28 but also beyond, at COP29 and COP30.
The gathering emphasized the urgent need for private financial flows to grow substantially in order to secure the estimated $2.4 trillion USD in annual investment required by 2030 to address climate change in emerging markets and developing economies. Economists and participants will now produce a comprehensive report, including a clear roadmap for implementing the recommendations, to be presented to world leaders at COP28.
World-renowned economists from the Independent High-Level Expert Group (IHLEG) met with representatives from prominent global institutions, including the World Bank, IMF, ECF, IFC, COP28, COP27 Administrations, and UN Climate Change High-Level Champions for two days of discussions in Abu Dhabi from August 15-16.
The consensus among those gathered was that they would present, at COP28, not only recommendations for a new framework for global climate finance but also a concrete plan for executing these recommendations. Specific areas of focus for the new framework will include addressing debt burdens in vulnerable countries and the role of the private sector in delivering increased finance. The group acknowledged that although private financial flows are increasing, they need to grow much faster to meet the $2.4 trillion USD total investment estimated to be required annually by 2030 for climate change in emerging markets and developing economies.
This roadmap is intended to guide all institutions, including UN agencies, the IMF, World Bank, regional MDBs, national governments, and the private sector, in short and long-term plans to achieve the goals of the Paris Agreement. Agreement on this roadmap at COP28 will enable leaders from the public, private, and third sectors to drive a viable global climate finance strategy.
All participants in the meetings were unanimous in their understanding that finance is crucial for enabling the delivery of solutions to facilitate the transition to a net-zero, climate-resilient future. They also agreed that their primary focus is to rapidly increase global climate finance between now and the end of the decade to support mitigation and adaptation efforts in emerging markets and developing economies.
COP-28 President-Designate Dr. King Al Jaber opened the meetings with a clear call to deliver “a detailed, action-oriented framework and substantive recommendations.”
Following the meetings, he commented: “Climate finance has long divided the global community and hindered progress in addressing climate change and supporting the countries most affected by it. However, climate finance is at the heart of the COP28 agenda because finance is how we turn goals into reality.”
He stressed the need for a comprehensive framework that covers both adaptation and mitigation, as well as the acceleration of private capital flows. He emphasized the importance of making all forms of finance more accessible, transparent, and affordable, adequately capitalizing MDBs, providing more concessional finance, and exploring innovative approaches to manage financial risk. He expressed confidence that the experts involved in this work will find solutions to unlock climate finance.
Lord Nicholas Stern, co-chair of the IHLEG, stated: “These meetings have proven highly productive, largely due to Dr. King’s leadership and his team’s support. We are all acutely aware of the gravity of the challenges we must address and the global action required to deal with them. All stakeholders, including MDBs, their shareholders, and the private sector, must move forward. We will continue to work with the COP28 Administration in the weeks ahead.”
Dr. Vera Songwe, co-chair of the IHLEG, emphasized the urgency of taking swift, collective, and large-scale action to turn climate disruptions into valuable learning experiences for people and the planet. She and all stakeholders agreed that raising $2.4 trillion annually will not be enough without an acceleration in implementation. She looks forward to COP28 delivering significant progress.
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), expressed the IMF’s commitment to ensuring climate policy support and finance reach those most in need. She thanked the leadership of COP28 for convening this crucial meeting and expressed eagerness to collaborate with all stakeholders in the lead-up to COP28 to strengthen partnerships between the public and private sectors for climate success.
The Abu Dhabi meetings of the IHLEG were attended by a diverse group of senior leaders and actors in global climate finance. The IHLEG is responsible for developing and presenting policy options and recommendations to enable public and private investment essential for achieving the aspirations of the Paris Climate Agreement. Its ultimate goal is to advance an inclusive financial framework for resource mobilization to establish an equitable and efficient climate finance system, as outlined in the Paris Agreement and Glasgow Agreement, and initiate its implementation.
The COP28 UAE Administration has identified “strengthening climate finance” as one of its four priority action areas for COP28, alongside accelerating the energy transition, ensuring full inclusivity, and addressing livelihoods.
Facilitating the energy transition in Emerging Markets and Developing Economies, as well as supporting countries most affected by climate change, is central to the COP28 Administration’s vision.
In addition to its work with IHLEG, the COP28 Administration is collaborating with the G20 High-Level expert group on global climate finance and with Germany and Canada to advance the fulfillment of the $100 billion commitment. The COP28 administration is also seeking substantial progress on the doubling of adaptation finance by 2025, delivering areas of strength for the Green Climate Fund, and reaching an agreement on funding arrangements for loss and damage at COP28.
COP28 UAE will take place at Expo 2020 Dubai from November 30 to December 12, 2023. The conference is expected to gather over 70,000 participants, including heads of state, government officials, global industry leaders, private sector representatives, academics, experts, youth, and non-state actors.
As mandated by the Paris Climate Agreement, COP28 UAE will deliver the very first Global Stocktake – a comprehensive assessment of progress toward climate goals.
The UAE will lead a process for all parties to agree on a clear roadmap for accelerating progress through a practical global energy transition and a “leave no one behind” approach to inclusive climate action.
The Independent High-Level Expert Group on Climate Finance (IHLEG) develops and promotes policy options and recommendations to facilitate public and private investment and finance essential for meeting the commitments, ambitions, initiatives, and targets of the UNFCCC Paris Climate Agreement. It is led by Dr. Vera Songwe and Professor Lord Nicholas Stern, with Dr. Amar Bhattacharya serving as the executive secretary.
Abu Dhabi Global Market (ADGM) is the international financial center (IFC) of the capital city of the United Arab Emirates. ADGM is ranked as one of the top IFCs in the Middle East and Africa region and is designated as MENA’s largest Fintech hub. ADGM enhances Abu Dhabi’s position as a leading financial center and a business hub that serves as a vital link between the emerging economies of the Middle East, Africa, South Asia, and the rest of the world
