Global finance leaders call for reforms in international climate finance

By Damilola Adeleke.

A two-day meeting of prominent economists and finance leaders convened by the COP28 Presidency has reached consensus on crucial next steps to establish a new framework for international climate finance and drive progress from COP28 to COP30. The meeting brought together world-leading economists from the Independent High-Level Expert Group (IHLEG) and representatives from global institutions such as the World Bank, IMF, ECF, IFC, COP28 and COP27 Presidencies, and UN Climate Change High-Level Champions.

Participants have committed to bringing recommendations for a new international climate finance framework and a definitive roadmap for implementation to COP28. This framework will focus on addressing debt distress in vulnerable nations and the role of the private sector in enhancing finance. Despite growing private finance flows, it’s acknowledged that a much faster increase is required to meet the estimated $2.4 trillion USD annual investment needed by 2030 to tackle climate change in emerging markets and developing economies.

The roadmap aims to guide UN agencies, IMF, WB, regional MDBs, national governments, and the private sector in achieving the goals of the Paris Agreement. An agreed-upon roadmap at COP28 is intended to drive a clear plan of action on international climate finance, uniting efforts across sectors.

All attendees concur that finance is essential for enabling the transition to a net-zero, climate-resilient future. The primary focus is to rapidly boost international climate finance, especially for mitigation and adaptation initiatives in emerging markets and developing economies, in the years leading to the end of the decade.

COP-28 President-Designate Dr. Sultan Al Jaber emphasized the need for an actionable framework to unlock climate finance, encouraging collaboration among stakeholders, including MDBs and the private sector. Lord Nicholas Stern and Dr. Vera Songwe, co-chairs of IHLEG, highlighted the urgency of addressing climate challenges and called for collective action.

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), expressed commitment to climate policy support and finance for those most in need. The COP28 UAE Presidency’s priority pillars include fixing climate finance, fast-tracking the energy transition, ensuring inclusivity, and addressing lives and livelihoods. The presidency is also collaborating with the G20 High-Level expert group on international climate finance and advancing the $100 billion commitment, adaptation finance, Green Climate Fund replenishment, and funding arrangements for loss and damage.