COP27: Developing countries need $2 trillion annually to tackle climate change, says report

  • November 10, 2022
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
No Comments

 

 

COP27: Developing countries need $2 trillion annually to tackle climate change, says report

Subject: Environment

Context-

  • Developing and emerging economies, except China, will need $2 trillion per year by 2030 for energy transition, adaptation resilience, loss and damage and sustainable agriculture, according to a new report.

About the Report-

  • Title
    • Finance for climate action: Scaling up investment for climate and development
  • Released at COP27.
  • The report was prepared by a new independent high-level expert group on climate finance.
  • The group was launched in July 2021 by the presidencies of COP26 and COP27 and the UN Climate Change High-Level Champions.
  • Aim
  • The report analysed the financial structures required to deliver the Paris Agreement’s goal of limiting global warming.
    • The report covered three broad areas — energy transition, adaptation resilience and sustainable agriculture — that restore damage inflicted by human activity to natural capital and biodiversity.
  • Natural capital covers the world’s stocks of natural assets such as geology, soil, air and water.

Report analysis-

  • One trillion of the required finance should originate from domestic sources.
  • The remaining one trillion should come from external sources — developed countries or multilateral development banks.
  • Developed countries pledged to provide $100 billion in climate finance to developing countries by 2020. But they are yet to meet the commitment.
  • Emerging markets and developing economies, except China, require a total annual investment of $1trillion by 2025 and $2.4 trillion by 2030.
  • China was exempted because it does not need external climate finance.
  • The report also called for revamping the role of Multilateral development banks (MDBs)
  • The flow of finance from these institutions should triple from about $60 billion annually to around $180 billion annually within the next five years.
  • Low-cost finance through innovative ways — including special drawing rights (SDR), voluntary carbon markets, philanthropy and guarantees.
    • SDR is an international reserve created to supplement the official reserves of the International Monetary Fund member countries.
COP27: Developing countries need $2 trillion annually to tackle climate change Environment