SPOTLIGHT
BEYOND PLEDGES INCLUSIVE PARTNERSHIPS TO MOVE TOWARDS CLIMATE RESILIENCE
The 2050 net zero target date may seem far away. Yet it only represents one investment cycle for many capital-intensive industries. Crunch time is coming says Rania Al-Mashat, Minister of International Cooperation, Arab Republic of Egypt
A s the president of COP27 this year Egypt announced that its main objective is to move from pledges to implementation. It is within this context that the Sharm El-Sheikh Guidebook for Just Financing aims to outline the key role of each stakeholder in translating financial commitments into implementable projects and address the critical challenges of leveraging and catalyzing needed finances and investments to support the climate agenda. As depicted by the Climate Policy Initiative, the tracked global climate finance averaged US$632 billion in 2019/2020, which is significantly lower than the needed annual financing estimated at US$4.13 trillion. With a share of less than 5.5 percent Africa is among the lowest recipients, while being considered most vulnerable to climate change. Therefore, the guidebook will target developing and emerging economies, with a special focus on Africa to unlock investment opportunities in green projects. Pledged global commitments, particularly from the private sector, may not make their way to the countries that need them the most. Innovative
solutions, such as de-risking instruments and blended finance, are therefore more important than ever. A deeper analysis of these instruments is crucial to attracting investment for green, sustainable, inclusive and resilient development – particularly within developing countries and emerging economies. Moreover, concessional financing resources from multilateral development banks (MDBs), in addition to pledges by philanthropic groups, may help the origination of these finances to help achieve the climate ambitions over the longer term. A multi-stakeholder approach to climate finance The proposed initiative instigates a consultative multi-stakeholder process that includes governments, multilateral and bilateral partners, the private sector, civil society, philanthropic organizations, research centers, and think tanks to coordinate collective action to foster a green and resilient transition. It aims to outline a roadmap whereby developing countries and emerging economies can translate international pledges into investable projects.
As an outcome of these consultations, stakeholders will draft a guidebook that incorporates a practical guide for innovative climate financing, leveraging their comparative advantage and strengthening effective inter- coordination mechanisms. The guidebook will focus on identifying priority sectors that have a direct impact on accelerating climate adaptation and mitigation, with a special emphasis on energy, water, and agriculture sectors; develop clear guidelines to enhance the bankability of adaptation and mitigation projects; clarify strategies to mobilize resources towards climate adaptation projects in developing and emerging countries; and create conducive markets for green projects, aligned with national and international policy frameworks. According to the World Economic Forum, developing countries need to invest an additional US$800 billion per year on climate mitigation projects by 2025, dwarfing the US$100 billion pledge. In view of the growing climate finance needs to respond to the climate agenda and the sustainable development goals, the international community needs
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