01/11/24

GREEN FINANCE: Global climate finance reached $1.5 trn in 2022, must rise fivefold

As published on: business-standard.com, Friday 1 November, 2024.

Global investment in combating and adapting to climate change reached nearly $1.5 trillion, doubling between 2018 and 2022, but it must increase at least fivefold by 2030 to limit warming to 1.5 degrees Celsius, according to a new study.

The "Global Landscape of Climate Finance 2024: Insights for COP29" report, published by global think tank Climate Policy Initiative (CPI), said climate finance currently represents only 1 per cent of global GDP, far short of the required level.

Emerging markets and developing economies (EMDEs) may need around 6.5 per cent of their GDP by 2030 to meet climate goals.

"While global climate finance has made some strides, a much more ambitious, cohesive, and effective approach is essential to address the vast funding gap," said Barbara Buchner, CPI''s Global Managing Director.

"The data from CPI's Global Landscape report leaves no doubt that investment needs to scale across all fronts -- domestically, internationally, and across sectors -- to reach our mutual climate goals. COP29 is an opportunity to establish clear, collaborative commitments to finance the transformation needed for a sustainable future." Annual climate finance flows rose from $ 674 billion in 2018 to $ 1.459 trillion in 2022. However, a fivefold increase is still needed to reach the $ 7.4 trillion required annually through 2030 to limit warming to 1.5 degrees Celsius, the report said.

Alarmingly, fossil fuel investments continued to rise globally throughout 2023 and 2024, surpassing $ 1 trillion despite global commitments to reduce fossil fuel investments. Subsidies for fossil fuel consumption in emerging economies increased fivefold during the same period, it noted.

At the UN climate conference in the UAE in 2023, countries reached a historic agreement to transition away from fossil fuels.

Tags

Green finance Climate finance Climate funding