|Introduction: Contextual introduction.|
Body: Explain how the private sector can find solutions to climate change by funding the trillions needed for a global transition to clean energy. Also write some concerns.
Conclusion: Write a way forward.
Recently the UNFCCC Standing Committee on Finance (SCF) released a report on the progress made by developed countries towards achieving the goal of mobilizing $100 billion per year. Climate finance is money used by countries to drive down greenhouse gas emissions and adapt to the effects of climate change.
Private sector can find solutions to climate change:
- No government in the world has enough money to solve the climate crisis or complete the energy transition, and that private investment in clean energy technology is therefore critical to combating climate change.
- Private sector breakthroughs in areas such as battery storage, green hydrogen and direct air carbon capture could be “game changers” for reaching net-zero emissions.
- Private sector is increasingly disclosing climate-related risks and opportunities, as well as reassessing investments that previously didn’t consider climate risk.
- Transitioning to greater use of solar, hydropower, wind, geothermal, and biomass power in the developing world will require vast investment.
- Lack of transparency of information on mobilized private finance.
- The private sector is especially weak in the poorest countries, when compared to many middle-income countries. This limits the opportunities to mobilise finance from local companies.
- The concern is that, unless efforts are made to steer private finance in an equitable manner, it would mostly benefit a handful of developing countries, but bypass the poorest ones, where the needs are greatest.
- Based on the experience of multilateral development banks (MDBs) in development and the private sector, concerns have also been raised that the private sector would mostly benefit multinational companies from major economies, instead of developing countries’ local companies.
- Private sector investments in developing countries have concentrated on energy and transport, whereas little attention has been paid to water infrastructure.
- Develop a common methodology to record and track private finance to ensure an equitable distribution of the scarce climate finance available.
- Mobilization of private finance as a means of achieving the $100 billion goal, should not come at the expense of, or involve a trade-off in addressing the needs of developing countries.