Investments in renewable energy and sustainable infrastructure are increasing, but from January 2020 to March 2021, globally, more money has been spent on fossil fuels, which when burned generate harmful gases that lead to climate change.
Many countries lack the financial resources to transition to clean energy and a sustainable lifestyle that can reverse climate change. The UN says that says climate finance is the answer because not investing will cost more in the long run, but also because there are great opportunities for investors.
What is climate finance?
Broadly speaking, climate finance is about money that must be spent on the full range of activities that will contribute to slowing climate change and that will help the world reach the goal of limiting global warming to an increase of 1.5°C above. pre-industrial levels.
To achieve this goal, the world needs to reduce greenhouse gas emissions to practically zero by 2050; The term net-zero is also heard a lot in the context of climate action finance (You can read more about it Here).
Initiatives that must be funded to reach net zero include those that reduce emissions of harmful gases as well as promote or protect natural solutions that capture those gases, such as forests and oceans.
The funding also aims to build the resilience of the population most affected by climate change and help them adapt to changing weather conditions, measures that will in turn help reduce warming.
Funding is in place and so are the solutions for the transition to what the UN calls a green economy. Renewable energy that provides electricity without producing carbon dioxide or other forms of air pollution is an essential building block for promoting sustainable economic growth.
Why is it important?
With rising global temperatures, along with changing weather patterns, rising sea levels, and increasing droughts and floods, the world’s most vulnerable populations face ever-increasing risks, food insecurity, and have fewer opportunities to break out of poverty and build a better life.
In fact, the United Nations estimates that climate change could push an additional 100 million people into poverty by 2030.
Significant financial resources, sound investments and a systematic global approach are needed to address these troubling trends.
So how much is required?
Significant investments are needed and international cooperation is critical. More than a decade ago, developed countries committed to jointly mobilizing $100 billion annually by 2020 to support climate action in developing countries.
It might sound like a lot but compare that to Global Military Spending in 2020 It has been estimated that less than the $2 trillion or $2000 billion or trillions of dollars that developed countries have spent on coronavirus-related relief for their citizens.
according to expert report Set up at the request of the UN Secretary-General, the $100 billion target has not been met (the latest data available for 2018 is $79 billion), although climate finance is on an “upward trajectory”.
Therefore, there is still a huge funding gap.
Does it have a financial meaning?
The real question is whether the world can afford not to invest in climate action.
Societies around the world are already suffering from the financial impacts of climate change, whether it’s crop loss due to drought or massive damage to infrastructure by floods or other extreme weather.
The UN Special Envoy for Climate Action and Finance, Mark Carney, says the massive amount of investment required represents An opportunity, not a risk, arguing that the benefits that flow from these investments greatly outweigh any initial costs.