Mobilising private-sector money a must for climate resilience
AS THE world seeks to get ahead in the race against a changing climate, private-sector investment in the response effort – from adaption to mitigation – is key.
This is according to Alok Sharma of Britain, president of the upcoming Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26), to be held in Glasgow in November.
The talks bring together countries the world over to negotiate the global climate change response – from technology transfer to issues of loss and damage, nationally determined contributions to greenhouse gas emissions that fuel global warming, and the mobilisation of finance.
“We need to ensure that we are getting more private-sector money into tackling climate change in terms of having climate-resilient infrastructure,” Sharma said on a recent visit to Jamaica.
“I have gone around the world and one of the points I have been very focused on, is how do we get very clean transition from fossil fuels to renewables to onshore and offshore wind. And again, a part of the work we are doing through COP is ensuring that we are supporting countries to see how private-sector investment can also flow into their countries to help with the transition,” he added.
His position has found favour among local stakeholders.
“The importance of mobilising private-sector funding is increasingly important, as public-private partnerships are critical to garnering the financing necessary for climate action,” noted Eleanor Jones, a member of the Private Sector Organisation of Jamaica and head of its Energy, Environment and Climate Change Committee.
“The importance of linking climate investment with positive bottom line requires new approaches to including climate in business risk identification and management,” added Jones, who is also head of the consultancy firm, Environmental Solutions Limited.
Climate change threatens not only warmer global temperatures, but also increased sea levels and sea surface temperatures, together with the associated impairment of marine livelihoods, such as fishing, as well as more extreme hurricanes and droughts, in addition to compromised water and food security.
Given these realities – to which small island developing states of the Caribbean are especially vulnerable – stakeholders such as Indi Mclymont-Lafayette, who has been involved in the climate change negotiations as an NGO representative and as a member of the Jamaica delegation, said stimulating private-sector support is vital.
“The US$100 billion that was set for 2020 has already fallen through and that sends a worrying message,” she said, referencing the decade-old promise of US$100 billion a year in climate finance up to 2020 that was made by developed countries to support efforts in developing countries.
“It is critical that we have private sector partnering with the Government and other stakeholders. Otherwise, we won’t meet the climate financial targets for adaptation and mitigation. With private sector contributing, the targets become more achievable and lives are saved,”added Mclymont-Lafayette, who currently heads Change Communications Limited.
The role of the private sector in the climate change response has long been championed, given the requirement for large investments to bring about the needed reduction in greenhouse gas emissions to thwart the global rise in temperatures that are projected to have dire consequences.
Private-sector input is also required for adaptation, which is critical for societies such as Jamaica and others in the Caribbean that will need to ready themselves for the various adverse impacts – the likes of which have been seen with the passage of various Category 3 through 5 hurricanes that have left billions in damage and cost many lives over recent years.
It is against this background that United Nations Environment, for example, has been involved with what is dubbed ‘The Finance Initiative’. That venture supports private-sector financial institutions, such as banks, investors and insurers, “to understand and mitigate climate risks, seize the commercial opportunities from climate action and ultimately take all necessary measures to fully align portfolios with mitigation and adaptation objectives of the Paris Agreement”.
In a July 2019 report titled ‘Driving Finance Today for the Climate Resilient Society of Tomorrow’, the initiative and its partners looked at barriers and opportunities for financing resilience.
It recommended, among other things, “blended finance approaches that leverage public finance to crowd in private investment,” noting that “it may be critically important to accelerate adaptation and resilience investment, particularly for investments in emerging markets, and new technologies or business models that deliver adaptation and resilience solutions”.