Why climate action will spur inclusive economic growth

Developed economies can provide funding for electricity grid upgrade requirements that will allow developing countries to absorb scaled up renewable energy generation, paving the way for more private sector renewable energy investments.

CLIMATE ACTION is now more important than ever.

Building climate resilience and reducing emissions will veer the world away from the worstcase climate scenario projected by scientists and enable vulnerable countries like the Philippines to fight climate change.

While the Paris Agreement recognizes the need of climate-vulnerable countries for financing to undertake ambitious mitigation programs from their respective Nationally Determined Contributions (NDCs), adaptation projects and programs also need to quickly scale up.

Through innovative financial instruments, trillions can be shifted toward climate-resilient infrastructure and renewable energy (RE). Yet it is not the lack of funds but the inability to design bankable projects that is at the root of low- level investment in climate action.

The bottom line to spurring investment is to incentivize and decrease risk. It involves helping develop the capacity of governments to access climate finance. Empowering them to utilize emission markets and carbon pricing, and to make the most of the diffusion of low carbon technologies, can help them mobilize climate funds in a significant way.

The common misconception and argument that renewable energy is expensive is no longer true. Solar and wind are already the lowest cost options in many regions while RE costs continue to decline in countries such as Morocco, South Africa, India, the United Arab Emirates, and Brazil.

Likewise, the historical responsibility of developed countries in contributing to climate change is undisputed. They have a higher obligation to scale up funding, support project design, and transfer technologies to developing countries, not only to avoid the irreparable losses and effects of climate change but also to incentivize vulnerable countries to transition early and attract far bigger investments in clean energy.

For example, developed countries can provide funding to cover vital electricity grid upgrade requirements to allow developing countries to absorb scaled up renewable energy generation, which paves the way for more in- vesting in renewable energy from the private sector.

It is no secret that countries are still lagging on action to reduce emissions despite the Paris Agreement’s entry into force.

The Climate Vulnerable Forum (CVF), an alliance of over 40 vulnerable countries including the Philippines, recognizes the need for global solidarity in the face of worsening climate threats. CVF member countries demand far greater ambition from other nations but likewise demonstrate

their own ambition through enhanced NDCs that are predicated on far stronger and more predictable international support.

The goal of CVF’s call for 100% renewable energy commitments by 2050 is to encourage transformational low- carbon resilience that helps boost inclusive economic development. Though the transformational side here is neither technology-driven nor measurable by a sectoral outcome, the impact of transformation on poverty incidence and vulnerability is absolutely critical to the climate finance approach that vulnerable countries and other least developed countries need to pursue. Climate finance should evolve its metrics to ensure the marginalized benefit first from existing climate funds and programs.

Access to cleaner energy drives economic growth and development, and more importantly, helps the poor escape poverty.

Aside from the rapid decline of overall RE prices, developments in RE- powered infrastructure are expected to accelerate. This is seen by CVF member countries as one of their prime opportunities to leapfrog the polluting pathway taken by big countries towards development.

Ultimately, this call for 100% renewable energy prioritizes the mechanisms and tools that will advance low carbon, climate-resilient infrastructure development compatible with the ambitions of the Paris Agreement. Aside from being a driving force in signaling the need for increased commitments from all countries to keep within the 1.5°C temperature threshold, climatevulnerable countries can also show the economic benefits of pursuing such climate action.