‘Tectonic shift’ needed for climate change finance

Finance for measures to cut climate-changing emissions and adapt to a hotter planet has grown to more than $500bn (R7.3-trillion) a year, but a “tectonic shift” is still needed to green economies and rein in global warming.

In 2017, global climate finance reached a record high of $612bn (R9-trillion,) driven by rising investment in lower-carbon transport and renewable energy in China, India and the US, global think-tank Climate Policy Initiative (CPI) said.

In 2018, the total dropped to $546bn (R8-trillion) as governments spent less on green transport and falling costs for clean energy kept business investment lower, CPI said in a report tracking climate finance from governments, companies and households.

But averaged across 2017 and 2018, climate investment was 25% higher than in 20152016, with funding for low-carbon transport rising by 54%.

CPI associate director Angela Falconer said climate finance was rising despite the 2018 dip, but remained vastly insufficient.

The report said climatefriendly funding had to increase quickly to meet globally agreed goals to curb temperature rise caused by burning fossil fuels, felling forests and other activities emitting greenhouse gases.

Renewable energy was the biggest destination for climate finance in 2017-2018 with nearly 60% of the total — but the $337bn (R4.9-trillion) a year was far below estimated needs, CPI said.

To keep global warming to a lower limit of 1.5°C, the UN climate science panel has estimated clean energy investment of $1.6-trillion (R23-trillion) to $3.8-trillion (R55.9-trillion) a year is required.

“We really do need a massive increase in the speed and scale in investment that needs to go beyond the energy and transport sectors across the economy to land use, agriculture, forestry [and] infrastructure as a whole,” Falconer said.

Business models for investing in greener farming and forest protection are just starting to emerge.