Emerging nations need $100-150 bn annually for climate transition: UN special envoy – EQ

New Delhi: Developed nations, through multilateral development banks (MDBs), will need to pour in about $100-150 billion annually into emerging economies to help them finance the climate transition, Mark Carney, UN special envoy for climate action and finance, said on Saturday.

Speaking at the B20 Summit 2023, Carney, who’s also the co-chair of GFANZ (The Glasgow Financial Alliance for Net Zero) and chair and head of Transition Investing, Brookfield Asset Management, said that there will be an enormous amount of capital required to finance the climate transition.

“We need to focus on transition finance, particularly for the challenging hard-to-abate sectors and the workers and communities associated with these sectors,” Carney said.

Governments in emerging economies will have an important role to play in creating an enabling ecosystem by establishing regulations, reducing reliance on fossil fuels, increasing renewable energy adoption and encouraging development of carbon markets, he said.

Multilateral Development Banks (MDBs), which are vehicles through which emerging markets are often funded, need to change their operational orientation to focus on the capital that can catalyze the climate transition, he added.

India aims to achieve a net-zero emissions target by 2070. It aims to achieve a non-fossil fuel energy capacity of 500 GW by 2030, meet at least half of its energy requirements through renewable energy by 2030, reduce CO2 emissions by 1 billion tons by 2030, and reduce carbon intensity below 45 percent by 2030.

Interestingly, finance minister Nirmala Sitharaman recently said that India’s G20 presidency will outline the roadmap for transforming multilateral development banks (MDBs).

The process aims to bolster these financial institutions and equip them to confront 21st-century challenges (including climate financing challenges), she added.

The first part of the NK Singh and Lawrence Summers report on MDBs, published recently, proposes effective solutions for addressing evolving issues like poverty alleviation and shared prosperity within MDBs.

The second part of the report, which will be released in October for discussion by finance ministers ahead of the G20 Annual meeting at Marrakech (Morocco), will set the road-map for the transformation of MDBs that will have to evolve to address the ongoing and upcoming challenges faced by the global economy,

Source: PTI