COP27: experts explore ways to mobilize more robust funding for climate action | African Development Bank

Global experts gathered at a panel session at the 27th Global Climate Summit (COP27) in Egypt have endorsed a new climate finance roadmap to mobilize $1 trillion in annual external financing needed for emerging markets and developing countries – excluding China.

The roadmap is based on the findings of a recently released report, Financing for climate action: scaling up investments for climate and developmentproduced by a panel of experts chaired by Vera Songwe and Lord Nicholas Stern.

The discussions during the panel session underlined the need to increase the effectiveness of policies by tailoring them to countries’ needs. The report calls for a rapid and sustained investment drive to drive a strong and sustainable economic recovery after overlapping crises and to meet shared development and climate goals.

Songwe said investment priorities should include transforming the energy system, addressing developing countries’ growing vulnerability to climate change and reversing past damage to natural capital and biodiversity.

“The scale of investment needed in emerging markets and developing countries over the next five years and beyond requires a debt and financing strategy that addresses festering debt problems, especially those of poor and vulnerable countries,” Songwe said. She added that reforms should lead to a major expansion of domestic and international financing – public and private, concessional and non-concessional.

Dr. Akinwumi Adesina, president of the African Development Bank, denounced the inadequate flow of climate finance to Africa. “The whole talk about rich countries paying Africa $100 billion can’t even compensate Africa,” he said.

Adesina said African Development Bank initiatives such as the African Adaptation Acceleration Program (AAAP) — a program to be developed by the bank and the Global Center on Adaptation in 2021 — mobilized $25 billion to scale up adaptation actions across the continent. He said AAAP had so far received contributions from industrialized countries. He added that the African Development Fund, the African Development Bank Group’s concessional arm for low-income countries, launched a climate action program to mobilize up to $13 billion for climate adaptation for vulnerable countries.

Adesina reiterated the call for International Monetary Fund special drawing rights (SDRs) to be sent to African countries through the African Development Bank. “SDRs will play a huge role in helping Africa’s climate action, and the African Development Bank is well positioned to leverage this redistribution fourfold to mobilize finance to countries that need it most,” he said.

Stephanie Pfeifer, chief executive of the Institutional Investors Group on Climate Change, an association that represents investors, said strong carbon pricing policies are vital to phase out fossil fuels.

“The world needs development finance at scale for different types of risks, and data also needs to be made available to drive more private investment in climate finance,” said Pfeifer. If we get the whole system working together, we can make a lot of progress,” she added.

Mahmoud Mohyedin, United Nations champion on climate change, moderated the session, titled Facilitate funding necessary to meet commitments.