Strategizing for climate finance is a huge milestone to inhibit disproportionate effects of climate change on developing countries. Our commitment to low carbon path to global carbon cut starts today.
It is precise that investments hold a major portion of a single, compact business to revitalize its system. Undeniably, when it comes to investments for climate change, most major shares in this battle nods dismal due to the fact that “business-as-usual” among business tycoons has kicked the global markets of this age. Both public and private actors under direct participation to this initiative – has proven that financial development institutions and engaging other stakeholders can mightily outstand these tycoons and scaffold an investment of $100 billion per annum cut from 2020 onwards to address problems on climate change by subsidizing the developing countries’ long-term projects on climate change adaptation and mitigation.
On 2009, Copenhagen’s climate change summit definitely earned a share of an initial fast-track climate fund of $30 billion past 2012 from industrialized and developed countries. However, to complete a $100 billion at the end of this decade is another venture to take. Reclassifying as well on how to delineate the fund to the developing countries is an observable threat as interested parties might not deal with developing climate resiliency on their end – but treat it as either a rehabilitation aid or an adaptation development. This cause disregards the long-term financing that mainly allows developing countries to undertake mitigation and adaptation projects in the next two decades, as such.
Some parties, however, felt that these funds are controlled by DCs. Before then, the Global Environment Facility (GEF) which includes the Least Developed Country Fund and Special Climate Change Fund was aimed to provide privileges for LDCs in pursuing a name for adaptation and mitigation. On that point, many saw a need to institutionalize a new system was developed and least developed countries are represented where both share common privileges to directly access climate funds. Their prior investments had its transit to the Green Climate Fund (GCF). GCF, an institution headquartered in South Korea, is the main channel through which climate funds are allocated. Updates on the funds allocated to projects or financed projects on adaptation or mitigation are reported back to the UNFCCC.
GCF’s 2nd Quarterly Report in 2017 reflected 58 new projects making it to the major pipeline of the institution, allocating at least $3.4 billion in figures. Previously, 43 approved projects had a distributed $2.2 billion allocated funds since 2015. Their pipelined projects covered 85 countries with these proposed in the 2018 projected entities considered ‘underway’. Further, investing even a ‘penny’ to provide an ideal share to the GCF rendered 87 million
Further, investing even a ‘penny’ to provide an ideal share to the GCF rendered 87 million people around the globe as ‘equitably resilient’ against the worst effects of climate change. Many private and public actors marshaled proposed projects to GCF without cropping funds for use. In the meantime, developing countries allocate their climate funds to undertake their point-of agendum in terms of climate adaptation and mitigation, technology development and transfer, climate financing and capacity-building.
On the verge of COP23 this year, 159 countries have already invested their share on the Paris Agreement. With that being said, developed country parties (as indicated in Annex II parties) are to provide financial assistance to support the “poorer” countries’ pursuit in preventing further ends of climate change in their region.
Why carbon pricing?
Climate change is considered a market failure as viewed by most economists. Due to climate change, agricultural (raw) materials has been capped in production resulting in low market interaction with both consumers and producers. As a concrete solution, economists introduced carbon pricing, a cost applied to carbon pollution persuading major polluters to reduce their emissions. Many economists agree that putting a price on carbon emissions will relatively decrease emissions on a pre-conditioned basis. However, the meeting demands of temperature target to lower expected and allowable temperature rise to 1.5C seems to halt the path to achieve robust carbon pricing. It is because isolating climate funds to achieve this target alone rather than multiple targets at a time might be useful.
As a concrete solution, economists introduced carbon pricing, a cost applied to carbon pollution persuading major polluters to reduce their emission.
However, the meeting demands of temperature target to lower expected and allowable temperature rise to 1.5C seems to halt the path to achieve robust carbon pricing. It is because isolating climate funds to achieve this target alone rather than multiple targets at a time might not effectively manage the funds for public use.
Some climatologists also explained that carbon pricing is like using your bike or walking to reach your office rather than using public transportation as it largely emits carbon to the atmosphere. Carbon pricing is positive in nature, rather being rational as it increases more investments to pave more adaptation and mitigation projects contextualized on an LDC.
For instance, investments on renewable energy (RE) are emphasized as a matter of building and growing green. ‘Building green’ leads a ‘business-as-usual’ economy to a green and growing economy. This economy has its tail on the use of carbon-free system to facilitate emerging micro-financed institutions and businesses; in short, ‘green investments’. To sustain this movement, ‘growing green’ has its goal to infuse more RE to completely achieve ‘zero carbon’ emissions on these economies.
A scale of needed investments is deemed larger than what is pictured by many. The World Economic Forum has projected that by 2020, about $5.7 trillion will need to be invested annually in green infrastructure, or in businesses. Although the stakes are high, continuous support from the government other than the GCF can repatriate any major recoil that the opposite might court.
A report by WEF also added that ‘considerable progress’ on green growth has its contact with its early six-fold increase from 2004, 93% higher in 2007. Developing countries intelligible plays a vital role in the growing assets on these green investments such as those known by many as Renewables as a coal energy alternative.
Therefore, investing on carbon pricing is a ‘penny’ to keep.
Financing ‘a lot’ on climate investments
UNFCCC’s 2014 biennial report defined climate finance operationally as “aims to reduce emissions, and enhance sinks of greenhouse gases and aims at reducing the vulnerability of, and maintaining and increasing the resilience of, human and ecological systems to negative climate change impacts.”
In its broadest form, this definition of climate finance has not yet built its foundation. Countries reference climate finance according to its elements. It includes the type of finance, the source of finance and the flows of this finance.
Reserved climate funds for the next years have been estimated at US$ 40 to US$ 175 billion per annum consolidated from national contributions initiated by developed countries to provide a flowing asset and distributed resources to developing countries.
These funds have been nearly appropriated to developing countries. The Philippines, as a Third World
country, has submitted its report highlighted on ADBs “Status on Climate Finance in the Philippines” on 2015. Locally, the report shown that the People’s Survival Fund (PSF) excerpted from donations, grants, and contributions has amounted at P1,000,000,000.00. These funds were branched out to Local Government Units (LGUs) of the country focusing on adaptation measures on their end projects related to climate change adaptation and mitigation. Two projects were invested with this fund: the “Development of RE Applications Mainstreaming and Market Sustainability Project of DOE” ($5.8M) and the “Promotion of Low Carbon Urban Transport System in the Philippines of the DOTC” ($3M). In addition, these Philippine projects were approved by the GEF-5 Board where the fund was apportioned. Philippines projects’ were outlined on the Climate Change Action Plan (CCAP) 2011-2028. It provided specific long program and strategies for adaptation and mitigation, bridging across three political administrations where PSF and GEF contributions connect to other intended projects in the early quarter of 2018.
Mark John Dayto
Climate Reality Project Philippines
Intern, International Affairs