COP28 Thematic Day Four: Steering Global Finance and Trade Toward Climate-Smart Futures
December 4, 2023
The fourth day of COP28 marked a pivotal moment in our collective endeavor to align global financial and trade systems with the urgent demands of climate action. Themed around Finance, Trade, Gender Equality, and Accountability, the day’s sessions provided profound insights into the transformative changes required in these sectors to meet our climate goals.
Here are some key highlights from the day:
- Climate Finance Commitments: The United Arab Emirates, as the host of COP28, pledged a significant sum of $270 billion in green finance by 2030 through its banks. This was part of a broader focus on addressing the gap between the need for climate finance and what’s currently available. Several development banks also committed to scaling up their funding efforts, including provisions to pause debt repayments during disasters.
- Investment Needs for Climate Goals: A report released during the summit estimated that emerging markets and developing countries require $2.4 trillion a year in investment to cap emissions and adapt to climate change. This investment is critical to achieving the goals of the Paris Agreement, with a particular emphasis on supporting emerging markets and developing countries outside China.
- Calls for Increased Funding: Vulnerable countries, particularly those already facing costly climate disasters, called for increased funding through a newly formed disaster fund. Barbados Prime Minister Mia Mottley, a prominent voice in these discussions, advocated for moving beyond voluntary pledges to consider taxation to boost climate funding. She suggested that a global tax on financial services or profits from oil and gas could raise substantial funds.
- Fossil Fuel Subsidies and Activist Concerns: U.N. Secretary-General Antonio Guterres and other delegates highlighted the need to end fossil fuel subsidies, which have reached a record $7 trillion annually. Activists expressed concerns about the adequacy of the financial pledges made at the summit.
- Global Finance and Trade Initiatives: Various global initiatives were announced, including the UAE’s banking system pledging to lend more to green projects, the European Bank for Reconstruction and Development including climate-resilient debt clauses in new loan deals, and Danish investment firm Copenhagen Infrastructure Partners announcing plans to raise $3 billion for renewable projects in emerging markets.
- Trade’s Role in Climate Action: The conference dedicated a day to discussing the role of trade in goods and services and trade policy in supporting the transition to clean energy. There was a focus on how trade can catalyze climate-smart development, emphasizing value-chain decarbonization and resilience.
- Growth in Environmentally Friendly Trade: Trade in environmentally friendly goods, like electric vehicles and wind turbines, saw a significant increase, reaching a record $1.9 trillion. Such trade is crucial for providing access to environmentally preferable goods and services and facilitating the transfer of technologies and know-how to support mitigation and adaptation efforts globally.
- Trade Policy and Energy Transition: Trade measures, including tariffs, market-based mechanisms, subsidies, and regulations, can expedite the energy transition and create markets for carbon-efficient products. However, they must be carefully designed to avoid negative impacts, especially on developing countries with less capacity to adapt to these changes.
- Gender Equality in Climate Action: COP28’s commitment to inclusivity was evident on Gender Equality Day. The focus was on fostering gender-responsive policymaking and improving women’s access to finance in climate-related sectors. Speakers highlighted the critical need for women and girls’ whole, equal, and meaningful participation in climate action.
- Empowering Women in Climate Finance: A series of powerful talks shed light on women’s challenges in accessing climate finance and the measures needed to overcome these barriers. The call for a Just Transition that advances gender equality was echoed throughout the day, with several initiatives announced to support this cause.
- Accountability in Climate Commitments: As the day progressed, attention turned to the role of accountability in ensuring the effectiveness of private sector engagements in climate action. The discussions revolved around the mechanisms necessary to convert promises into tangible results, strongly emphasizing boosting transparency.
- Promises to Action: The Accountability Challenge: A critical part of the conversations was the exploration of accountability mechanisms in the private sector. Experts and leaders shared insights into the tools and strategies needed to ensure that pledges made by businesses and corporations translate into meaningful climate action.
Conclusion: A Call for Collective Action
As the day concluded, the call for collective action in transforming our financial and trade systems for a sustainable future was loud and clear. The discussions and commitments during the day laid a foundation for a more equitable and resilient world where finance and trade align with our climate goals.
The insights from COP28 Day Four are a testament to the progress in integrating climate considerations into global finance and trade. Yet, they also serve as a reminder of the challenges ahead. As we progress, the lessons learned and the commitments made on this day will be crucial in steering our global systems towards a more sustainable and inclusive future.
Overall, COP28 Thematic Day Four highlighted the critical role of finance and trade in achieving climate goals. While progress is being made, there is a need for stronger action and greater collaboration to steer global finance and trade towards a climate-smart future that benefits women, children and the elderly.
Up Next: Navigating the Future of Energy, Industry, and Inclusive Climate Action
Tomorrow’s sessions at COP28 will delve into critical strategies for decarbonizing our energy and industrial sectors, fostering job growth, and ensuring economic opportunities in line with a Just Transition. We’ll explore comprehensive approaches to reducing emissions across key industries such as steel, cement, and aluminum, the advancement of renewable energy, and innovative technologies in hydrogen and carbon management.
Additionally, we’ll focus on universal energy access, the role of cooling in climate mitigation, and workers’ vital contributions to the energy transition.
A significant highlight will be Indigenous Peoples Day, honoring Indigenous communities’ invaluable knowledge and leadership in climate stewardship and planetary health. The discussions will enhance their access to finance and reinforce their integral role in a truly inclusive, all-society approach to climate action.
Join me tomorrow for an insightful coverage of these transformative discussions at COP28.