Climate Futures Tracker | November 23, 2023

Countdown to COP28: 2 Weeks

Facts & Figures

• The recently published "State of Climate Action" report highlights an upward trend in total private climate finance since 2016, reaching US$ 333 billion in 2020. However, this amount must increase more than tenfold by 2030 to reach the target of US$ 3.3 trillion per year.
• According to CPI estimates, an investment of US$ 266 trillion is required between now and 2050 to effectively mitigate and adapt to climate change. Failing to make this investment would result in US$ 2.3 quadrillion in direct economic damage by the end of the century.
• According to the “State of Blended Finance” published by Convergence, adaptation blended finance continues to be under-represented, with only 15% of deals since 2013 having a pure adaptation focus. This equates to US$ 7.5 billion in total financing, compared to US$ 64.2 billion for pure mitigation and US$ 18.5 billion for hybrid transactions.

The Lead Story

Developed countries meet long overdue US$ 100 billion climate finance commitment

According to the OECD, developed countries have likely met the US$ 100 billion climate finance promise to vulnerable countries in 2022. The data supporting this claim is still preliminary and will need to be verified. The US$ 100 billion commitment, announced during COP15 in Copenhagen, has been a continuous source of diplomatic tensions since countries failed to hit the target by the 2020 deadline. The symbolic milestone pales in comparison with the trillions of dollars estimated to be needed by vulnerable nations to cut emissions and better cope with the effects of climate change. Despite the overall increase in climate financing, specific funding for adaptation declined by US$ 4 billion to US$ 24.6 billion. This setback casts doubt over whether developed countries will be able to meet a pledge made at COP26 to double their provision of adaptation finance to US$ 40.6 billion by 2025. Rich nations will also still need to make up for the shortfalls to the US$ 100 billion goal for 2020 and 2021.

Investments in Climate Futures

Global

BBVA brings its investment in climate funds to US$ 118 million: The Spanish multinational bank is investing US$ 25 million in the climate fund Decarbonization Partners Fund I, raising the bank’s total investment in climate-related funds to US$ 118 million. Decarbonization Partners is a joint venture of BlackRock and Temasek. Its first fund, Decarbonization Partners Fund I, invests in a portfolio of late-stage venture capital and early-stage growth private companies whose activities and technologies aim to accelerate decarbonization and the transition toward a carbon-neutral economy.

Canada to launch subsidies for carbon capture and clean tech: The legislation will be presented this month to start paying subsidies for carbon capture and net-zero energy projects, as part of a plan worth around US$ 20 billion over five years. A long delay in state support for carbon capture utilization and storage (CCUS) projects and for equipment used to produce low-carbon energy could jeopardize US$ 36 billion worth of investments if the government did not act soon.

Africa

Namibia breaks ground on World’s first Green Iron Plant: The US$ 32.2 million project is a partnership between the German Ministry of Economy and Climate Action, the Namibian government, and other European stakeholders. The Plant will use renewable energy and Hylron technology to produce iron without any carbon emissions, marking a significant breakthrough as the iron and steel industry is one of the world’s biggest polluters.

Arab Coordination Group pledges US$ 50 billion to boost African climate resilience: The ACG financing will support initiatives in areas such as energy security and energy transition; regional integration and connectivity; trade finance and facilitation; gender and youth initiatives; enhanced support for fragile states; enhanced development effectiveness; private sector financing; food security and poverty and unemployment.

Nigeria and Germany sign US$ 500 million renewable energy and gas deal: The Union Bank of Nigeria and Germany's DWS Group signed a memorandum of understanding (MoU) on renewable energy, aiming to harness US$ 500 million in investment in renewable energy projects across Nigeria, mostly in rural communities as well as a gas export deal.

AfDB and Canada Climate Fund approve US$ 18 million loan to Morocco’s OCP group for seawater desalination plants: The loan is part of the AfDB and Canada Climate Fund, which aspires to support African climate-related projects to boost the continent’s development. According to AfDB, the loan is part of a US$ 36.3 million budget approved by CACF in support of two private sector operations to advance climate adaptation in Africa.

Middle East

Masdar inaugurates ‘world’s-largest’ 2GW solar project in Abu Dhabi: Encompassing about four million bi-facial solar modules, the project will supply power to the procurer of the project, Emirates Water and Electricity Company (EWEC), as both companies signed a power purchase agreement in 2020. The project is said to be the world’s largest single-site solar PV plant, increasing the UAE’s solar power production capacity to 3.2 GW. The solar power plant will power almost 200,000 homes and eliminate over 2.4 million tonnes of carbon emissions every year.

South & Southeast Asia

Indonesia launches US$ 20 billion renewable energy investment plan: Indonesia launched its investment plan to mobilize US$ 20 billion in financing pledged by global lenders led by the United States and Japan to accelerate its power sector decarbonization and called for immediate fund disbursement. Under Indonesia's Just Energy Transition Partnership (JETP), the country seeks to cut carbon dioxide emissions to 250 million metric tons for its on-grid power sector by 2030, versus estimated business-as-usual emissions of over 350 million.

Spotlight

US and China pledge cooperation on climate following California talks: The two countries have pledged support for a new global renewables target and collaborative efforts to address methane and plastic pollution. Climate envoys John Kerry and Xie Zhenhua agreed to re-establish a bilateral climate working group. The collaboration aims to advance large-scale projects in carbon capture, utilization, and storage by the end of the decade. Although differences persist on issues like phasing out fossil fuels, the agreement is seen as a crucial step in normalizing the climate relationship between the two nations. China, the world's largest emitter, has pledged for the first time to include non-carbon dioxide greenhouse gasses in its 2035 national climate plan, signaling a need for increased efforts to align with global goals.

Upcoming Events

COP28 - UNFCCC, Dubai (UAE), November 30-December 12

Business & Philanthropy Climate Forum - COP28, Dubai (UAE), November 30-December 2

Abu Dhabi Sustainability Week - Masdar, Dubai (UAE), December 4

COP28 Monitor

UAE and EU aim to breathe life into loss and damage fund at COP28: COP28 President and the EU Commission said they shared the conviction that COP28 "must accelerate practical action on mitigation, adaptation, loss and damage, and climate finance and build a fully inclusive COP28 that leaves no one behind". Commissioner for Climate Action Wopke Hoekstra announced that the EU is ready to pledge substantial financial contributions for the loss and damage fund at COP28. The Commission also plans to announce a financial contribution to the COP28 renewable energy and energy efficiency pledge.

France, Kenya set to launch COP28 coalition for global taxes to fund climate action: The task force is planning to consider a broad range of options, including levies on international shipping, aviation, financial transactions, and fossil fuels. The governments are in advanced discussions with a handful of European and Global South countries that could join the coalition in Dubai.

COP28 president and WFP chief call for urgent climate action to reduce rising humanitarian needs: In fragile and conflict-struck settings, extreme weather events affect three times as many people annually compared to other countries. Despite this, people living in extremely fragile states receive a fraction,?up to 80 times less, of climate finance compared to those in non-fragile states. The COP28 President and WFP chief call comes ahead of the COP28 Declaration on Climate, Relief, Recovery, and Peace which will officially launch on December 3 and will seek transformative measures on the frontlines of the climate crisis.

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