COP27 Finance Day

About Climate Finance Day:

Finance is the cornerstone for implementing climate actions and scaling up ambition; hence, it has been at the heart of the UNFCCC process and the Paris Agreement negotiations. The Glasgow outcomes also reiterated the centrality of finance as a catalyst for progress on all aspects of the global climate agenda. Many Parties demonstrated the political will to deliver on finance commitments.

The Finance day will address several aspects of the climate finance ecosystem, including but not limited to, innovative and blended finance and financial instruments, tools and policies that has the potential to enhance access, scale up finance and contribute to the transition envisaged and needed, including those related to debt for environment swaps. The Finance day will also feature the holding of one or more of the mandated events including Ministerial finance roundtable.

What is Climate Finance:

Climate finance helps countries reduce greenhouse gas emissions such as by funding renewable power like wind or solar. It also helps communities adapt to climate change impacts. Introducing climate resilient seeds, for instance, means farmers, despite droughts and other extreme weather, keep producing food and earning income.

Public finance provided through governments is essential to finance action where private finance is not yet available, or that would not normally attract private finance. Public finance is often used for investments that contribute to a public good, such as by reinforcing the banks of a river, so it does not flood neighbouring communities.?

Sometimes, public finance encourages private finance from businesses by “nudging” firms to enter and create markets for new products, like building supplies made of recycled materials.

Private finance also has an important role. In addition to investments in projects vital to the new green economy, such as renewable power plants or electric cars, private finance needs to be aligned with climate goals. This means that an investor such as a pension fund would choose, for instance, to purchase stock in companies producing clean renewable energy instead of carbon-intensive fossil fuels.

Fun Fact:

In the Paris Agreement, wealthier countries committed to providing developing countries with at least $100 billion a year by 2020 for climate mitigation and adaptation. They also agreed to significantly increase adaptation finance.

Learn more about the cost of mitigating climate change:

https://ourworldindata.org/how-much-will-it-cost-to-mitigate-climate-change