Reframing the Climate Debate

Welcome to Institute Insights, where TBI experts bring to life our work enabling political leaders to drive change that transforms lives.

In this edition, Director of Climate & Energy Policy Lindy Fursman explores the urgent need for COP29 to settle on a new approach to closing the emissions gap. Climate Advisor Imad Ahmed , meanwhile, reflects on TBI’s role in advising Ghana’s Ministry of Finance on a green-finance framework designed to drive sustainable investment.

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Reimagining the Path to Global Climate Action

As leaders convene at this year’s COP in Baku, one critical reality stands out: despite international pledges, global emissions are still climbing. If emissions continue at their current rate, there will be just a handful of years to play with before the prospect of limiting the average global temperature rise to 1.5 degrees Celsius higher than the pre-industrial average is untenable. This underscores the need for a major shift in climate policy and strategy. ?

Historically, high-income nations – especially the United States and those in Europe – have dominated global emissions, but today a substantial portion of emissions and emissions growth is coming from emerging markets and developing economies (EMDEs). For instance, between 1990 and 2022, the EU managed to cut CO2 emissions by 29 per cent, while East Asia and the Pacific saw emissions surge by 231 per cent.?

A collaborative approach is required, whereby high-income countries support EMDEs in their sustainable development. While every country must continue to decarbonise domestically, the urgency of this task calls for a broader approach that leverages international resources and collaboration. High-income countries must look beyond their own borders to help low- and middle-income countries (LMICs) transition to cleaner energy systems. ?

To accomplish this, the focus must be on two key areas.?

1. Building Clean-Energy Markets?

Innovative markets – both global and national – must be created to support the financing of clean-energy projects. This involves setting up systems that encourage investment and attract private capital to sustainable initiatives. A supportive market infrastructure will help drive forward projects that can have a measurable impact on reducing emissions.?

2. Accelerating Technological Advancements?

Technological innovation must be sped up, with investment in new technologies that can help reduce emissions, especially in hard-to-abate sectors such as aviation and agriculture. This includes funding research and development that not only aims to cut greenhouse-gas emissions but also helps communities adapt to the impacts of climate change. ?

By investing in these solutions, it will be possible to set a new path forward that reflects the urgency of climate change. High-income nations must lead the way, offering financial, technological and policy support to LMICs. COP29 presents an opportunity to bridge the gap between ambition and implementation, and turn multilateral dialogue into action.?

Read now: Reframing the Debate: Reimagining the Path to Global Climate Action

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Financing the Future Through Sustainable Investment in Ghana?

Recently, the government of Ghana launched a qualitative green-finance taxonomy that serves as a crucial tool for promoting environmental sustainability within the country.??

This framework sets out clear environmental guidelines to define “green” in the Ghanaian context and – because it aligns with the taxonomies of South Africa and Rwanda – provides some level of uniformity across the continent.?By establishing standards, Ghana enhances its own sustainability efforts while also contributing to a broader regional framework, which encourages responsible investments and environmental stewardship throughout the continent.??

These standards will strengthen the Ministry of Finance’s long-term ability to access a discount – known as a greenium – available to green-bond issuers. They will also allow Ghana to more readily take advantage of climate-debt swaps, helping the country manage its debt more effectively and ensuring that spending is being used to create a more sustainable future. In addition, these new standards will prevent private-sector greenwashing, thereby giving investors confidence in green bonds, lowering capital costs and encouraging corporations to pursue green investments.? ?

TBI was pleased to contribute to the advisory process that harmonised Ghana’s taxonomy with green guidance from other parts of Africa. This uniformity simplifies decision-making by, for example, helping interested investors to easily understand the assets that underlie future Ghanaian green-bond issuances.?

We also played a role in identifying investment opportunities for a “transitional taxonomy” that could be used to define future energy-transition partnership agreements. These included investment in gas to fortify Ghana’s electricity grid; with global warming increasing the frequency and intensity of droughts, the country’s hydropower assets are becoming less dependable. Other opportunities that were identified were the promotion of improved cookstoves to reduce forest degradation, and investments in sustainable mining and mineral processing that will enable global decarbonisation efforts. ?

This advisory work evolved out of TBI assistance for the Ministry of Finance as it updated its Guidelines for the Preparation and Appraisal of Projects in order to mainstream climate considerations across government initiatives. All government authorities sponsoring projects must discuss how resilient their plans are to climate change, as well as citing any benefits in terms of reducing or removing emissions, and contributing to Ghana’s systemic climate resilience.???

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