Climate finance is key to action, but we’re still not paying

In the wake of yet another report showing the world’s ‘environmental bank account’ has insufficient funds to cover what we need, one question remains: who can’t afford to invest? 

Earlier this month, Environment Journal reported on climate tech fund 2150 suggesting that the current price tag attached to our ecological crisis is $391million per day. A figure that is guaranteed to continue rising for the foreseeable future. 

At the same time, we’ve seen multiple studies reveal that investment in mitigation, reversal and resilience projects is nowhere near where it should be. In fact, the amount of money pouring into green technologies has fell between 2021 and 2022. Earlier this year, Pollination, a climate and nature advisory and markets specialist, published damning details on the propensity of investors to opt for short-term returns over longer term nature outcomes. Meanwhile, momentum is slowing among nations considered ‘climate leaders’. 

Now more research has been made public arguing for an urgent injection of cash into global climate finance, at the hands of the British Expertise International (BEI) Climate Finance Working Group. Accelerating Climate Finance calls for governments at local and national level to implement stronger project preparation and improve delivery capabilities to attract better investment. 

On the other side of the deal, those with capital need to be more aware of the opportunities in this space, with a recent open letter to government from the pension sector supporting the idea that lack of knowledge and regulatory obstacles are largely to blame for slow green investment-led pension schemes. Granted, investments cover far more than your golden years, but it has long been clear that much of the framework regulating investment urgently needs reform to speed up green tech development.

It’s also unsurprising that communication failures are fingered for blame, given the constant information battle surrounding conversations and issues linked to the changing climate. Co-author of this latest report, climate finance advisory firm Mott MacDonald, a BEI member, is among the case studies presented as evidence of what can be achieved through funding. This includes the company’s work with the Government of Nepal on the Nepal Climate Change Support Programme 2, providing technical assistance to develop local planning regulations and governance, and create hazard maps to prioritise investments.

‘Climate finance will play a central role in the global move away from fossil fuel dependency and the transition to low carbon. It is also essential for building resilience to the physical impacts of climate change,’ said Virginie Fayolle, Technical Principal for Climate Finance at Mott MacDonald. ‘However, aligning global capital with local needs remains complex and there is much work to be done to enable countries to attract investment.’

More on climate finance: 

UK investors prioritise short-term returns over nature outcomes

How local government pensions are fuelling regional green investment

Image: Towfiqu Barbhuiya