The world is currently at risk of the fallout of the climate, from hotter temperatures to sudden floods. Since 2009, the global climate conferences have agreed on mobilising $100 billion a year for climate change mitigation. With the 28th Conference of the Parties (COP 28) on climate change, Southeast Asia becomes the limelight for the urgent financial incentives to mitigate climate change. According to the estimate shared by the Asian Development Bank, it requires $210 billion per year by the end of 2030 as climate infrastructure investment.
These financial incentives will contribute approximately 12% of the $1.8 trillion sustainable infrastructure investment for emerging economies like India. The size of the needed climate investment includes 4-5 percent of Asia’s GDP. In the sixth assessment report of the Intergovernmental Panel on Climate Change, it is noticed that financial incentives for implementing the needed climate action will reduce global emissions by 43% and are expected to get to net zero by 2050.
Undoubtedly, achieving the goal of net zero emissions will also need the support of the government and timely incentives to overcome the financial challenges. Therefore, there is also an urgent need for climate finance from multiple sources which includes stakeholders and policymakers.
Role Of COP 28 In Climate Change
The latest edition of the COP on climate change was arranged in Dubai from November 30 to December 12, 2023. As per the report of MSCI Inc., delegates from 200 countries participated in this, and the discussion was about every country’s transition from fossil fuels. The hottest topic of COP 28 was financial incentives to mitigate the ongoing challenges of climate change in Southeast Asia.
In an agreement representing a milestone of global climate progress, delegates from Asian countries highlighted that achieving complete decarbonisation will require the support of finance and investment from different industries. So, it is clear that the road to net zero emissions and mitigating climate change will also need a better understanding of the climate-change risks and opportunities.
Prioritise Climate Finance: In COP 28, various policies were laid out to stop climate change and search for ways to strengthen climate finance. Asian leaders emphasised addressing intertwining risks and opportunities to take the countries towards sustainable growth.
Voluntary Carbon Market: The team of leaders also triggered the voluntary carbon market segment, which increases the cash flow by unlocking the use of carbon credit. It will also include the financial institutions and government organisations to offer periodic incentives to the companies who work towards decarbonisation.
Analyse Climate Change Progress: To become carbon-free, Asian countries prioritise analysing data attributing the impact of investment via climate finance. Leaders and representatives from different countries emphasised the creation of a data analysing system to track the progress of climate change.
Double Finance Helps Countries Adapt to Climate Change Impacts
Climate change adaptations have become more expensive because of the magnitude of the climate in different Asian and European countries. According to the data shared by the United Nations, over 60 percent of climate change adaptation requires loans from the public sector.
The United Nations Environment Programme estimates that the countries need to spend around $500 billion by 2050 to mitigate climate change. These costs are 5-10 per cent higher than the funding most Asian countries currently have. The concern for the leaders in the coming years will be streamlining climate change finance by leveraging the available incentive schemes. We can’t ignore the role of organisations on climate change who need to work strategically with government agencies to expand the incentive schemes.
A Green Climate Fund Support
The government across developing Asia has made climate pledges by submitting nationally determined contributions(NDC) in the Paris Agreement on climate change. Asia recorded high economic losses from the other developing countries, which made it move towards climate finance incentives.
Under the Paris Agreement, a Green Climate Fund(GCF), the world’s largest climate fund, will majorly channel finance to developing Asian countries. Since half of its resources go towards climate change mitigation and the other half towards adoption, GCF will act as the needed channel to help countries get the required incentives.
The future road of creating a sustainable climate and reducing carbon emissions will require financial support. A developing Asia that becomes a hotspot for climate impacts needs consistent investment in resources like early warning systems to cope with climate change and reach the goal of net zero emissions by the end of 2050.
