Public funding
During her brief visit to COP28, US Vice President Kamala Harris announced a new $3 billion pledge to the UN’s Green Climate Fund, which helps developing countries invest in reducing emissions and adapting to climate shifts. The Green Climate Fund, however, does not include a clear loss-and-damage mandate. (And, of course, that pledge cannot be fulfilled without the consent of Congress.)
Private funding
More attention was given to the Abu Dhabi royal family’s announcement that it had started a new financial firm, Lunate Capital, a few months ago. Lunate is affiliated with the royal family’s Chimera Investment. Opening assets were at least $50 billion. At least 20% of the funds will be designated for projects in the developing world.
Lunate’s fund joins other climate-centric funds: Brookfield raised $15B and TPG raised $7.3B for climate funds and BlackRock raised $4B for a climate-centric infrastructure fund.
According to data-driven estimates compiled by the Boston Consulting Group, to attain net zero, public and private sector entities across the globe will need approximately $3.8 trillion in annual investment flows through 2025. So, while $30 billion is a large number, the most we can say is that, more than a drop in the bucket, it’s maybe a teaspoon in the bucket.
There is a growing acknowledgment that governments either can’t or won’t produce those dollars. President Biden’s climate envoy, John Kerry, President Biden’s climate envoy, announced a new carbon credit initiative in which more than a dozen major companies (e.g. Walmart, Pepsi and McDonald’s) will help developing countries participate in the transition from fossil fuels to renewable energy.
In September 2022, 500-plus investor groups join in a statement urging governments to raise their climate ambitions and enact policies that use private capital to address the climate crisis.
In addition, joining one of the seven financial sector net-zero alliances that make up the Glasgow Financial Alliance for Net Zero, more than 530 financial institutions (>$130 trillion) have committed to aligning their portfolios to net zero by 2050.
Regulatory stimuli
The U.S. also revealed final rules aimed at cracking down on U.S. oil and gas industry releases of methane. COP28 included an evaluation. One component of that evaluation is an examination of how the nations will achieve a 150-country pledge made two years ago to slash methane emissions by 30% from 2020 levels by 2030.