With the growing climate uncertainties and mounting financial needs for climate adaptation and mitigation, member countries across the Commonwealth are keen to see businesses take up a greater role in the fight against climate change.
The observation was made during an official side event co-organised by the Commonwealth Secretariat and the Governments of Saint Lucia, Namibia and Zambia at the United Nations Climate Change Conference (COP27) underway in Egypt to tackle the vice.
Senior government officials, international experts and members of the business community discussed ways to “unlock” private sector finance to bolster climate action in small and other vulnerable countries.
“To address the impacts of climate change and meet ambitious targets to reduce carbon emissions to net-zero, we will need an estimated US$4 trillion each year by 2030. This includes unprecedented investment for the deployment of technologies to speed the energy transition," Commonwealth Secretary-General, the Rt Hon Patricia Scotland KC, said.
“Yet climate finance flows in 2021 reach around US$632 billion: just a sixth of what is required. We cannot fill this gap without the private sector.”
In his remarks, the Minister of Education, Sustainable Development, Innovation, Science, Technology and Vocational Training of Saint Lucia, Hon. Shawn Edward, highlighted the devastating climate disasters that small island states recurrently face – and the vast amounts of debt that governments must accrue to finance recovery efforts.
“To deal with the impacts of climate change, small island developing states (SIDS) like Saint Lucia have to go out and search for resources on a continuous basis. Hundreds of millions of dollars in climate finance have been pledged and promised by developed countries. Those monies are not forthcoming. Consequently, we SIDS have to borrow to deal with our climate change issues, creating a situation where we are saddled with debt that is not sustainable.”
The Minister of Green Economy and Environment of Zambia, Hon. Collins Nzovu MP, emphasised that while vulnerable countries are responsible for just 4 percent of global greenhouse gas emissions, they are the most affected by climate change. Many are also charged above-average interest rates on loans, due to their “high risk” classification, leading to further debt-distress. Hon. Nzovu added:
“At the same time, many of these countries are endowed with abundant natural resources, which represent huge investment opportunities. So we are not only interested in concessional funding and soft loans; we are also looking at the private sector. How can international firms come to our countries to work with us in public-private partnerships, where we can work with you to de-risk those investments?”
This was followed by a panel discussion that highlighted the role of multinational companies in raising climate finance, the opportunities and challenges for green investments in developing countries, as well as innovative financing solutions, such as debt-for-nature swaps.
Speakers such as Veronica Jakarasi of the Africa Enterprise Challenge Fund underlined the importance of trusting businesses in Africa and investing in them to enable growth.
The session ended with a statement by Head of Climate Change at the Commonwealth Secretariat, Unnikrishnan Nair, who shared a five-point agenda on engaging the private sector in the work of the Commonwealth Finance Access Hub (CCFAH).
The CCFAH supports small and other vulnerable states to raise funding for climate projects. Working directly with line ministries in member governments, the CCFAH has helped to secure around US$53 million in climate finance for at least 12 countries, and trained more than 2000 government officials in developing robust funding proposals.