By Brenna Hughes Neghaiwi
ZURICH (Reuters) – A new multilateral climate action development bank is needed to help get money to emerging markets more effectively, analysts at U.S. bank Citigroup said on Tuesday ahead of an upcoming U.N. climate summit.
Global leaders will assemble in Glasgow on Oct. 31 for the COP26 U.N. climate summit https://www.reuters.com/subjects/focus-climate-change, aiming to thrash out more ambitious plans to cap global warming and agree the funding needed to help accelerate the planet’s shift towards a lower-carbon economy.
Under the Paris climate agreement, developed countries have promised at least $100 billion annually to help address the climate financing needs of developing countries, while the summit itself hopes to help mobilise trillions in private sector finance towards climate investments.
Calling for a so-called Climate Action Development Bank, Citi proposed a new global institution dedicated to financing lower carbon developments, funded by nations across the globe.
“(We) believe it would be a far more efficient if capital were to be allocated with the assistance of an institution fully dedicated to achieving climate change objectives,” the Citi authors said.
Such a bank could work together with other development banks, such as the World Bank, the African Development Bank and the European Bank for Reconstruction and Development, to coordinate climate action facilities and other goals.
It could further help harness trillions of private sector investments by adopting a blended finance approach, or public-private deals backed by government-financed institutions, and thereby reduce the risks and barriers for investors to back projects, particularly in emerging economies.
World business leaders also hope for a deal at the summit to resolve issues that have hindered use of carbon pricing to cut worldwide emissions. They look to boost the role companies play in slowing global warming.
“To stand any chance of staying within a 1.5 degree Celsius temperature increase, we need to do much, much more to reduce emissions,” a team of nine experts concluded in the bank’s 104-page global carbon market report, calling for a coordinated global effort to help price carbon and remove hurdles for developing countries to access climate financing.
“We cannot realistically expect emerging markets to fund their own decarbonization programs, and slow their economic growth … The goal must fall at least in part on developed nations,” the authors said. “We need to find a mechanism whereby global efforts to decarbonize are funded efficiently and equitably.”
(Reporting by Brenna Hughes Neghaiwi and Simon Jessop; Editing by David Gregorio)
