COP29: 10 Banks Pledge $120 Billion For Climate Finance By 2030

$120 Billion for Climate Action

At COP29 in Baku, Azerbaijan, a coalition of 10 multilateral banks, including the World Bank, European Investment Bank, and Asian Development Bank, pledged to contribute $120 billion annually by 2030 to fund climate initiatives in low and middle-income countries. The significant commitment underscores the banks’ push to support global climate goals by boosting green finance in regions most vulnerable to climate change.

This announcement also included a targeted $42 billion fund for adaptation efforts specifically designed to counteract the effects of extreme weather. With climate impacts disproportionately affecting poorer regions, this commitment aims to provide crucial support for communities facing rising sea levels, droughts, and other climate-driven challenges.

Increasing Private Sector Involvement

According to Nadia Calvino, President of the European Investment Bank, there has been a noticeable rise in private sector interest in climate financing. “We can spend time just discussing issues,” she remarked, “but I think it’s better to get on with it and work as best as possible, together to mobilize green finance, public and private finance, and have maximum impact on the ground.”

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Calvino’s comments highlight an emerging trend: as the private sector acknowledges the unsustainable costs linked to climate change, more companies and investors are moving toward green investments. COP29, therefore, serves as a critical forum for aligning the interests of both public and private sectors in combating climate challenges.

Challenges in Adaptation Funding

The commitment from COP29 comes at a time when the gap for annual adaptation financing remains significant. According to a report from the United Nations Environment Programme, the current shortfall for adaptation financing ranges from $187 billion to $359 billion. Despite this substantial contribution, the multilateral banks emphasised that their ability to do more would depend heavily on the dedication of shareholders from both developed and developing nations.

While the pledges are substantial, experts at COP29 have pointed out that additional funding will be necessary to address the full scope of adaptation needs worldwide. The banks’ representatives noted that sustained commitment from a wide range of stakeholders is crucial for effective, long-term climate adaptation measures.

Looking Ahead at COP29

COP29 continues to bring global leaders, financial institutions, and the private sector together to find viable solutions for climate change adaptation and mitigation. With COP29 setting a stage for such significant financial pledges, stakeholders hope that this momentum will encourage further contributions and actionable plans from nations and organisations around the world.