Member nations across the Commonwealth are eager to see corporations play a bigger role in the fight against climate change in light of the growing climatic uncertainties and rising financial needs for climate adaptation and mitigation.
The comment was delivered at a formal side event that the Commonwealth Secretariat, the governments of Saint Lucia, Namibia, and Zambia organised in conjunction with the United Nations Climate Change Conference (COP27), which is currently taking place in Egypt.
In order to support climate action in small and other vulnerable nations, senior government officials, international experts, and members of the business community debated strategies to “unlock” private sector finance.
“By 2030, we will require an estimated US$4 trillion annually to address the effects of climate change and achieve ambitious goals to reduce carbon emissions to net-zero levels. This includes a hitherto unseen level of investment in the use of technology to accelerate the energy transition, “The Rt Hon Patricia Scotland KC, secretary-general of the Commonwealth, remarked.
“However, climate finance flows only amount to about US$632 billion in 2021, which is about a sixth of what is needed. Without the help of the commercial sector, we cannot close this gap.”
In his remarks, Saint Lucia’s Minister of Education, Sustainable Development, Innovation, Science, Technology, and Vocational Training, Hon. Shawn Edward, drew attention to the crippling climate disasters that small island states frequently experience as well as the enormous debt that governments must incur to pay for relief efforts.
“Small island developing states (SIDS) like Saint Lucia must constantly look for resources in order to cope with the effects of climate change. The developed world has made climate finance commitments totaling hundreds of millions of dollars. These funds have not materialized. As a result, the SIDS are forced to borrow money to address their climate change problems, leaving them with unmanageable debt.”
Collins Nzovu, MP, Zambia’s Minister of Green Economy and Environment, emphasised that although while vulnerable countries contribute only 4% of the world’s greenhouse gas emissions, they bear the brunt of the effects of climate change. Due to their designation as “high risk,” many are also assessed above-average interest rates on loans, which exacerbates their debt problems. Hon. Nzovu continued,
“In addition, several of these nations have a wealth of natural resources, which provide fantastic investment prospects. So, in addition to looking at soft loans and concessional financing, we also consider the private sector. How can foreign companies interact with us in public-private partnerships so that we can collaborate with you to de-risk those investments? How can foreign companies work with us?”
The panel discussion that followed focused on the prospects and difficulties for green investments in underdeveloped nations, as well as cutting-edge financing options including debt-for-nature swaps. It also discussed the role of multinational corporations in mobilising climate money.
Veronica Jakarasi of the Africa Enterprise Challenge Fund was one of the speakers who emphasised the significance of believing in African companies and investing in them to foster growth.
Unnikrishnan Nair, the Commonwealth Secretariat’s head of climate change, spoke at the session’s conclusion and outlined a five-point plan for including the private sector in the activities of the Commonwealth Finance Access Hub (CCFAH).
Small and other disadvantaged nations are assisted by the CCFAH in securing funds for climate projects. The CCFAH has taught more than 2000 government employees in the creation of strong funding proposals and assisted in securing around US$53 million in climate finance for at least 12 countries by working directly with line ministries in member governments.