At COP26, the United Kingdom announced the ‘Clean Green Initiative,’ which aims to help poor countries make use of green technologies and grow their economies in a sustainable manner.
The initiative includes a five-year plan to double UK aid-funded green investments to over £3 billion and new guarantees to encourage clean infrastructure projects. On 1st November at COP26, PM Johnson hosted an Action & Solidarity Roundtable, bringing together the most vulnerable countries to climate change and those responsible for the majority of emissions.
On November 1, 2021, during COP26, the Prime Minister unveiled a large financial package to support the rollout of sustainable infrastructure and groundbreaking green technology in developing nations, assisting in the fight against climate change and boosting economic growth. The money will assist in kickstarting the UK’s new Clean Green Initiative (CGI), which aims to increase public and private investment in high-quality, long-lasting infrastructure around the world.
At an Action and Solidarity Roundtable at COP26, the Prime Minister, along with the leaders of India, the United States, and 24 other countries, emphasized the importance of providing climate finance for the developing world, the democratization of green technology, and other solutions to the climate crisis.
Over the next five years, the UK will provide over £3 billion in climate financing for green growth in poor countries, including £200 million for a new Climate Innovation Facility, to support the Clean Green Initiative. This is more than twice the amount spent on climate initiatives by the UK’s development financing organization, the CDC, during the previous strategy period of 2017-2021. In areas where private investors have been hesitant to take on the risk alone, the Climate Innovation Facility will assist the scale-up of solutions to help communities manage the impacts of climate change, such as drought-resistant agriculture and sustainable forestry. It will be offered by the Centers for Disease Control and Prevention (CDC) in collaboration with the private sector.
Boris Johnson, the Prime Minister, stated
“I want to see the UK’s Green Industrial Revolution go global. The pace of change on clean technology and infrastructure is incredible, but no country should be left behind in the race to save our planet.
The climate has often been a silent victim of economic growth and progress – but the opposite should now be true. Through the Clean Green Initiative, we can help to build back better and greener from the pandemic and put the world on the path to a more sustainable future.”
The Private Infrastructure Development Group (PIDG), which is backed by UK assistance, has also pledged more than £210 million in fresh funding to support transformative green initiatives in poor nations. The funds will be used to fund projects such as electric vehicle manufacturing in India, green bonds in Vietnam, and solar power in Burkina Faso, Pakistan, Nepal, and Chad – projects that are estimated to raise more than £470 million ($650 million) in private sector funding. Furthermore, the United Kingdom is releasing a package of guarantees to multilateral development banks that will significantly enhance investments in climate-related projects in India and Africa.
A new ‘Room to Run’ guarantee to the African Development Bank (AfDB) is projected to unlock up to £2 billion in additional finance for projects across the continent, half of which would assist governments adapting to climate change impacts. It is expected, for example, to enhance the AfDB’s efforts to generate high-quality climate data to aid countries in planning for future impacts, water resource management, and helping farmers increase their drought resistance.
The UK will also offer the World Bank an ‘India Green Guarantee,’ unlocking an additional £750 million ($1 billion) for green projects in India. Sustainable and resilient infrastructure will be supported in sectors such as clean energy, transportation, and urban development.
Liz Truss, the Foreign Secretary, said, “Developing countries need the right form of investment to help drive clean growth, whilst dealing with the impacts of climate change. The opportunities are clear and this new initiative will enable us to seize them, working closely with our allies to deliver honest and responsible investment and cleaner and more reliable infrastructure in the developing world.”
The Clean Green Initiative is an important aspect of the UK’s contribution to the G7’s Build Back a Better World initiative, which was unveiled in June during the Carbis Bay Summit. It’s meant to be a long-term strategy for assisting poor countries in closing infrastructure gaps while also supporting climate change and sustainable development goals.
The UK will assist the establishment of national partnership platforms to make it simpler for vulnerable countries to access climate finance, through the CGI and with Mark Carney’s help as the Prime Minister’s Finance Adviser for COP26. Governments, donors, development banks, and the business sector would collaborate on national platforms to connect green project pipelines with finance and investments.
What is Climate Finance?
Climate finance refers to public, private, and alternative financing that is used to support mitigation and adaptation efforts to address climate change on a local, national, or global level. Financial support from Parties with more financial resources to those who are less endowed and more vulnerable is called for in the Convention, the Kyoto Protocol, and the Paris Agreement. This acknowledges that countries’ contributions to climate change, as well as their ability to prevent and manage its repercussions, differ greatly. Because large-scale expenditures are necessary to considerably cut emissions, climate finance is required for mitigation. Climate finance is also critical for adaptation, as large financial resources are required to adjust to the negative effects of climate change and mitigate its consequences.
The Convention established a financial framework to give financial resources to developing country Parties to enable the provision of climate finance. The Kyoto Protocol and the Paris Agreement both benefit from the financial structure.
How does climate finance plunge developing countries into debt?
Climate finance is increasingly being provided in the form of loans rather than grants, which presents a significant challenge for developing countries. Loans accounted for over three-quarters of the $78.9 billion in total climate finance mobilized by wealthy countries in 2018, according to the 2009 pledge. Borrowing also comes with a hefty price tag. More than sixty countries were only able to obtain loan capital at interest rates of more than 18 percent for projects lasting more than two years in the same year. Because of the insecure funding choices available to developing countries, the green finance revolution has left some of the world’s most vulnerable countries out.
Given the weak financial outlooks for countries most vulnerable to climate change, borrowing rates could rise much further.
Why is climate finance important?
Because large-scale investments are required to considerably reduce emissions, particularly in sectors that release high amounts of greenhouse gases, climate finance is crucial to solving climate change. Climate finance is also vital for adaptation, which will require large financial resources to allow communities and economies to adjust to the negative effects of climate change and lessen their repercussions.
Will COP26 really save the planet?
At first glance, things don’t appear to be promising, for one simple reason: the previous 25 of these massive gatherings have failed to turn off the tap on the greenhouse gases that are driving up global temperatures. Despite three decades of discussion, the globe is already at least 1.1 degrees Celsius hotter than it was before the industrial revolution – and increasing. Even if everyone keeps their present pledges to cut emissions, we’ll still be on track for a disastrous rise of 2.7 degrees Celsius by the end of the century.
In reality, no single conference will ever be able to accomplish that. COPs were created particularly for nations to address climate change, and the yearly round of meetings is still the sole way to address the issue collectively. However, they are run by a consensus of approximately 200 countries, many of which have quite diverse opinions.
Many oil- and coal-rich countries have been outright hostile to the climate agenda, doing everything they can to slow it down. Others who are poor and vulnerable regard rising temperatures as a threat to their own survival and are in desperate need of assistance. Finally, the conferences serve as a focal point for climate action, but they will never result in a complete revolution.