Developing Nations Need $1 Trn A Year By 2030: Expert report

New Delhi: Negotiators at the UN climate conference in Azerbaijan should focus on mobilising $1 trillion per year by 2030 to help developing countries cope with the warming world, a new report the Independent High-Level Expert Group on Climate Finance said on Thursday.

This money, according to the group of international climate finance experts, is needed from public and private sources. As countries negotiate at COP29 a new climate finance package to support developing countries beyond 2025, the report cautions against the risks of delayed action. “Any shortfall in investment before 2030 will place added pressure on the years that follow, creating a steeper and potentially more costly path to climate stability,” Failing to invest sufficiently now, it warns, “Means we will need to mobilise even larger sums in shorter time frames to catch up on critical targets.”

The report said global climate action requires $6.3–6.7 trillion annually by 2030, with $2.4 trillion per year needed specifically for emerging economies. It breaks down the $2.4 trillion needs for emerging markets and developing countries outside China as follows: $1.6 trillion for clean energy, $0.25 trillion for climate adaptation, $0.25 trillion for loss and damage, $0.3 trillion for sustainable agriculture and natural capital and $0.04 trillion for fostering a just transition.

The Independent High-Level Expert Group, co-chaired by climate finance experts Amar Bhattacharya, Vera Songwe, and Nicholas Stern, was formed to advise successive COP presidencies, starting with COP26. This is the group’s third report. The group said it is necessary to tap into all funding sources to meet the climate finance needs.

“External finance from all sources, international public and private, along with others, will need to cover $1 trillion per year of the total investment needed by 2030 and around $1.3 trillion by 2035,” the authors said. They said that a fourfold increase in total climate finance and a sixfold increase in external finance by 2030 are necessary to keep pace with climate goals, adding that “these are the investment levels that are necessary for delivery on the Paris targets”.

The report also said that bilateral climate finance from advanced economies, which currently amounts to $43 billion per year, needs to double or more, given the central role that it plays in building trust and financing the most difficult needs. It said the multilateral development banks (MDBs), including the World Bank, “should come forward with a commitment and plan to triple lending capacity by 2030 as part of the NCQG, with each MDB doing its part, which will require shared commitment and leadership from shareholders.”