Reflections on Glasgow and COP26

Reflections on Glasgow and COP26

• The taskforce launched a partnership with five ‘pioneer countries’ – Bangladesh, Fiji, Jamaica, Rwanda and Uganda – to support them and their local communities to get the finance they need for their climate plans. Public finance to support transition • South Africa, the United Kingdom, the United States, France, Germany and the European Union formed a partnership to support South Africa with an accelerated just energy transition has been formed. As a first step, the international partnership announced that $8.5 billion can be made available over the next 3-5 years to support South Africa to achieve the most ambitious emissions reduction target within its upgraded and ambitious Nationally Determined Contribution. • The International Finance Corporation (IFC), with the Hong Kong Monetary Authority (HKMA) and Allianz Global Investors launched a new global platform, MCPP One Planet, for Paris-Aligned climate smart investments that will provide up to $3 billion to private enterprises in developing economies. • The Asian Development Bank (ADB) launched the Energy Transition Mechanism (ETM) to accelerate the retiring of coal power and the move to clean energy. As part of the pilot phase in Indonesia, the Philippines, and Viet Nam, the ETM is expected to raise $2.5 to $3.5 billion to retire 2-3 coal-fired power plants per country. • The International Finance Corporation (IFC), together with Amundi, announced a new $2 billion fund that will help to directly mobilize private investment into sustainable and green bonds in emerging markets. It will channel capital from institutional investors into anchor investments involving sustainable bond issuances from developing countries. It will provide a new model for other asset managers and institutional investors to replicate. Mobilizing private finance • Finance Ministers also discussed that the billions of dollars in public finance must be used to leverage the trillions of dollars in private finance needed for a climate resilient, net zero future, and how to support developing countries to access that finance. • The United States, the European Commission and the UK also committed to work in partnership with countries to support a green and resilient recovery from COVID-19 and boost investment for clean, green infrastructure in developing countries. • The UK also committed £576 million at COP for a package of initiatives to mobilize finance into emerging markets and developing economies, including £66 million to expand the UK’s MOBILIST program, which helps to develop new investment products which can be listed on public markets and attract different types of investors. • Initiatives announced by the World Bank Group and Asian Development Bank will share risk with developing countries and aim to raise up to $8.5 billion in new finance in support of climate action and sustainable development. There was also the launch of an innovative new financing mechanism – the Climate Investment Funds’ Capital Markets Mechanism (CCMM) that will boost investment into clean energy like solar and wind power in developing countries. • Private financial institutions also took a major step to ensure that existing and future investments are aligned to the global goal of net zero.