UAE Minister of Climate Change and Environment: The Presidium intends to initiate the establishment of a large-scale climate finance system|COP28 Prospects

"At COP28, we must deliver on our commitments and set the framework for a new financial deal. ”

UAE Minister of Climate Change and Environment Maryam Mohammed Al-Mhairi said at the second Abu Dhabi Finance Week event on November 27.

Mariam argues that finance is a key enabler of climate action, but to unleash its power, it must be accessible, usable and affordable. However, the current international financial architecture is fragmented, and the solutions provided in particular are insufficient for the countries most in need of transformation.

"So we're going to start the process of change at COP28. Maryam noted that the COP28 presidency wants to help build a system that enables climate finance to scale up and on demand, and to support fiscal mobilization to move money to developing countries on an unprecedented scale.

This reveals a positive signal for the upcoming COP28 in terms of climate finance.

From November 30 to December 12, the 28th Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCCC) will be held in Dubai, United Arab Emirates.

The Loss and Damage Fund, which aims to provide financial assistance to the countries most vulnerable to climate change, is one of the key outcomes of COP27.

In early November, the Transitional Committee of the United Nations Framework Convention on Climate Change (UNFCCC) Loss and Damage Fund met in Abu Dhabi to agree on proposals for the operation of the fund. The recommendation will be presented at COP28 and is expected to be finalized and adopted by the 198 parties.

In addition, as early as 2009, developed countries pledged to transfer $100 billion annually from 2020 onwards to poorer countries suffering from worsening climate change-related disasters. This goal has not been achieved before, which raises certain trust issues.

According to the latest assessment by the Organisation for Economic Co-operation and Development (OECD) in November, developed countries may have already met their collective commitment to raise $100 billion a year in 2022.

"The $100 billion target took 14 years. Mariam said on November 27 that they will also continue to urge developed countries to stay on track with their goal of doubling adaptation finance by 2025.

During COP26, governments pledged to double adaptation finance for developing countries to US$40 billion by 2025 from 2019 levels.

But the funding currently being raised for climate change is still insufficient.

The 2023 Adaptation Gap Report released by the United Nations Environment Programme (UNEP) on November 2 pointed out that developing countries need about $215 billion to $387 billion a year to adapt to climate change. In 2021, these countries received only about US$21 billion in adaptation finance from developed countries, down 15 percent from 2020, leaving a financing gap of US$194 billion to US$366 billion.

The COP27 report mentions that developing countries will need US$2.4 trillion a year to implement climate action by 2030. Of this amount, $1 trillion needs to come from external financing, including from investors, developed countries and multilateral institutions.

On October 27 this year, at a regular press conference of China's Ministry of Ecology and Environment, Xia Yingxian, director of the Department of Climate Change of the Ministry of Ecology and Environment, also stressed that developed countries should earnestly fulfill their commitment to provide and mobilize US$100 billion of climate finance for developing countries and regions every year before COP28, clarify the roadmap for doubling adaptation finance, and make greater contributions to the formulation of new collective quantitative finance targets after 2025.

Massive climate finance will also have an impact on the future economic order.

On November 28, Hong Kong Stock Exchange Chairman Laura Cha commented at the Abu Dhabi Finance Week roundtable entitled "Predicting 2030: Preparing for Changes in the Economic Order" that sustainable development, including the upcoming COP28, will affect the allocation of capital and the way people invest, and some of the world's developing emerging economies will have to benefit and participate in the decarbonization process.

Gulf countries, including the UAE, are actively participating in global climate investment. Mariam mentioned that as the GCC deepens its relationship with Africa, they are well positioned to play a leading role in promoting the continent's energy transition.

"Between 2012 and 2022, more than $100 billion of foreign direct investment flowed into Africa from the Gulf, with the UAE alone investing $59.4 billion, making it the fourth largest global investor in Africa after China, Europe and the United States. Mariam said.