Dr. Mahmoud Mohieldin, UN Climate Change High Level Champion for Egypt and UN Special Envoy on Financing 2030 Sustainable Development Agenda, said that enhancing private sector participation in financing and implementing adaptation projects is essential and indispensable.
This came during his participation in the UN Climate Change High-Level Champions & Private Financial Sector Roundtable on Adaptation and Resilience last May 17, as part of a dialogue process launched recently by the UN Climate Change High-Level Champion in partnership with the the Adrienne Arsht-Rockefeller Foundation Resilience Center (Arsht-Rock) at the Atlantic Council to mobilize concrete actions and contributions by the private financial sector towards international adaptation finance, in the lead up to COP28 and beyond.
This dialogue process has so far brought to the table the Institutional Investors Group on Climate Change (IIGCC), UNEP FI Principles on Responsible Banking (PRB), the Insurance Development Forum (IDF) and its members.
During the Roundtable, Mohieldin stated that there is an urgent need to reform the global finance structure at the levels of IFIs and MDBs to ensure mobilizing fair, sufficient and effective funds that helps achieving climate targets and all SDGs evenly, stressing that climate finance is development finance.
In this regard, Mohieldin pointed to the Sharm El Sheikh Adaptation Agenda saying that its five main work fields: food and agriculture, water and nature, coasts and oceans, human settlements, and infrastructure, as well as its cross cutting enablers of planning and finance, are all directly touching some other SDGs beside their climate purposes.
“Mitigation, Resilience and dealing with loss and damage resulting from climate change are the three lines of defense against the phenomenon,” Mohieldin said, adding that while mitigation measures reserve good participation of private sector and obtain the bulk of funding from IFIs and MDBs, the participation of private sector in financing adaptation measures does not exceed 3% and resilience projects do not get adequate funding from IFIs and MDBs, and this must be changed.”
The climate champion stressed the necessity of encouraging investment in adaptation projects, reducing dependence on debt in financing climate action, activating debt swaps for investment in nature and climate, establishing carbon markets as an effective tool to finance all aspects of climate action. He referred, in this context, to the African Carbon Markets Initiative (ACMI) launched during COP27 in Sharm El Sheikh, which would enhance the capacity of African countries to finance climate projects, especially adaptation ones.
Mohieldin stressed the need to enhance public-private partnerships, with governing the environmental and social practices of companies and the private sector through applying the standards contained in the relevant international reports in order to address the phenomenon of greenwashing.
Regarding loss and damage, Mohieldin said that work is currently underway to determine the mechanisms of work of the Loss and Damage Fund launched during the Sharm El Sheikh conference, explaining that the launch of the fund was supported by members of the G20 and the G7, and received great support from developing countries.
“Before COP28, we need to have a pipeline of applicable climate projects and to find ways to finance them,” Mohieldin said, pointing out the launch of the second edition of the Five Regional Roundtables organized by COP27 and COP28 Presidencies in cooperation with UN regional economic commissions and HLCs. During its first edition, around 120 investable, bankable and implementable projects were reached, while funding is to be mobilized for these projects during the second edition.
