Dr. Mahmoud Mohieldin, the United Nations Special Envoy for Financing the 2030 Agenda for Sustainable Development, participated in the Abu Dhabi Sustainability Week held this week to discuss and address sustainability challenges and enhance opportunities for economic transformation.
Dr. Mohieldin took part in a high-level panel discussion titled “Financing the Future: Who Leads the Change,” which explored ways to mobilize private funding to achieve sustainability goals and the role of governments in creating a conducive environment for attracting such investments. During the discussion, he emphasized that although national budgets must reflect sustainability priorities, many countries experience a lack of alignment between their budget allocations and the achievement of Sustainable Development Goals (SDGs) as well as Nationally Determined Contributions (NDCs).
He stressed the importance of achieving the desired alignment to attract the necessary investments for integrating sustainability financing policies with climate action financing policies. This integration was highlighted as crucial during COP27 in Sharm El-Sheikh. Dr. Mohieldin also pointed out that governments should avoid sending mixed signals through their budgets regarding state priorities, as such signals could hinder their ability to benefit from private financing opportunities and international investments.
He added that there are tangible examples of countries successfully aligning their financial and economic policies with the priorities reflected in their budgets and the effectiveness of their institutions tasked with implementation. These efforts have resulted in mobilizing the investments required for development. Dr. Mohieldin also addressed three significant developments related to carbon markets: carbon pricing, the outcomes of the Baku Climate Conference concerning Articles 2 and 4 of Article 6 of the Paris Agreement on carbon markets, and mechanisms related to the Cross-Border Carbon Adjustment Mechanisms.
He explained that these developments necessitate high levels of coordination between public and private sectors, particularly in high-carbon-footprint industries such as steel, iron, fertilizers, cement, and aluminum. Additionally, Dr. Mohieldin highlighted that under the EU’s Cross-Border Carbon Adjustment Mechanism, fees will be imposed on carbon emissions for high-carbon-footprint products imported by European countries. This aims to place foreign producers on equal footing with European industries that must purchase permits from the EU carbon market for their carbon emissions.
Dr. Mohieldin outlined several steps required to address these mechanisms, including coordination among countries within the framework of the World Trade Organization (WTO). He emphasized that Southern countries should benefit from related financial flows and that such benefits should not be entirely captured by the European Union or the United Kingdom. This can be achieved through international cooperation and bilateral relations, as well as by effectively utilizing voluntary carbon markets. Companies in high-carbon-footprint sectors should purchase carbon certificates, which will necessitate corporate restructuring efforts.Dr. Mohieldin also referenced the efforts of countries like India to retain the value of carbon certificates domestically through relevant institutions rather than allowing it to flow abroad, without imposing additional burdens on the national private sector.
