Innovation and cooperation for global carbon neutrality

Excellencies, distinguished guests,

I would like to congratulate the Korean Government on their efforts to accelerate global efforts towards a carbon-neutral future. The decision by South Korea in August last year to become carbon neutral by 2050 added to the momentum for climate action in the build-up to the COP26 meeting last December.

But the climate challenge remains stark. The International Energy Agency has found that while renewable energy grew by 6% last year, the global demand for electricity surged by the same amount. As a result, CO2 emissions from power generation rose by 7% to a new all-time high in 2021.

Accelerating and scaling up climate innovation and investment will be essential to ensure the pledges made by many countries for carbon neutrality translate into action. A recent assessment of the progress of the low carbon transition in ten of the highest-emitting sectors of the global economy - power, agriculture and land-use, cars, trucks, shipping, aviation, buildings, steel, cement, and plastics - found that required technologies and business models to support this transition had reached the deployment stage in only three sectors: buildings, cars, and power.

Developing economies have an immense potential to accelerate the deployment of pivotal technologies to de-carbonise high-emitting sectors and foster systemic resilience to climate change. Notably, developing economies have proven quick at developing and adapting the latest digital services and leapfrogging traditional brick-and-mortar business models.

The CCPP seminar’s focus this year on innovation and cooperation for global carbon neutrality will provide valuable support for this aim. I applaud the Ministry of Economy and Finance for their commitment to knowledge-sharing for climate action.

GCF’s mandate is to help developing countries realize their climate ambitions – for both reduced emissions and to adapt to the impacts of climate change. Seven years after its initial capitalization, GCF has become the world’s largest dedicated climate fund with USD 37 billion of assets under management, including $ 10 billion of GCF resources and co-financing from its partners.

GCF has adopted a four-pronged approach to implement its mandate.

First, we help countries establish a conducive policy environment for climate investment and maximize co-benefits between climate, economic and social development efforts. Notably, GCF is currently helping developing countries craft green COVID-19 recovery plans to stimulate sustainable jobs and green growth.

Second, we catalyse climate innovation. For example, we are working with the Korean Development Bank to pilot climate incubators and accelerators for ecopreneurs in developing countries.

Third, we de-risk transformative projects to establish a commercial track record and crowd-in private finance. For instance, we invested with the Asian Development Bank in the ASEAN Green Recovery Co-Investment Platform that will leverage USD 3.7 billion of public resources from several international institutions to mobilize over $ 7 billion from the private sector to foster a low carbon climate resilient COVID economic recovery.

And fourth, we help align finance with sustainable development. As an illustration, in Mongolia we established an innovative green bank to engineer access to long-term affordable finance to support commercially proven climate investment at scale.

As we act collectively to meet the challenge, I look forward to the findings from this seminar on how we can accelerate efforts towards an inclusive and carbon neutral future.