The world requires a reimagined, reinvigorated, repurposed financial architecture that invests long-term in effective climate action, supporting the world’s most vulnerable communities.
Such a system would improve the quantity, type, and delivery of finance to scale up the positive impacts on communities on the frontlines of the climate crisis.
At the Green Climate Fund’s (GCF) COP29 official side event, “Reform of the International Financial Architecture and the Role of GCF,” a packed audience heard how responding to the immense challenge requires bold and transformative action.
The November 11th event convened climate leaders from government, public and private sectors who shared their thoughts on the type of climate finance needed to tackle today’s challenges.
GCF Executive Director Mafalda Duarte said ‘ambitious, coordinated action from everyone in the international financial landscape’ was needed to achieve the significant new levels of ambition required to meet the climate challenge. She said GCF is committed to scaling up and accelerating access to finance, particularly for those countries most at risk.
The Prime Minister of Tuvalu, H.E. Feleti Teo, said innovative and flexible financing mechanisms were needed to scale up resilience, especially for small island states like Tuvalu.
“We simply cannot continue to operate in a ‘business as usual’ manner based on a very outdated climate finance architecture,” Prime Minister Teo said. “It is imperative that the international financial architecture is reformed, refreshed and updated to respond effectively to the reality and demands of today.
“Time is running out for meaningful climate action. Further streamlining of access to climate finance for small island developing states and least developed countries is urgently needed.” The Prime Minister praised GCF for the increased flexibility of its financial instruments.
H.E. Amb. Khadija Mohamed Al-Makhzoumi, Minister of Environment and Climate Change, Federal Republic of Somalia, said the landmark project to support climate action in her country, approved by GCF last month, was the kind of climate investment needed on a greater scale.
The innovative project will bolster climate resilience and improve the livelihoods of 1.1 million people through increased access of smallholder farmers to water, climate-resilient seeds, feed, fodder, and markets. The project will also strengthen institutional frameworks and coordination for sustainable landscape management and climate-resilient agriculture.
France's Special Advisor on Climate Action, Kevin Magron, emphasised the need for a more complementary and coherent international financial architecture that works better for the most at-risk communities.
As the tenth anniversary of the Paris Agreement approaches, he said that France remained committed to support increases in the level of climate finance, quicker mobilisation, and reform of the overall financial architecture.
“The current architecture is fragmented, as we all know and see, but this does not mean that actors cannot work together and work better together,” Mr Magron said.
“We need better synergies between the stakeholders to make it simpler for investors and donors to join co-financing schemes and for concrete platforms to evolve through pre-agreed frameworks.”
The UK’s Special Representative for Climate, Rachel Kyte said the UK will continue its strong support of GCF. She referenced how the Fund has initiated ‘a remarkable set of reforms’ to enable it to be more responsive to the needs of developing countries.
“Leadership also requires us to be disciplined and focused and to find pragmatic ways to pool our resources so that they can be more effectively leveraged,” she added.
Founder and CEO of Acumen, Jacqueline Novogratz, praised GCF’s reforms and referenced its willingness to be a first mover and accept increased risk to initiate climate investments.
As a private sector partner, she heralded Acumen’s partnership with GCF, which is helping to address the huge challenge of access to electrification. Approximately 700 million people have no access to electrification.
“Business as usual is not going to solve this problem. I cannot think of another financial institution that would partner with us from the beginning to really look at what it takes to deliver solar electrification in countries with four per cent, eight per cent, 14 per cent, 35 per cent electrification rates,” Ms Novogratz said. “Trust can be built, and change can be made. It doesn't happen overnight, yet we must act as if it does”
Director of Means of Implementation at UNFCCC Sophie De Coninck said GCF is well positioned to be a lead actor in operationalising reform and bringing other institutions together to better address needs. She said reforms to the global finance architecture aimed to ensure that the newly collected quantified goal for finance is credible and achievable.
For more information, visit the GCF COP29 microsite: https://cop.greenclimate.fund/