Investment to fight climate change dropped 11 per cent to $546 billion last year

While the investment in climate action has been steadily increasing, it remains far short of the economy-wide transformation required

  • Published On Nov 7, 2019 at 05:41 PM IST
New Delhi: Global climate finance reached a record high of $612 billion in 2017 driven by renewable energy and lower-carbon transport capacity additions in China, US and India and increased public commitment to energy efficiency but dropped 11 per cent to $546 billion in 2018 due to reduced public money for low-carbon transport and lower private investment in renewable energy.

These are the findings of a study “Global Landscape of Climate Finance” by Climate Policy Initiative (CPI) released today. It includes data from 2013-2018 and breaks down climate finance by use, geography and source. The report shows that while the investment in climate action has been steadily increasing, it remains far short of the economy-wide transformation required.

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Taking into account annual fluctuations, average annual climate investment in 2017-2018 was 25 per cent higher than during 2015-16 in a trend that reflects steady increases in financing across nearly all types of investors. The rise are concentrated in low-carbon transport (by sector) and North America and East Asia (by region).

“Given the urgency of the climate challenge, it is a positive sign that we have passed the half a trillion dollar mark of investment towards climate change activities,” said Barbara Buchner, Executive Director of Climate Finance at CPI. “Still, this is simply not enough, especially as investments in polluting industries continue to effectively cancel out these efforts to address climate change. Leaders should be focused on total economic transformation.”

The study also indicates the estimates of the investment required to achieve global climate change goals including a range of $1.6 trillion to $3.8 trillion needed annually between 2016 and 2050 for supply-side energy system investments from the IPCC and adaptation costs of $180 billion annually from 2020 to 2030 from the Global Commission on Adaptation.

In terms of regional destinations of climate finance, investment in non-OECD countries reached $356 billion in 2017-2018. Most climate finance – 76 per cent of the tracked total – is still invested in the same country in which it is sourced.

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In terms of who is providing finance, the public sector remains the foundation for mobilizing private investment, and private investors continue to provide largest share – at 56 per cent – of climate finance. Corporations account for the majority of private investment, but commercial financial institutions are starting to play a more important role and increased financing by 51 per cent from 2015-16 to 2017-18.

  • Published On Nov 7, 2019 at 05:41 PM IST
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