The Importance of COP28 in Driving Climate Finance

Welcome to COP28! Global government and private sector leaders are descending on Dubai as COP28 kicks off. Finding a consensus on how to fix climate finance is high on the conference agenda.

As COP28 President-designate Sultan Al Jaber put it earlier this year, “A zero-carbon world isn’t feasible without major reform of the current financial system.” He also emphasized the potential for catalyzing the biggest economic transformation since the Industrial Revolution by creating a better climate finance system. 

This event is taking place at a pivotal moment. Oil and gas majors have continued to invest in new production, out of step with the Paris Agreement goal of holding global temperature increases under 1.5 degrees Celsius.

The feasibility of “keeping 1.5 alive” appears increasingly tenuous as we’ve experienced the hottest month on record since 1880 and the global average temperature briefly passed 2 degrees Celsius of warming from the pre-industrial era for the first time in mid-November.

A turning point?

An estimated $4 trillion annually by 2030 is required to transition to a clean economy that reverses those trends, and the money isn’t flowing fast enough, according to Al Jaber.

It will take a real step change at COP28 to rewrite that equation, said Elise Larkin, director of global economic recovery at The Rockefeller Foundation.

First, the investment community needs concrete evidence that developed countries have fulfilled their promise to mobilize $100 billion a year in climate finance for low- and middle-income countries, a commitment made in 2009 at COP15.

Public- and private-sector investors are also seeking more details about an agreement to operationalize the “loss and damage” fund established during COP27 in Egypt, as well as shining a light on where the climate finance is flowing. 

Taking stock of progress

The weeks ahead should leave us with the most comprehensive inventory of the flow of climate finance, especially to developing countries where it is most needed. The first Paris Agreement Global Stocktake, an evaluation of the world’s progress toward the Paris Agreement goals, is set to conclude at COP28. 

Assessments of the climate finance gap vary by trillions of dollars, given the lack of solid definitions or centralized oversight in tracking climate finance flows.

But according to a report released in September by the Climate Policy Initiative (CPI), a think tank considered to be a leading expert in tracking global climate finance,

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