Climate finance: The key to a sustainable future

22 July 2024

Climate change is one of the most pressing issues facing our world today. Rising global temperatures, melting ice caps, extreme weather events – the impacts are being felt across the globe and pose significant challenges to economic growth. Urgent action is needed to mitigate climate change and adapt to its effects.

Reversing the climate crisis requires massive global investments. The annual financial needs for mitigation and adaption measures are set to increase steadily to an average estimate of USD 9 trillion in 2030, eventually soaring to a staggering USD 10 trillion a year by 2050.* Currently available levels of climate finance are multiple times below the needed amounts. Developing countries, where the effects of climate change are most severely felt, find it particularly challenging to finance the necessary measures.

Climate finance has been a central element of global climate change negotiations since 1992. The Cancun Climate Change Agreements of 2010 called on developed countries to jointly “mobilize” USD 100 billion annually by 2020 to address the needs of developing countries. While this might seem a commendable goal, the world’s first-ever global stocktake at the UN Climate Change Conference (COP28) in December 2023 showed that both financial contributions and mitigation efforts are far from meeting commitments.

The more we wait, the higher the costs, both in terms of mitigating global temperature rise and coping with its impacts. So let’s examine what climate finance truly entails and explore financing solutions that can help address the climate crisis.

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