Success isn’t promising money; it’s delivering it effectively. Political leadership, money and institutions all interlock to deliver the transition, and restore development gains.
Much of the focus at the COP has been on the quantity of finance to be delivered. Vulnerable and developing countries are anxious to ensure that the developed world lives up to its commitments and delivers the climate finance commitment. This was emphasised by the powerful speech made by Prime Minister of Barbados, Mia Mottley, reminding the developed world that redirecting a fraction of the trillions spent on supporting their own economies would have a colossal impact on the developing world.
The last two weeks have seen progress in phasing out fossil fuels, enhancing the protection of forest and land use, and using innovative platforms that only a couple of years ago seemed out of reach. But these successes beg the question, how can these platforms be replicated, how can resources be delivered fast, and how can they meet the development needs on the ground?
The first week at COP26 brought a ray of hope. World Leaders were discussing and agreeing on principles for infrastructure investment that put development and climate at the heart of investing. Furthermore, these proposals would treat recipient countries as partners. For a fleeting moment, it felt like the penny had dropped. Mario Draghi, who once pledged to do ‘whatever it takes’ to save the euro, was asking leaders to put some heft behind efforts to mobilise sufficient finance. This requires harnessing the power of public and private sectors, whilst ensuring that finance is aligned with countries’ long-term needs and requirements. Draghi was sure that the COP should be the starting point to deliver this.
The credible, durable path to delivering the outcomes required will be ensuring that the dollars promised are matched by the ecosystem to deliver it.
But a little over a week later, progress in delivering the wider system upgrades has stalled. Instead, the conversation on where the money is coming from has been one-sided. More pledges have come, and the private sector seems to be on board, but caution will prevail until there is clear political leadership. So far, this has failed to materialise.
If we continue to focus on total financing figures, then if and when these figures do not appear, the cynicism and loss of hope from developing economies will only grow.
The credible, durable path to delivering the outcomes required will be ensuring that the dollars promised are matched by the ecosystem to deliver it. Strong political leadership is necessary to make this reality. The COP26 moment is creating the potential for a strong push for action to build an ecosystem resilient to both climate change and to withstand future crises. The political stars are aligned to allow this, and the opportunity should be seized.
Draghi has put forward a vision that has been echoed by others. To deliver this, leaders need to take greater risks and use their money and influence to set up and strongly support platforms where real partnerships between donors and recipient countries are formed, whilst leveraging the power of the institutions they control to facilitate such partnerships.
Committing to an effort to upgrade the ecosystem – to be able to invest, and to align investment with countries’ needs – is as important to re-establishing credibility as a focus on a dollar amount for climate finance.
In other words, world leaders need to invest their political capital in backing public finance institutions, both financially and more importantly politically. Committing to an effort to upgrade the ecosystem – to be able to invest, and to align investment with countries’ needs – is as important to re-establishing credibility as a focus on a dollar amount for climate finance.
The momentum established offers the tantalising hope that the ‘Climate moment’ can deliver what the ‘COVID moment’ has yet to. A focus on delivering on climate can be the catalyst for a wider upgrade of system architecture, one that can deliver not only for the challenges that climate poses, but also for economic development.