Increasing and De-risking Climate Finance

Increasing and de-risking climate finance presents a complex challenge, particularly for developing nations facing significant economic uncertainties. While frameworks like the TCFD, Task Force on Climate-related Financial Disclosures, aim to enhance transparency, they often fail to address the underlying economic risks that deter investment in climate initiatives. Investors are understandably cautious about committing resources without effective strategies to mitigate potential losses, making de-risking a central issue rather than a secondary consideration. This reality prompts a closer examination of how to create an environment where investment in climate solutions is perceived as less risky, thereby unlocking essential capital for sustainable development.

The roles of the EU, USA, along with other global powers are pivotal, extending beyond mere financial contributions to serving as catalysts for frameworks that facilitate greater investment flows. While discussions often focus on financial aid, the potential for developed nations to provide technical expertise and innovative solutions deserves attention. There’s a critical opportunity to explore how countries in the Global North, given their historical responsibility, can engage with the Global South in ways that genuinely support climate finance while addressing economic vulnerabilities. This exploration is vital for understanding the intricate nature of climate finance and the creative approaches necessary to overcome existing barriers. Thus, this session aims to illuminate these dynamics and foster a deeper understanding of collaborative strategies for enhancing climate finance.