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Parliamentarians for
Climate Finance
At today’s temperature increase of less than 1.2°C, we already see devastating droughts, storms, floods and heat waves striking all parts of the world. Women, children and marginalised communities are being hit hardest of all. The Inter-Governmental Panel on Climate Change (IPCC) calculated that by 2030 our carbon budget will be exhausted, and our chances of achieving 1.5°C will rapidly vanish. Polled for their individual opinions, the majority of IPCC scientists believe we are likely to surpass a 3°C temperature increase by the end of the century. According to one major international study, this would make much of the tropics as hot as the hottest parts of the Sahara Desert are today. The evacuation of the tropics is a scenario that is likely to happen within the lifetime of young people alive today.
UNLOCKING CLIMATE FINANCE FOR RENEWABLE ENERGY
Major financial institutions estimate that around $2-2.8 trillion investment will be needed by 2030 for emerging markets and developing economies to meet their climate goals, with the majority of that funding flowing into the energy industry. This is a fivefold increase from the current $400 billion of climate investments planned over the next seven years. The private sector will need to supply about 80 percent of the required investment.
Climate finance can play a catalytic role in attracting the substantial investment required to transition toward low-carbon, climate-resilient pathways and achieve country NDCs. Coming from various sources, climate finance can provide green projects with initial funding, reducing risks for investment and leveraging larger financial flows to developing countries. Combining public and private financing is an essential step to reduce risk and attract private capital. Yet, there remain significant barriers in channeling climate finance to viable renewable energy projects.
PARLIAMENTARIANS FOR CLIMATE FINANCE
Elected politicians play a crucial role in shaping policies, laws, and budget allocations that can attract international public climate finance and private investments for decarbonising the energy sector. While governments and ministers change, cross-party groups of legislators can maintain consistent engagement, helping to build political will for government action. Working with our partners UNIDO and the Green Climate Fund (GCF), the Climate Parliament is launching the Parliamentarians for Climate Finance project in 15 African countries, aiming to help attract massive green investment through enhanced legislative, regulatory and policy frameworks. The participating governments are: Botswana, Côte d’Ivoire, Djibouti, Ghana, Guinea, Kenya, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, Tanzania, Uganda, Zambia and Zimbabwe. It will then expand to Asia, Latin America and other regions.
GREEN INVESTMENT DIALOGUES
At the heart of the project will be Green Investment Dialogues to be held in each country involving parliamentarians, public and private investors, guarantors, ministers and regulators. A major focus of these discussions will be creating Green Investment Development Zones (GRIDZ). These will offer a way for MPs to introduce new policies and risk-reduction mechanisms on a limited scale, avoiding confrontation with vested interests. They will have common features aiming to attract affordable green investment, including easy permitting; transmission to major cities and connections to similar zones in neighbouring countries; transparency for all transactions; and guarantees for investors to reduce political, currency or payment risk.
The GRIDZ would seek investment not only in renewable energy generation and grids, but also in energy-hungry green industries such as green hydrogen, and in steel, aluminium, cement, fertiliser or aviation fuel made with that hydrogen, as well as nature-based solutions. They must be designed to benefit local communities. This model that can be replicated anywhere in the world, drawing in the investment required to build the new economic and social infrastructure needed to replace fossil fuels and protect threatened ecosystems.
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